The Infocomm Development Authority of Singapore (IDA) has appointed the OpenNet consortium as the network company (NetCo) for the country's planned next-generation National Broadband Network (NBN).
The IT regulatory body announced Friday the Axia NetMedia-led consortium would be responsible for building the fibre infrastructure of the NBN.
OpenNet, which comprises Canada-based Axia and three local companies, SingTel, Singapore Press Holdings and SP Telecommunications, was in competition for the government contract with Infinity consortium. The latter was initially formed between Singapore telcos MobileOne (M1) and StarHub and Hong Kong's City Telecom (CTI), but CTI dropped out last month and was replaced by Qatar Investment Authority (QIA).
Minister for Information, Communication and the Arts, Dr Lee Boon Yang, declined to comment on whether Infinity's restructuring negatively impacted its bid. Speaking during a press conference, he said it is "not appropriate to consider this factor", but that the IDA's decision was made based on the merits of each consortium's request for proposal (RFP) outline.
Khoong Hock Yun, IDA's assistant chief executive, infrastructure development group, said one of the highlights of OpenNet's proposal was its ability to reuse existing underlying passive infrastructure, such as ducts, manholes and exchanges. This lowers the cost of the roll out, as well as minimising disruptive building activity and inconvenience to the public, he said.
The consortium will use SingTel's existing passive infrastructure assets to deploy the network, said Lee. SingTel owns a substantial portion of the country's existing duct network, which SingTel CEO Singapore, Allen Lew, has said is more extensive than competitor, StarHub's network.
However, part of the proposal states SingTel will transfer these assets to a neutral party within 24 months of the NetCo's contractual close. This party, known as the Asset Company (AssetCo), will be independent and separately-managed.
SingTel will reduce its stake in the AssetCo within five years of the contractual and financial close. Future maintenance of the fiber assets will be entrusted to the AssetCo.
Lee said OpenNet has proposed an accelerated roll-out of the NBN two years ahead of the IDA's initial schedule. Sixty per cent of households and buildings will get wired up by 2010, with 95 per cent coverage expected by 2012. "From 2013, OpenNet will meet all subsequent requests to install fibre access points in homes, offices and buildings throughout Singapore," he said.
OpenNet has proposed wholesale prices of S$15 per month per residential fibre connection and S$50 per month per non-residential connection. These prices will be extended to the next layer of operating companies (OpCos) which will repackage services atop this layer and retail packages to consumers at a higher price.
The government will provide OpenNet with a grant of up to S$750 million to support its effort, said Lee.
StarHub CEO Terry Clontz said in a statement emailed to the press: "We are disappointed that the Infinity Consortium was not selected for the NetCo project.
"The Infinity Consortium proposed what we believe is a very good solution for Singapore's long term success with the Next-Gen NBN. Also, our proposal would have substantially diversified, for the first time, fixed infrastructure ownership."