SingTel: OpenNet bound by 'certain volume'

Summary:OpenNet restricted from engaging other subcontractors to alleviate connection delays as it is contractually required to provide minimum level of work to key subcontractor SingTel, exec says.

SINGAPORE--OpenNet is bound by contract to give its key subcontractor, SingTel, a minimum level of work, which is a key reason why the consortium is unable to turn to other subcontractors, says one SingTel executive.

"For us we have a contract with OpenNet that commits us to do certain things, and that commitment is based on certain volume levels that OpenNet has to give [to] us," said Allen Lew, SingTel's country chief officer for Singapore. He was speaking on the sidelines of his company's results briefing held on Thursday.

OpenNet had, in a press release Tuesday, defended its decision not to hire more subcontractors to help with the work, after it had recently turned down offers by telcos M1 and StarHub.

"For us we have a contract with OpenNet that commits us to do certain things, and that commitment is based on certain volume levels that OpenNet has to give [to] us."
-- Allen Lew
Country Chief Officer, Singapore SingTel

Under its current service contract, OpenNet is obliged to activate connections for residential and business orders within 3 and 10 business days, respectively. However, it has been unable to cope with the demand and this had led to numerous complaints, with some cases reportedly dragging on for 4 to 6 months.

Khoo Chin Hean, CEO of OpenNet, said that the company was currently working with its key subcontractor SingTel to increase its activation and installation capacity. "OpenNet must rely on SingTel as its key subcontractor in order to accomplish this massive construction effort," he stated.

Rollout delays blame game
Both sides are set to go into arbitration, with OpenNet accusing SingTel of affecting the performance of the project's rollout. In a report Tuesday, Khoo declined to provide details, but noted that SingTel was "free to engage its subcontractors as they deem fit".

Lew, when queried by ZDNet Asia on the sidelines of his company's briefing Thursday, toed the same line. "There are some elements in the contract that we can't share, we're having some disputes and are likely to go into arbitration," he said.

"Whether we have to take on other subcontractors and who these subcontractors are, this is something for us to look at, and of course whatever we do we look at, we make sure it meets the commitments that we've already made in the contract," added Lew.

SingTel is not only currently the key subcontractor for OpenNet, it also owns a 30 percent stake in the consortium. The other parties who own OpenNet are Axia NetMedia, SP Telecommunications and Singapore Press Holdings.

 

Topics: Networking, Broadband, IT Employment, Legal, SingTel

About

Loves caption contests, leisurely strolls along supermarket aisles and watching How It's Made. Ryan has covered finance, politics, tech and sports for TV, radio and print. He is also co-author of best seller "Profit from the Panic". Ryan is an editor at ZDNet's Asia/Singapore office.

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