S'pore enterprise fiber uptake not 'as fast' as hoped
Despite tighter requirements in 2013 for service activations, retail service providers say they continue to lose enterprise customers due to installation delays and lack of communication from relevant parties.
While the rollout of Singapore's next-generation nationwide broadband network (NGNBN) has largely been on track for consumers, progress in the enterprise space has been slow.
Although 95 percent nationwide coverage was achieved for both residences and offices in mid-2012, retail service providers (RSPs) still are unable to sell to a huge segment of corporate customers due to a variety of factors. Coverage is defined as optical fiber reaching a building's main distribution frame (MDF) rooms, which are typically on the ground level.
According to Kevin Lim, head of enterprise business group at StarHub, 20 percent of the company's non-residential customers have had to wait "one to two months or more" to get NGNBN services.
RSPs complain about installation, activation delays
The StarHub executive pointed out OpenNet was still behind schedule despite tighter standards imposed on it by local regulator, Infocomms Development Authority of Singapore (IDA). "We would be happy if OpenNet is able to fulfill 80 percent of non-residential orders within a month but, in actual fact, only 30 percent of these orders are provisioned on time. We have customers who gave up and terminated the contract. We are particularly concerned that this may not improve provisioning time for fiber connections for non-residential customers," Lim noted.
"We would be happy if OpenNet is able to fulfill 80 percent of non-residential orders within a month but, in actual fact, only 30 percent of these orders are provisioned on time. We have customers who gave up and terminated the contract." Kevin Lim, head of enterprise business group, StarHub
He added enterprise customers have been facing long delays in service activations and difficulties in getting specific dates from OpenNet for the installation of the fiber termination point at their premises.
"We also receive little information from OpenNet on the status of installation, which makes it very difficult to give updates to our customers and to manage the customer experience," added Lim. Last year, StarHub said such delays led to them losing out on revenue from servicing as many as 20,000 buildings.
Echoing his views, Arnaud Boissonnet, head of SMB at another RSP myRepublic, said: "We do experience strong demand for our products and services but face the challenge of connecting our potential customers from the MDF."
Boissonnet added the company, which counts on the enterprise segment for 10 percent of its business, was working jointly with other parties in the NBN ecosystem such as OpenNet, operating company Nucleus Connect and IDA to expedite the process.
Insurance, cost liabilities are key challenges
M1, too, told ZDNet some issues faced in the enterprise segment include building managements and related parties having differences over who is liable for the costs of laying fiber to customer premises. This is particularly challenging in cases where classification of premises types is ambiguous, or where premises with multiple blocks are sharing the same address.
In response to queries from ZDNet, OpenNet admitted the rollout had "not been without its challenges".
Daniel Ho, director of business development and communications at OpenNet, noted building management approval was first needed in order to secure access into non-residential premises which "takes time" in some cases.
One key obstacle has been the subject of insurance for cases of damage to the façade or interior during installation, which building owners sometimes complicate by requiring tenants to also sign off on the contracts.
"We aim to keep our customers informed during the implementation process, but most often the reasons for delay are quite literally out of OpenNet's hands, and poses a communication challenge," said Ho. The director added it was an industry-wide problem, and not one OpenNet faces alone.
IDA assistant chief executive Khoong Hock Yun acknowledged OpenNet's difficulties, noting progress was not "going as fast as it would have liked" in the enterprise space. He explained some building owners were less forthcoming, which has led IDA to have to intervene on occasions such as reminding them of their legal obligations to facilitate the rollout.
Besides aesthetics and insurance issues, Khoong pointed out that building owners were less motivated to "welcome" another service provider as they reckon their tenants were already well served by existing non-NGNBN service providers such as SingTel.
Still, he highlighted tenants have a choice and building owners would have to oblige to their requests if they asked for access to alternative service providers.
On the issue of adoption amongst enterprise customers, Khoong pointed out that before the advent of NGNBN, business users are already leveraging other non-NGNBN platforms for their business and connectivity needs.
As such, there may be operational considerations such as changing IP (Internet Protocol) address and re-configuring backend systems to accommodate the new fiber connection, which may delay uptake of NBN services.
"That's why you see many of the newer RSPs targeting companies that can more readily make the switch," the IDA executive noted.
"We have offered our services as a subcontractor, if it seriously wishes to improve on its performance. Our offer still stands," he said.
Besides being the key subcontractor, SingTel also owns a 30 percent stake in the consortium behind OpenNet. The other stakeholders are Axia NetMedia, SP Telecommunications and Singapore Press Holdings.
Khoong played down speculation the rollout had been hampered by a conflict of interest with SingTel's various positions as a rival RSP, operating company, and a stakeholder in OpenNet. He pointed out there was nothing stopping RSPs from taking the initiative to lay the necessary cabling themselves. "As most of the hard part has already been completed to bring the optical fiber to the bottom of the building, new RSPs to the enterprise market should be aggressive and deploy the in-building cabling themselves, and should not just wait for OpenNet [because it's cheaper]," said Khoong.
"New RSPs to the enterprise market should be aggressive and deploy the in-building cabling themselves, and should not just wait for OpenNet [because it's cheaper]." Khoong Hock Yun, IDA assistant chief executive
OpenNet charges S$363 for the cabling from MDF room to individual premises, while this is estimated to cost RSPs about S$1,000 to S$2,000 if they do it themselves.
Still, the adoption of NBN services, while important, was not the main indicator of success, said the official.
Khoong explained the industry has already achieved greater vibrancy and competition, what with its 25 RSPs and 8 operating companies, and breaking from the traditional structure seen just two years ago which comprised just 3 providers. This paved the way for lower prices and more innovative packages on the market such as no lock-in periods and niche services, he added.
He attributed this to the open access structure IDA had implemented for the industry, which segmented it into 3 key layers--retail services (RSPs), wholesale bandwidth services (operating company) and wholesale wirelines (network company). This allowed new entrants into the market without the need for heavy infrastructure investments, and where competition could be services-based instead of facilities-based.
Optimistic over rollout
This year, a Universal Service Obligation (USO) clause kicks in from January. Instead of a predetermined rollout schedule it previously followed, OpenNet will need to step up its game and fulfill fiber activations on requests within a timeframe from any location in Singapore.
Activation requests will need to be met within 3 days for residential ones and 10 days for non-residential ones. This is defined as working days only, and does not include delays brought about by building management disagreements.
In order to be able to meet such deadlines, one approach is for OpenNet to pre-build fiber to non-residential buildings' MDF rooms even without an official request from the building management. The NetCo has embarked on this, and furnished IDA with a plan on how it plans to service the remaining unconnected homes and office buildings by mid-2013, Khoong revealed.
Acknowledging again the challenges OpenNet faces in today’s environment, such as the faster rate of new buildings being erected and tighter foreign labor restrictions, the IDA executive said the operator is aware of its obligation since 2009, and would have had the visibility and time to adjust its plans.
"The USO on OpenNet has been in effect from January 1, 2013. IDA will be closely monitoring OpenNet’s progress in bringing fiber to affected buildings and will consider the extent of the delays before determining the appropriate action to be taken against OpenNet," said Khoong. According to OpenNet, it has been actively engaging the building management of non-residential buildings to secure access.
"This effort has yielded some results where for the past six months we delivered approximately 70 percent of all non-residential orders within four weeks. OpenNet will continue to work closely with the IDA and all of the NGNBN stakeholders to improve on delivery times and fiber take-up among businesses," said Ho.