S'pore calls for NBN's operating company

update ICT regulator opens bids for the operating company to build and run the active infrastructure of the planned next-generation National Broadband Network.

update SINGAPORE--The Infocomm Development Authority of Singapore on Monday called for bids for the "operating company" (OpCo) for the country's planned next-generation National Broadband Network (NBN).

The launch of the request-for-proposal (RFP) follows the IDA's OpCo pre-qualification exercise last month, from which 11 OpCos have since been shortlisted.

As the second layer of industry players Singapore is seeking for the NBN, the OpCo will design, build and operate the NBN's "active" infrastructure.

The active layer of the NBN's infrastructure describes the operating companies that will provide wholesale broadband access to downstream operators who will in turn sell services to end users.

First unveiled in early 2006, the NBN is touted to provide broadband access speeds beyond 1Gbps, or 500 times the common access speed of 2Mbps. According to the IDA, the network is expected to be available across Singapore by 2015.

Last December, the IDA called for RFPs for the first layer of the infrastructure, the "network company" (NetCo), which will be responsible for building the physical networking infrastructure upon which the OpCo will be operating.

The OpCo is required to be "operationally separate" from downstream operators to ensure "open access", where downstream players can obtain wholesale connectivity at non-discriminatory prices and conditions. The IDA said it expects the fairer competition to help drive more competitive prices to end-users eventually.

The industry regulator said this separation is "less stringent" compared to the "structural separation" imposed on the NetCo, in that the OpCo is allowed to own downstream operating units.

Nonetheless, the IDA added, the OpCo will be required to be a separate legal entity from its downstream operators and maintain separate boards, management and staff. The OpCo will also be expected to meet the target of having 330,000 residental and 80,000 non-residential subscribers by 2015.

Although this layer does not directly transact with end users, Khoong Hock Yun, IDA's assistant chief executive, infrastructure development group, said the OpCo is in a good position to help attract users by offering more competitive price packages to downstream operators.

Khoong said Singapore's household broadband penetration rate stands at 79.2 percent of a total of an estimated 1.2 million broadband subscriptions as of February 2008.

The IDA will provide a grant of up to S$250 (US$181 million) to the winning bid, a sum smaller than its grant of S$750 million (US$543 million) to the NetCo because the latter's investment in physical infrastructure is expected to be much larger, said IDA Chairman Yong Ying-I.

The OpCo RFP's closing date is Aug. 20, 2008.

The pre-qualified OpCos are: Alcatel-Lucent, Axia NetMedia, BT Singapore, City Telecom (H.K.), Deutsche Telekom Asia, MobileOne, Nippon Telegraph and Telephone West, Nokia Siemens Networks, Singapore Computer Systems, Singapore Telecommunications and StarHub.