Ernst & Young (E&Y) has warned that Singapore’s next-generation National Broadband Network (NG NBN) is properly managed to reduce the risks of inefficiencies.
But according to E&Y, the unique network separation model proposed by the government can deliver regulatory, commercial and socio-economic advantages.
Singapore intends to enforce both structural and functional separation to create an open access network. The aim is to foster competition amongst retail service providers.
To ensure this, the government will enforce ownership restrictions on operators, and force operators to establish a separate business entity for their retail service provider arms.
According to E&Y, this model fosters market competition and reduces the burden of regulatory oversight. It also benefits operators by reducing regulatory risks and allowing operators to focus on their core competencies.
But, the analysts warn, both forms of separation can be expensive and complicated, and carry risks of over-investment.
Operators could also face prohibitive costs, may need to increase manpower, and the extra layers of bureaucracy could be time consuming.
“Ultimately, this is about maximizing the potential benefits and successfully mitigating the challenges involved. The end benefit of the Next Gen NBN using the NetCo-OpCo model is to create an environment that best serves the consumers,” E&Y analyst Jonathan Dharmapalan says.