Singapore moves to accelerate broadband competition

22 Jun 2006

Wireless access services are seen by many as a means of breaking the grip of SingTel and StarHub. Others see them as a cost-effective and rapid way of deploying access solutions.

For mobile service providers, wireless access can be an entrance into additional services and customers. Despite this, wireless access is still widely believed to be complementary to the fixed-line for access services.

Singapore is undertaking an ambitious experiment to see if it can provide ubiquitous coverage with both fixed and wireless access and break the dominance of the fixed-line last mile.

Opportunity and threat

In March 2006, the government announced its intention to develop a wired broadband network to deliver ultra-high speed connectivity to all homes, offices and schools, as well as a wireless broadband network to offer pervasive connectivity around Singapore. This is an ambitious project, one that threatens traditional access services and revenues. Yet, it could drive mobile applications and a host of bandwidth-intensive new services to massive levels.

While the IDA has been tasked to oversee the implementation of the two networks (and public funds are allocated to initiate the projects), the government has also made clear that the network rollout will be conducted through public-private partnerships (PPP). Given the limited success of PPP arrangements in other countries, this is a bold step by Singapore's government designed to catalyze the growth of the infocomm industry, including the broadcasting, interactive and digital media sectors.

If left to market forces, operators tend to react to demand and only upgrade their existing infrastructure when they can justify the capex to their shareholders based on realistic demand forecast. Moreover, it is not only costly to build a wired broadband network of this scale, but operationally difficult as operators have to seek approval from various authorities and property owners to install cables to all the housing blocks and commercial establishments.

The IDA issued the Wireless Broadband Market Development Call for Collaboration (CFC) in March 2006 for the deployment of the wireless broadband network (WBN). The WBN will have 95% outdoor coverage and 90% indoor coverage, and it is likely that the IDA will award the CFC to multiple service providers.

While customers will certainly applaud the availability of low-cost ubiquitous wireless access, the WBN will pose a challenge for existing wireless operators (3G and wireless broadband) to maintain their competitiveness. These operators will have to develop other differentiators to attract customers.

In the same month, the IDA issued a request-for-concept (RFC) for the development of the wired next-generation national broadband network (NBN). The purpose of the RFC is to solicit market feedback on issues concerning the design, financing, construction and operation of the NBN. The NBN is to offer access speed starting from 100 Mbps to more than 1 Gbps symmetric broadband access. The NBN thus creates opportunities for service providers to develop more creative applications for end-users by removing the restriction of bandwidth. This will greatly enhance market competition as it lowers the barriers to market entry.

For years, regulatory bodies around the world have been wrestling with incumbents over last-mile local loop unbundling, but few have succeeded. The NBN will greatly enhance market competition by overcoming the last-mile limitation. To create a level playing field, Singapore's government has indicated that the NBN will be carrier-neutral and open-access, and will provide any service provider connectivity to customers on a wholesale basis on non-discriminatory and non-exclusive terms.

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