Will Cyber Security Solutions Be Big Business For Singapore Telecommunications Limited In The Years Ahead?

Civil servants in Singapore were probably surprised to find out last week that many of them will not be allowed to access the Internet from their work computers come May 2017.

The Infocomm Development Authority (IDA) of Singapore had made the decision and it has gotten the backing of Prime Minister Lee Hsien Loong as well as the Minister-In-Charge of Smart Nation Initiative, Vivian Balakrishnan.

The IDA’s call to remove internet access for government computers was driven by the need for cyber security. It’s an issue that has made the headlines in recent years.

Just last month, Bangladesh’s central bank became a victim of hacking. US$81 million was stolen from the bank’s coffers and only the New York Fed’s alertness prevented it from losing US$1 billion. In 2014, the US government saw major breaches in its databases which resulted in the exposure of sensitive personnel records for 22.1 million people. Meanwhile, to deal with cyber security threats, the Singapore government will be tabling a new CyberSecurity Act in 2017.

These issues and developments have led me to think about the companies that have exposure to the field of cyber security. It could be a growing space. The 2015 Gartner Information Security Forecast report had stated that the global market for managed security services could nearly double from US$15 billion in 2015 to US$27 billion in 2019.

One company that is actively diving into cyber security is actually Singapore’s largest telecommunications company, Singapore Telecommunications Limited (SGX: Z74). In the third-quarter of 2015, Singtel acquired Trustwave, a provider of managed security services, for US$810 million. It had also struck up a partnership with the US-based FireEye, a cyber security outfit.

During Singtel’s fiscal fourth-quarter earnings release this May, its chief executive Chua Sock Koong had commented on the company’s ambitions in the cyber security space::

“We aspire to be a significant global player in cyber security and our acquisition of Trustwave augments our organic initiatives. ”

It’d be interesting to observe the growth of Singtel’s cyber security business in the coming years. But, it won’t be easy to move the needle for Singtel, given that it has annual revenue of around S$17 billion.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Ong Kai Kiat doesn’t own shares in any companies mentioned.