When Singapore announced its national broadband strategy the world followed impatiently. Singapore Government required a structural separated passive infrastructure operator/developer (NetCo) and an operational separated operating company (OpCo) for its national broadband network infrastructure. Last week, Singapore hit another home-rum by awarding the passive infrastructure (RFP issued late 2007) to OpenNet Consortium which made a proposal far exceeding the minimum requirements of the bid.
There is a series of reasons why these developments are so exciting, especially these days that many countries (including the – so far – European pioneer Greece) are preparing similar nationwide initiatives:
- USO is taken seriously: Although the RFP required a 50% coverage by 2012 and Universal Service Obligation (USO) by 2015, OpenNet committed to 95% coverage by 2012 and universal service by 2013!
- Business demand will subsidize home user’s fiber connections: OpenNet proposal committed to an effective wholesale monthly price per fiber connection at $15 for residential and at $50 for non-residential users.
- Network operation is based on Open Access principles (as opposed to EC’s approach that infrastructure-based competition should be the end-game): Structural separated NetCo and operational separated OpCo are established. This means that [TYPO: a vertically integrated OpCo] NetCo will not be eligible to offer upper layer services over the national fiber infrastructure.
- Effective evaluation criteria: The attractiveness of business plan (i.e. prices, social & industry benefits), weighted a remarkable 43%, the quality of network infrastructure (i.e. technical and operational efficiency levels) weighted 25%, the level of Government grant weighted 22% and the financial proposition and strength of bidder 10%.
- Existing infrastructure is leveraged: The awarded NetCo will use existing ducts, manholes and exchanges, thus reducing cost and wholesale prices and minimizing public inconveniences during roll-out.
- Aiming at high take-up rates by providing incentives to home-owners to connect: Each home/building owner will enjoy waiver of installation charges for the 1st termination point (in the living room) when the network first reaches his/her premise. Fibre installation (surface ducting) charges to 1st termination point will be waived for initial 15m (cost-oriented charges will follow thereafter) – Yes, that’s right, cost-oriented charges.
Nice! Wouldn’t you agree?
