Singapore is proceeding with the most radical structural separation of fixed telecoms in the world after awarding its National Broadband Network passive network tender to the OpenNet consortium of Axia NetMedia, SingTel, Singapore Press Holdings and Singapore Power Telemedia on Friday night. OpenNet will design, build and operate a passive national broadband fibre-to-the-premises network with speeds of up to 1Gbps using up to S$750m funds provided by the government.  

SingTel is to transfer existing ducts, manholes and exchanges used for the NBN to an independent asset company by mid-2011 and sell down its stake in that entity by 2014. That independent company will be owned by a business trust working under a regulator-approved structure which in turn will lease those assets to OpenNet. However, OpenNet will directly own the fiber links.

It will operate to a tight deadline —scheduled to reach 60% of premises in Singapore by 2010 and 95% of premises by 2012. OpenNet will also assume universal service obligations after 2013.

Under the proposal, OpenNet will offer wholesale residential fibre connections for S$15 per month and business fibre connections for S$50. These will be offered to “operating companies” who will operate the electronics—Layers 2 and 3— of the network and resell to retail providers. The Infocomm Development Authority is accepting bids to obtain Opco licenses until mid-November—11 companies have already pre-qualified including Axia, SingTel, BT and StarHub. OpenNet is obliged to offer services on an open, non-discriminatory access basis.

Singapore Communications Minister Dr Lee Boon Yan told a press conference, “OpenNet will waive installation charges for home and building owners when the network first reaches their premises. This is required under the RFP to encourage take-up rate. I hope that all home and building owners will take advantage of this offer to connect their premises during the network rollout.”

LOSING INFINITY: OpenNet was selected over a rival proposal from the Infinity Consortium, comprising SingTel full service competitor StarHub, domestic mobile operator MobileOne and Qatar investment interests. In a press release, it expressed disappointment in its loss and said it looked forward to learning more about OpenNet’s proposed pricing offers.

The winning parties also revealed more details about their plans in weekend press releases. SingTel said it would be responsible for rolling out and deploying the network, with Singapore CEO Allen Lew suggesting the company was comfortable with the plan to transfer its outside infrastructure into a separate network company.

“Passive network assets like ducts and manholes will no longer be a telco’s competitive advantage as every service provider has equal access to the infrastructure. Therefore, SingTel will view the AssetCo as an opportunity to unlock value.  The capital released will be redeployed to other businesses and for capital management initiatives.  SingTel’s focus on its business will also shift from network to customer-centric services to drive its customer and revenue growth,” Lew said.

Axia Netmedia released a statement to its investors forecasting a maximum capital commitment of C$36m. CEO Art Price, who is keynoting the CommsDay Melbourne Congress tomorrow morning, said “A key component of the solution involves OpenNet acquiring access to existing infrastructure through usage fees that vary with the market adoption of OpenNet’s services.”

A powerpoint presentation used by minister Lee at the Friday night press conference revealed more details about OpenNet. It indicated the network would also service “non-building address points” such as bus stops and lamp posts. One slide also indicated OpenNet had beat out Infinity because it dramatically undercut the price and rollout parameters of the government’s RFP. And the offer of free installation only applies to the first installation in a premises up to 15 metres in length, after which cost-oriented charges apply.

There was no detail on whether the network will use a shared or point-to-point topology.

The overall Singapore NBN plan is the most radical in the world. The duct and exchange network, the fibre and the electronics deployed on it will effectively be split between three separated entities with a fourth layer of retail service provision. Separation on this level has only previously been attempted by municipal rollouts in Amsterdam and Stockholm.

The OpenNet win also provides both Axia NetMedia and SingTel’s Australian unit Optus with a boost to their own RFP bids for the Australian national broadband network.

Grahame Lynch