SingTel subsidiary CityNet has won regulatory approval to take over OpenNet, which is responsible for building and operating Singapore’s next generation nationwide broadband network (Next Gen NBN).
Singtel agreed to buy out its partners in the joint…
SingTel subsidiary CityNet has won regulatory approval to take over OpenNet, which is responsible for building and operating Singapore’s next generation nationwide broadband network (Next Gen NBN).
Singtel agreed to buy out its partners in the joint venture – Axia Asia, SPH Net and SPT Net – in August for roughly S$126m (US$101m).
Today the Infocomm Development Authority of Singapore (IDA) greenlit the acquisition, but attached a number of conditions to the approval which will come in two phases.
IDA recommends that CityNet acquires 100% of OpenNet and then transfers OpenNet’s assets into the NetLink Trust, which is owned but not controlled by SingTel, within 12 months.
The state-owned incumbent will also relinquish its role as OpenNet’s main subcontractor and transfer its relevant employees and expertise to the trust. By April 2018 SingTel will be required to have divested more than 75% of its holdings in the NetLink Trust.
In the wake of the deal announcement in the summer SingTel’s rival operators had called on the regulator to impose strong remedies to ensure the change in ownership would not harm competition.
In a statement today SingTel said it had 14 days to assess the regulator’s proposals, which are in line with what the incumbent had previously suggested.
IDA executive Leong Keng Thai said: “IDA agrees with the comments from the industry and public that stronger safeguards need to be put in place to better mitigate potential competition concerns.
“The safeguards will help to enhance the independence and neutrality of the post-consolidation entity from SingTel, particularly for the extended period before SingTel divests its unitholdings in the NetLink Trust.”
IDA said that in coming to its decision it was focused on OpenNet offering open access, SingTel not effectively controlling the Next Gen NBN, making sure wholesale pricing was regulated properly, that OpenNet was offering universal service, and that a good quality of service would be provided.
SingTel, which offers quad-play services, led the OpenNet consortium that won the ultra-high-speed broadband network tender in the sovereign city-state five years ago. OpenNet describes Next Gen NBN as “the world’s first nationwide all-optical fibre platform” and says it is capable of delivering speeds of 1 Gbps and above to homes, businesses and other premises. OpenNet’s network passes about 1.2 million residential and 26,000 commercial premises.
