The move sets the stage for a battle between the island's dominant newspaper and broadcasting groups on each other's turf.

Minister for Information and the Arts Lee Yock Suan said Singapore Press Holdings Ltd. (SPH), which publishes all of the island's newspapers, may be given up to two free-to-air television licenses and two radio licenses.

The dominant broadcaster, the Media Corp. of Singapore, may in turn be granted a newspaper license, breaking the SPH monopoly on dailies.

The announcement was made on the eve of CommunicAsia 2000, the region's largest telecommunications show.

Foreign newspapers and magazines as well as cable news stations are freely available here but the domestic media are regarded by officials as a strategic and sensitive industry which must remain in local hands.

At least one foreign group had been seeking a newspaper license, but Lee said the government "has decided to retain the present media structure, with SPH as the core newspaper group and MediaCorp. as the core broadcaster."

"Much as we welcome foreign talent to work in Singapore, and many international media are already operating here, the regular reporting on Singaporean affairs for the Singapore audience has to be done by Singaporean media," Lee said.

"Our objective is therefore to strengthen the local media so that it can hold the attention of the local audience," he added.

Lee said that unlike in the liberalized telecommunications industry which services the world market, "too much competition is unsustainable in the local media industry."

"It may lead to a lowering of standards and an appeal to the lowest common denominator," he said.

He said there was a need for "a local perspective on international developments," adding that Singapore "does not have enough local talent to sustain a large number of high quality media companies."

SPH is controlled by the government through a state investment arm, while MediaCorp is a former state entity that was corporatized in the mid-1990s prior to a planned listing.

Officials said MediaCorp is expected to be listed within the next year or so. Its flagship station Channel News Asia is set to go regional via satellite later this year.

In other moves to boost the local media, the Singapore Broadcasting Authority granted Media Corp. two digital television (DTV) licenses allowing it to install DTV sets in buses and run a commercial DTV service.

Bus commuters will enjoy news and entertainment, while home viewers will be able to enjoy interactive TV using new digital equipment.

Lee also disclosed plans to open up the cable TV industry.

The industry is currently monopolized by Singapore Cable Vision, which has an exclusive license until 2002. A ban on satellite dishes put up by private users will also lapse that year.