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Inside Singapore Technologies Engineering Ltd’s Global Ambition to Connect Smart Nations

Singapore’s Smart Nation initiative was launched by Prime Minister Lee Hsien Loong in 24 November 2014.

The internet of things is a fundamental piece of smart nations. This could be a big opportunity. Research firm IDC believes the internet of things could generate as much as US$9 trillion of annual sales worldwide by 2020. And conglomerate Singapore Technologies Engineering Ltd (SGX: S63) has a foot in the door in this initiative.

Smart cities

Lee Fook Sun, Deputy Chief Executive Officer and President of ST Electronics (a subsidiary of ST Engineering), provided some details during its second quarter earnings briefing.

He talked about the importance of the smart nation program:

“Cities need to be smart because there are a lot of challenges with urbanization.”

“Urbanization brings along quite a lot of demand. As cities grow, you need to do certain things to make cities continue to be efficient, to be effective in the way they are being operated.”

Urban population in 2014 made up 54% of the total global population. According to Forbes, Singapore has the third highest population density with 8,000 people per square kilometer (km).

Big data and connectivity

The key pillar to smart nations, according to Lee, is connectivity and big data. He said:  

“The first thing we are talking about is connectivity and big data. When we talk about smart cities, we need to talk about connectivity.”

“You need to be able to connect sensors, devices to analytics. The connectivity is about machine to machine communications, which is something which we are doing.”

Along this vein, ST Engineering is looking to be the backbone for the network. This would be a network which connects sensors, cameras and so forth (“things”) where data from these devices can be collected and analyzed. Lee said:

“This is about LoRa – long range wide area network. Something which we have been working on, something that we have been delivering. It enables cities to connect sensors.”

“So, the connectivity, the smartness is a very important thing. We are working on these things to provide machine to machine connectivity.”

“We call it the Galaxy System.”

The Galaxy System is a radio frequency mesh network that brings together all the various devices deployed in a smart city. These could be sensors that are able to read water meters, or a pressure sensor for the sewerage system. The Galaxy system can also cover a radius of more than 15 km while providing access and control of up to 50,000 endpoints. Lee continued:

“So, this is very useful for smart cities. You can put cameras, you can put all kinds of sensors. Sensors can communicate all the way back to a centre where the information can be analyzed, made sense of, and distributed for people in the cities to use.”

“It’s a very efficient RF mesh network. Easily deployed.”

ST Engineering also provides radio modules, measuring about two-inches in diameter, that can be used for water meters, streets lights, sewerage systems and so on. These modules are sold worldwide.


Source: ST Engineering’s earnings report

Lee shared some sales figures of these modules:

“We have actually started delivered it outside Singapore. Today, we have delivered more than 14 million modules. Sold globally. We started with America, now in Canada, in France, Israel, Brazil and now, New Zealand.”

The numbers look impressive but to be sure, it’s early days for smart cities and internet of things. On the other hand, Lee was clear about where ST Electronics wants to position itself:

“People are using these for all kinds of things, for water meters, for street lights, sewerage systems, everything. But really, it’s not about the sensor that is connected to it, it’s about the backbone.”

“We choose to be the one to deliver the backbone that enable cities to be smart.”    

Time will tell if ST Engineering will be able to carve out a place for itself in this emerging industry.

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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 Chin Hui Leong doesn’t own shares in any companies mentioned.