Singapore Ready for Full-Scale FTTH Deployment

By: By Lynn Hutcheson, Vice President Communication Components, Ovum RHK
( 1 May 2009 )

After several years of planning, the Infocomm Development Authority (IDA) of Singapore has made its final selection of vendors for the FTTH portion of its Intelligent Nation 2015 (iN2015) project. The IDA is investing S$1 billion ($664 million) to put in place its Next Generation National Broadband Network (Next Gen NBN). Singapore could take the lead in FTTH penetration rate.

The plan is to have 50 percent of all homes and offices in Singapore connected with the Next Gen NBN all-fiber network by 2010, and 90 percent of all homes, offices and schools by 2012. On 3 April 2009 the IDA announced that Starhub’s Nucleus Connect has been selected to design, build and operate the active infrastructure. We believe this is the final piece of the puzzle that will give Singapore the lead in the household penetration rate by 2012.

The government will provide a grant of up to $166 million to Nucleus Connect to support its deployment of this infrastructure. The price of the services has been pre-determined in the contract between the IDA and Nucleus Connect. For example, for 100Mbps residential end-user connection the wholesale price will be $14 per month; 1Gbps will be $80 per month. For non-residential customers, such as offices and schools, the wholesale price will be $50 per month for 100Mbps and $571 per month for 1Gbps service.

The IDA estimates that its $664 million investment will cover only about 20 percent of the total investment required to complete the NBN project. The remaining 80 percent of investment will come from the vendors. This supports the notion that government subsidies are a catalyst for industrial investment and economic growth. Even though the total number of households in Singapore is only about 1.2 million, the realization of nearly 100 percent of households connected with fiber will be a good test for its impact on the social and economic benefits.

IDA chairman Yong Ying-I said, “The Next Gen NBN is a key national Infocomm infrastructure that will enhance Singapore’s competiveness in a globalized 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.”

THE IDA HAS ESTABLISHED AGGRESSIVE GOALS FOR THE ROLLOUT
In March 2006 the IDA decided to create a national high-speed wired and wireless national broadband network called iN2015. The wired network will deliver ultra-fast broadband speeds to all homes, offices and schools. The wireless network will provide ubiquitous wireless connectivity throughout all of Singapore.

The wireless network is up and running, with more than 7,200 hotspots serving over 850,000 subscribers. The wired network plans got off to a slow start and fell about nine moths to a year behind schedule in terms of sending out questionnaires and tenders, collecting proposals and selecting the vendors for the awards. However, the IDA is still claiming it can meet its targeted goals for 2010 and 2012.

SUCCESS FOR SINGTEL’S OPENNET AND STARHUB’S NUCLEUS CONNECT
At the onset of the planning the IDA decided on a structurally separated model for the NBN project, which resulted in two RFPs being issued. The first RFP was for the passive portion of the network and was called NetCo. This RFP was issued in December 2007 and was for $498 million. There were only two bidders for this RFP: a consortium led by SingTel called OpenNet and a consortium led by StarHub. In September 2008, the IDA announced that the consortium OpenNet was winner over StarHub.

The second RFP was issued in April 2008 for the design, installation and operation of the active portion of the network, and was called OpCo. There were four bidders for this RFP, and on 3 April 2009 the IDA announced that StarHub was the winning bidder. This award was for $166 million. StarHub will establish a wholly owned subsidiary, called Nucleus Connect, to manage the project. This new entity will work with OpenNet to roll out the broadband network. Nucleus Connect is expected to invest $664 million over the period of its 25-year lease.