S’pore Govt earmarks $750m to boost broadband speeds
IDA to appoint firm to put in place infrastructure for 1 Gbps Net access
By WINSTON CHAI
(SINGAPORE) In a bid to rev up broadband access speeds in Singapore, local authorities are prepared to pump in as much as $750 million to help defray the heavy cost of building a new nationwide Internet highway.
‘For Singapore to remain competitive in the globalised economy, we need careful and timely investments in our key economic infrastructures including infocomm infrastructure.’
The multi-million subsidy was unveiled yesterday when the Infocomm Development Authority of Singapore (IDA) released the long-awaited tender for the mammoth task of laying the Republic’s future broadband foundation, called the Next Generation National Broadband Network (Next Gen NBN).
‘For Singapore to remain competitive in the globalised economy, we need careful and timely investments in our key economic infrastructures including infocomm infrastructure,’ said Lee Boon Yang, Minister for Information, Communications and the Arts.
‘To ensure that Singapore’s infocomm infrastructure is ready for future needs, we must act now,’ he told reporters.
Under this so-called Request for Proposal (RFP), the telecommunications regulator is looking to appoint a company to put in place new Internet pipes or the ‘passive infrastructure’ needed to deliver blazing broadband speeds of one Gbps (gigabit per second) and beyond to all homes and businesses.
Once in place, the new network is expected to boost competition by levelling the field for providing Internet services and opening the doors to new Web-based applications such as high-definition video conferencing, telemedicine and e-learning.
According to Khoong Hock Yun, IDA’s assistant chief executive, the government has capped its grant for the effort at $750 million and the remaining costs will be borne by the winning bidder, coined the Network Company (NetCo).
The NetCo is primarily responsible for constructing and operating the broadband network’s passive infrastructure and it will then sell its services to another entity called the Operating Company (OpCo). The latter will then act as a bandwidth wholesaler to companies that are keen to provide Internet services and applications.
This approach is dramatically different from the current competitive landscape in which companies like SingTel and StarHub own their underlying broadband pipes. They also resell bandwidth to other players in addition to providing their own Internet access packages to consumers and businesses.
To avoid unfair competition and discriminatory pricing, the IDA has mandated that the NetCo be ’structurally separate’ from other players down the line. This means that the successfully bidder for the ongoing RFP cannot vie to be the OpCo or provide Internet-related services to the end-user in future.
For example, if SingTel and StarHub want to bid for the current tender and offer broadband packages on the new network, they can only do so by forming joint ventures with separate boards and different shareholding structures.
‘As a policy, we have therefore decided to adopt separation between the different levels of the Next Gen NBN to achieve effective open access. The RFP to construct the network will therefore provide for structural separation of the passive network operator from the downstream operators,’ Dr Lee explained.
Currently, 12 consortiums have been pre-qualified by IDA to be eligible for the project. These include incumbents SingTel and StarHub, as well as foreign companies like Siemens Networks and Japan’s NTT-West. Alliances led by companies like Alcatel Singapore, BT, T-Systems and Hong Kong Broadband Network are also in the running.
These groups will have to submit their proposals before March 25 next year but the deadline could be extended if a new bidder joins the fold.
The winning NetCo bid will be announced by Q3 2008 and IDA will call for a separate tender for the OpCo in the second quarter.
Singapore’s new broadband network is expected to be partly operational by as early as 2010 and it will provide island-wide connectivity by the year 2015.
Source : Business Times - 12 Dec 2007
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