Thursday, April 2, 2009

Singapore Selects StarHub as Operator for Next Gen Broadband Network

The Infocomm Development Authority of Singapore (IDA) has selected StarHub to serve as the Operating Company (OpCo) under the Next Generation National Broadband Network. Four proposals were considered: Intellinet (Axia + Cisco), Kliq (M1), 1NNOV8 (Singtel) and Nucleus Connect (StarHub). Last year, the OpenNet consortium backed by SingTel was selected to serve as the Network Company (NetCo) of the Next Gen National Broadband Network.

Under the NBN structure established by the government, the NetCo (OpenNet) is responsible for deploying fiber while the OpCo (StarHub) is responsible for delivering wholesale services to Retail Service Providers (RSPs). A strict structural separation will be maintained.

Under its proposal, StarHub will establish the Next Gen NBN OpCo, called Nucleus Connect, to design, build and operate the active infrastructure. The Government of Singapore will provide a grant of up to $250 million to Nucleus Connect to support its deployment of this infrastructure. Together with the grant of up to $750 million for the Next Gen NBN Network Company1, OpenNet, the Government is investing up to a total of $1 billion to put in place the Next Gen NBN.

Nucleus Connect will, for example, offer a wholesale price of $21 per month for a 100 Mbps residential end-user connection and $121 for a 1Gbps connection. For non-residential premises, such as offices and schools, Nucleus Connect will offer a wholesale price of $75 per month for a 100 Mbps connection. Enterprise users who have more demanding requirements can opt for a 1Gbps connection at $860 per month.

Nucleus Connect will work together with OpenNet, on a coordinated nationwide rollout of the network. It is expected to start offering commercial services by the first half of 2010, and be ready to fulfill its Universal Service Obligations of meeting all reasonable requests for service from 2013.

Nucleus Connect'sservices made available soon after OpenNethas declared coverage of a building. A Universal Service Obligation (USO) shall prevail from 1 Jan 2013.

The Next Gen NBN NetCo and OpCo RFPs were structured to ensure that downstream operators have Effective Open Access to the Next Gen NBN. This is to spur a vibrant and competitive Next Generation broadband market where businesses and consumers can enjoy innovative services from a variety of RSPs. Effective Open Access through structural separation for the Next Gen NBN NetCo and operational separation for the Next Gen NBN OpCo is key to achieving such a vision. Nucleus Connect will be operationally separated from all RSPs. It will also be a separate legal entity from StarHub, with a different corporate brand, separate premises and an independent board of directors. With such an industry structure, RSPs can obtain wholesale bandwidth services from Nucleus Connect on a fair and non-discriminatory basis, and offer a wide range of services at competitive prices to end-users.

Ms Yong Ying-I, Chairman, IDA, said: "With this selection of the Next Gen NBN OpCo RFP proposal, we have achieved another major milestone in the Next Gen NBN project. The Next Gen NBN is a key national infocomm infrastructure that will enhance Singapore's competitiveness in a globalised and digital economy. It will spur the development of rich and innovative content, applications and services, and bring significant benefits to the various economic sectors such as finance, healthcare and education. All in Singapore can soon look forward to a richer broadband experience and a wide range of innovative broadband services at competitive prices, transforming the way we work, live, learn and interact."

Mr Terry Clontz, StarHub's CEO, said: "We are delighted that IDA has selected our proposal. Our proposal is the culmination of years of StarHub's extensive experience in managing and operating what is already Singapore's highest speed broadband network in Singapore. With the fiber optic-based Next-Gen NBN being extended directly to homes and businesses, Singapore will benefit from a robust national infrastructure that will serve the country's broadband needs well into the future."

StarHub will underline its commitment to create a vibrant RSP environment by establishing an integration test lab facility that will help RSPs trial and test out new applications and services over the Next-Gen NBN before commercial deployment. The OpCo is also committed to attracting overseas online service providers to host their content in Singapore. With the fast broadband speeds provided by the Next-Gen NBN, this will undoubtedly bring a more enriching experience to the end users here.

Nucleus Connect expects to spend about $1 billion for the active network over the 25-year period of the license. It is eligible for the government grant of up to $250 million from IDA. StarHub's investment in Nucleus Connect is estimated to be around $100 million.

  • In September 2008, The Infocomm Development Authority of Singapore (IDA) selected the OpenNet consortium as its successful Network Company (NetCo). OpenNet will be contracted to provide passive fibre grid services for Singapore's Next Generation National Broadband Network (NGNBN). OpenNet will be making use of existing ducts and other underlying infrastructure, thereby minimizing disruption to the public and enabling the network to reach homes and buildings nationwide by 2012.

    The OpenNet consortium consists of Axia-Netmedia (30%), Singapore Telecommunications (30%), Singapore Press Holdings (25%) and SP Telecommunications Pte Ltd (15%).

    OpenNet expects to complete the agreement contracting process with the IDA as planned within the next seven months and expects that the Singapore-wide fiber grid will be completed by June 2012. This fiber grid will be made available on equal terms at very compelling prices to any parties qualified by the IDA.

See also