StarHub: OpenNet's NBN contract needs tweaking

Summary:Telco requests IDA to relook contract revisions with nationwide broadband network (NBN) infrastructure company OpenNet to mitigate current "inflexible" quota adjustment system which might not meet market needs.

SINGAPORE--Telco StarHub has submitted a request to the local IT regulator Infocomm Development Authority of Singapore (IDA) for it to reconsider certain aspects of the contract which it revised in July for network company (NetCo) OpenNet--the consortium tasked to build the national fiber broadband network.

Under the slew of changes made in IDA's review of OpenNet's contract earlier this month, included the raising of the weekly quota--the number of connections the NetCo was obliged to meet--from 2,400 to 3,100. This increase in installation slots includes a dedicated 40 slots per day for the non-residential segment, where previously none were specified for the commercial segment.

This figure would be subject to a "Quota Adjustment System"--one of the areas which StarHub has raised concerns over. This mechanism was designed to raise the level of OpenNet's quota when there is a sustained increase demand in its services. Specifically, if orders exceed 95 percent of the quota, the target for the following quarter would be raised by 10 percent of the preceding 12 weeks' average orders.

Responding to queries from ZDNet Asia, Jeannie Ong, StarHub's head of corporate communications and investor relations, felt the quota adjustment mechanism was "too inflexible, and will not allow the quota to meet the needs of the market".

One possible loophole, for example, could be when the quota was met 100 percent for an entire 12-week period except for a single day when orders fell below the 95 percent mark.

"If OpenNet could argue that this fails to meet the threshold for the quota adjustment mechanism, the quota will not be increased, resulting in long waiting times for connections and customer dissatisfaction," Ong pointed out.

She emphasized that StarHub strongly supported IDA's review of OpenNet's contract and agreed with many of the changes, but believed some areas required modification or clarification.

StarHub has been raising complaints over the rollout of the next-generation nationwide broadband network (NGNBN), which it claimed was too slow. During its earnings call in May, the telco noted that it was losing out on revenue from servicing corporate customers in as many as 20,000 buildings because of continued delays with provisioning of connections by OpenNet.

OpenNet request for time
In the same announcement Monday, IDA revealed that OpenNet had separately submitted a request to also reconsider certain parts of its directives in the revised contract.

An OpenNet spokesperson told ZDNet Asia: “We are supportive of IDA’s directives. To implement the directives will require extensive changes to existing IT systems, we will require more time, beyond the period that IDA has imposed, to implement the IT changes safely. We are currently in consultation with IDA to implement the IT changes within a timeframe acceptable to both parties.”

In the announcement, IDA said it was currently reviewing the requests from both companies.

Topics: Networking, Legal, NBN, Singapore


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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