S'pore says NBN will stay competitive

SINGAPORE--Tight regulation will ensure players involved in the country's next-generation broadband network (NBN) stay competitive, assured the country's Infocomm Development Authority (IDA).

At a panel discussion held here Friday during TMT Finance and Investment Asia 2009, Khoong Hock Yun, assistant chief executive of the IDA's infrastructure services development group, said the ICT regulator's decision to impose structural separation on the NBN's two providers was aimed at ensuring market openness and competitiveness.

The NBN's network company (NetCo), OpenNet, will be responsible for building the passive dark fiber infrastructure of the NBN. Atop that layer is Nucleus Connect, the operating company (OpCo) that will sell wholesale broadband services to downstream retail service providers (RSPs).

Asked if anti-competitive behavior might emerge from incumbent telecoms operator, SingTel, which has a share in OpenNet, Khoong said SingTel's share in the NetCo was limited to 30 percent. This was established to prevent the carrier from having veto power over downstream decisions, he said.

Khoong added that structural separation will be enforced for the next 25 years.

Sharad Somani, executive director of KPMG corporate finance, told ZDNet Asia on the sidelines of the panel: "The IDA has done everything possible to ensure [structural] separation."

He said the IDA's mandate to avail fiber to all OpCos--not just the official Nucleus Connect--at the same price, will ensure openness for all OpCos interested in coming into the market.

While SingTel owns much of the ducts in use by the fiber network, right of use lies with OpenNet "so SingTel cannot influence control, and the same deal with the same terms and conditions are available to all OpCos", Somani said.

Video strongest RSP focus
Nucleus Connect CEO David Storrie said during the panel that the OpCo has spoken to more than 40 interested RSPs, some of which were smaller, niche players.

Across the board, however, the overarching focus was video services, Storrie noted. "RSPs are looking at new services in Singapore... Almost every one wants to deliver video," he said.

The NBN's four classes of service quality, from real-time to best effort, will make it possible for a bandwidth-demanding service such as video content, to be delivered at a lower price, he added.

For example, non high-definition video only needs 5Mbps of bandwidth, he said. Users currently have to buy a top-tier 100Mbps service from telcos in order to ensure smooth performance. The NBN's different classes of service will allow users to achieve the same network performance at a lower wholesale cost, by buying 5Mbps worth of real-time service, while subscribing to another 100Mbps service at the lower-tier "best effort" quality of service (QoS), said Storrie.

Nucleus Connect has said it will price its 100Mbps residential connection at S$21 (US$15) per month, and S$121 (US$86.5) for a 1Gbps connection.

StarHub, which owns Nucleus Connect, currently provides its 100Mbps residential connection at S$86.88 (US$62.1), according to its Web site.