26 September 2008
Singapore's Next Generation National Broadband Network To Be Nationwide by 2012
At a media conference this afternoon, Minister for Information, Communications and the Arts (MICA), Dr Lee Boon Yang, said, "I am pleased to announce that the Government has decided to select the proposal from OpenNet Consortium to design, build and operate the passive infrastructure for the Next Gen NBN."
OpenNet's proposal offers attractive wholesale prices that can stimulate a vibrant and competitive retail market. Users can look forward to innovative services from as early as 2010. OpenNet will be making use of existing ducts and other underlying infrastructure, thereby minimising disruption to the public and enabling the network to reach homes and buildings nationwide by 2012.
OpenNet is led by Axia NetMedia Corporation with Singapore Telecommunications Ltd, Singapore Press Holdings Ltd and SP Telecommunications Pte Ltd as the other members of the consortium. The NetCo Request-for-Proposal (RFP) was launched on 11 December 2007 and closed on 5 May 2008 with proposals from two consortia, namely Infinity and OpenNet.
As the selected NetCo, OpenNet will design, build and operate the passive infrastructure of the Next Gen NBN that will be capable of delivering speeds of up to 1 Gbps and beyond. The Government will provide a grant of up to S$750 million to the NetCo to support the network rollout.
OpenNet will offer attractive wholesale prices of S$15 per month per residential fibre connection and S$50 per month per non-residential fibre connection, to the Operating Companies or OpCos. Such wholesale prices are expected to bring about competitive retail prices in the ultra-high speed broadband market.
To encourage premise 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.
Under a Universal Service Obligation, which will take effect from 2013, OpenNet will also fulfil all subsequent requests to install fibre termination points in homes, offices and buildings.
In its proposal, OpenNet will deploy and own all the fibre optic cables and offer wholesale dark fibre services to downstream operators on a non-discriminatory basis as set out in the RFP. OpenNet will make use of relevant existing underlying passive infrastructure assets, such as ducts, manholes and exchanges, belonging to its partner, SingTel, to facilitate the deployment of its fibre network. As part of OpenNet's proposal, SingTel has committed to transfer these underlying assets to a neutral party within 24 months of the NetCo's Contractual and Financial Close, or CFC in short. The CFC will take place within seven months of today's award. The neutral party, called the Asset Company or AssetCo, will be an independent and separately managed company. It will be owned by a registered business trust or will be structured in a similar manner to be approved by IDA.
SingTel, as a member of OpenNet, has also committed to reduce its stake in this AssetCo within five years of the CFC and seek the relevant shareholders' and regulatory approvals, where required. As part of the successful close of the RFP, SingTel is also required to submit to IDA for approval, a detailed implementation plan on the formation of the AssetCo and subsequent partial divestment of its relevant underlying assets.
Dr Lee mentioned at the December 2007 launch of the NetCo RFP that the Government views Effective Open Access through a structural and/or operational separation as key to the achievement of a vibrant and competitive next generation broadband market. The RFP has achieved this outcome for the Next Gen NBN. Nevertheless, Government will continue to consider the need for legislation to entrench Effective Open Access in this market over the long term.
At today's media briefing, Dr Lee also said: "Today, we have arrived at a significant milestone for Singapore. The Next Gen NBN propels Singapore to the forefront of broadband development internationally. Soon, Singaporeans will be able to enjoy a richer broadband experience with more choices and at affordable prices. Businesses, large and small, will find it cheaper and easier to access ultra high-speed broadband, and be able to use infocomm more extensively to boost productivity and competitiveness. The Next Gen NBN will be a strategic enabler that will transform the way we work, live, learn and play.
To sum up, Singaporeans can look forward to the ABC of Next Gen NBN: Attractive prices for ultra-high-speed broadband; Benefits from innovative services, Coverage nationwide with minimal disruption during fast roll-out."
With the selection of the NetCo, OpenNet is expected to work closely with the Infocomm Development Authority of Singapore to provide the necessary network information for Next Gen NBN Operating Company (OpCo) RFP bidders to finalise their bid submissions, which are expected to be due on 14 November 2008.
ISSUED BY CORPORATE & MARKETING COMMUNICATION DIVISION
The Infocomm Development Authority of Singapore (IDA) is committed to growing Singapore into a dynamic global infocomm hub. IDA uses an integrated approach to developing infocommunications in Singapore. This involves nurturing a competitive telecoms market as well as a conducive business environment with programmes and schemes for both local and international companies. For more news and information, visit www.ida.gov.sg.
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