Singapore Telecom (SingTel) has seen its share price continue to slide this week after introducing a series of sweeping tariff cuts on international routes. As part of the measures the company, which has a monopoly on international services, announced it would follow Hongkong Telecom and introduce a discounted callback service. SingTel's rates are to be cut by up to 26 per cent starting in May. It is not clear why the company chose this moment to cut tariffs. It is thought the decision provoked a vigorous internal debate over whether it was necessary. In the end, any move is likely to have received high-level government backing as the company is still 82 per cent controlled by the Singapore Government. Although Singapore's international market is to be opened, SingTel will not face any competition until 2000. By comparison, callback services have made Hong Kong much cheaper for international calls and Hongkong Telecom's monopoly partially goes at the end of this year. Paribas Asia Equity analyst Neil Juggins, who is based in Singapore, said part of the reason for cutting prices now must be a desire not to lose out to the SAR. 'Singapore wants to be a hub for traffic. Hong Kong has stolen a march on deregulation, so at least from a pricing point of view [SingTel] wants to be seen to be competitive,' he said. As a result of the cuts, Paribas is revising its profit growth forecasts down to 5 per cent in the 1999 financial year and 8 per cent in 2000. Mr Juggins said this mainly was as a result of how popular he thought the budget international services would be. 'The residential customer base will jump on the bandwagon and small business will do the same.' SingTel cut rates three times last year and has promised further reductions on top of these latest moves. Managers said the latest cuts would produce savings per year of S$33 million (about HK$157.7 million) for its customers. The cuts will affect 126 destinations including the mainland, South Korea, Indonesia, Thailand, Burma and Cambodia.