SingTel to Lead Next-Generation Broadband Roll-Out in Singapore

Singapore’s telecoms regulator, the IDA, has announced that it has selected OpenNet, in which SingTel has a 30% stake, to design, build, and operate passive infrastructure for the country’s Next-Generation National Broadband Network (Next Gen NBN). The StarHub-led Infinity was the losing bidder. Details of OpenNet’s offer include:

Schedule and Speeds: By 2010 OpenNet aims to have rolled out the new all-fibre network to 60% of homes and offices. This will reach 95% by 2012. OpenNet has promised speeds "up to and beyond 1 Gbps".

Wholesale Offering: OpenNet will provide wholesale access to its fibre network at US$15 per residential connection and US$50 per non-residential fibre connection. OpenNet will also waive installation charges to home and building owners when the network first passes their premises.

Universal Service: From 2013 OpenNet will fulfil all subsequent requests to install fibre termination points in homes, offices, and buildings.

Ownership of Network Assets: OpenNet said that in its proposal it would own all fibre optic cables that it deploys. In order to drive deployment, it will utilise the existing underlying passive network assets of SingTel, including ducts, manholes, and exchanges. Within 24 months of the NetCo’s Contractual and Financial Close (CFC), which will be within 7 months from 26 September 2008, SingTel will transfer these assets to an independent company, AssetCo. SingTel has also said that it will reduce its stake in AssetCo within five years of the CFC and seek the requisite approvals. SingTel will also submit to the IDA for approval a detailed plan on the formation of AssetCo and the subsequent partial divestment of its (SingTel’s) underlying assets.

OpenNet, as the winner of the tender, is entitled to a government grant of S$750 million (US$525.2 million). Following Friday’s announcement that OpenNet had won the tender, OpenNet will now provide more detailed network information by 24 November. IDA foresees that OpenNet will formally be selected as the country’s NBN provider in April 2009.

Outlook and Implications

• Structural and Operational Separation Central to Winning Bid: In December 2007 Minister for Information, Communications and the Arts (MICA), Lee Boon Yang indicated that the government favoured structural and/or operational separation as the key to ensuring open access. OpenNet’s plans to delegate the management of SingTel’s existing passive network assets to a separate company, AssetCo, in which SingTel’s stake will be reduced, reflect this preference. Nevertheless, the government has said that it will consider the need for legislation to entrench effective open access over the longer term.
• Managed Transformation: Through the issuance of a S$750-million grant and tight deployment targets, the Singaporean state is effectively managing the transformation of the Singaporean broadband to one centred on fibre access. The main aims are to drive economic, governmental and societal development, maintain and enhance Singapore as a centre for ICT as well as other segments and to ensure a competitive telecoms market. The state sees a number of drivers of bandwidth demand, including multiple play, cloud computing, video conference, software-as-a-service, interactive teaching, and interactive IP TV.
• Different Approaches: Singapore’s approach to NGN access deployment differs markedly from that of Malaysia and Europe. In Malaysia, the incumbent is investing heavily in deployment, but is freed of open access obligations for several years (see Malaysia: 25 September 2008:MCMC to Monitor Telekom Malaysia's Progress on New NGN Network).