Singtel subsidiary CityNet has completed a deal to buy out its partners in OpenNet, which is building and operating Singapore’s next generation fibre network (Next Gen NBN).
Singtel received regulatory approval for the transaction from the Infocomm…
Singtel subsidiary CityNet has completed a deal to buy out its partners in OpenNet, which is building and operating Singapore’s next generation fibre network (Next Gen NBN).
Singtel received regulatory approval for the transaction from the Infocomm Development Authority of Singapore (IDA) on 21 November, which attached a number of conditions to the takeover.
Singtel accepted the authority’s stipulations. According to the IDA’s diktat CityNet now has 12 months to transfer its 100% holding to the NetLink Trust, which is owned by SingTel but will operate independently from the incumbent.
Singtel is also obliged to give up its role as OpenNet’s chief subcontractor and transfer its relevant expert employees to the NetLink Trust. By April 2018 SingTel will be required to have divested more than 75% of its holdings in the NetLink Trust.
The Singaporean telco struck a deal with its three partners – Axia Asia, SPH Net and SPT Net – in August to buy their stakes for a combined S$88.2m (US$70m) and transfer the shares to its subsidiary CityNet.
Singtel also sold its 30% holding in OpenNet, which it held via a subsidiary, to CityNet for S$37.8m (US$30m) in cash. This gave the deal a value of S$126m (US$100m).
When the IDA announced its conditions it said that in coming to its decision it was focused on OpenNet offering open access and SingTel not effectively controlling the Next Gen NBN.
It also wanted to ensure that wholesale pricing was regulated properly, that OpenNet was offering universal service, and that a good quality of service would be provided.
SingTel led the OpenNet consortium that won the ultra-high-speed broadband network tender five years ago. OpenNet boasts that its network can deliver speeds of 1 Gbps. It passes about 1.2 million residential and 26,000 commercial premises across the sovereign city-state.