Singapore: Next generation national broadband network awarded to local-Canadian consortium
Singapore has awarded a contract to build the infrastructure for next generation national broadband network (Next Gen NBN) with 1 Gbps capabilities and beyond to OpenNet, a local-Canadian consortium.
The government will provide a grant of up to S$750 million (US$528 million) to the consortium to support the rollout of the new infrastructure. The Fiber to the Home (FTTH) network will achieve 95% coverage to residences and offices by June 2012, two-and-a-half years ahead of the 2015 deadline spelled out in the country’s “10-year intelligent nation” masterplan (iN2015).
In fact, 60 percent of homes and offices can expect to have access by 2010 to this ultra-speed network which will pave the way for innovative services. The next generation broadband network will be a strategic enabler that will sharply enhance productivity of businesses and transform how the country’s residents work, live, learn and play.
Apart from Singapore Telecommunications Limited (SingTel), 30 percent, and Canadian-based Axia NetMedia Corporation, 30 percent, the other members of the consortium are Singapore Press Holdings Limited, 25 percent and SP Telecommunications Pte Ltd, 15 percent.
To achieve a vibrant and competitive next generation broadband market, the government has made “effective open access” a condition in the award of the contract. It is believed that the authorities are careful about ensuring fairness and cost efficiency to customers, as a result of earlier dispute between SingTel and Singapore’s second fixed-line and wireless operator, Starhub Limited, over fees being charged for last mile broadband connection to customers.
With the contract for building of infrastructure awarded, there will be separate submissions due in November 2088 from pre-qualified prospective operating companies for the operation of the ultra-speed broadband network. The company selected to operate the network can get funding of up to $250 million (US$176 million).
OpenNet will make use of existing underlying passive infrastructure such as ducts, manholes and exchanges belonging to SingTel for the deployment of the new fiber network. Subsequently, SingTel will transfer these facilities to a new asset company, a neutral entity, which will independently and separately manage the infrastructure. In addition, SingTel will take steps to reduce its stake in this asset company.
OpenNet will deploy and own all the fiber optic cables and offer whole dark fiber services to downstream operators on a non-discriminatory basis. The consortium will offer attractive wholesale prices of S$15 (US$10.50) per residential fiber connection and S$50 (US$35.20) per month per non-residential connection to operating companies which will be appointed in due course.
To encourage owners to connect their homes and businesses to the network, OpenNet is required to waive installation charges for home and building owners when the network first reaches their premises. After 2013, OpenNet will also fulfil all subsequent requests to install fiber termination points in homes, offices and buildings.
The consortium estimates that construction of the network will cost S$1 billion (US$704 million) while operating costs over the 25-year license period could be up to S$2 billion (US$1.4 billion).