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SINGAPORE : Telecommunications service provider StarHub has won the bid to operate Singapore's Next Generation National Broadband Network (Next-Gen NBN).
It will establish an operating company (OpCo) called Nucleus Connect to design, build and operate the infrastructure. Nucleus Connect will be a wholly-owned subsidiary of StarHub, with plans to begin commercial operations in the first quarter of next year.
The Infocomm Development Authority (IDA) said it was StarHub's competitive edge that clinched the deal.
Nucleus Connect will be a separate legal entity from StarHub. This will allow it to service retail providers on a fair basis.
Yong Ying-I, chairman, IDA Singapore, said: "With such a structure, retail service providers can obtain wholesale bandwidth services from Nucleus Connect, and offer a wide range of service at competitive prices to end users."
The Singapore government will provide a grant of up to S$250 million to Nucleus Connect for the project. Together with the grant of up to S$750 million for the Next-Gen NBN Network Company, OpenNet, the government is investing up to a total of S$1 billion to put in place the Next-Gen NBN.
StarHub expects to spend about S$1 billion for the network over the 25-year period of the licence. The company does not expect the project to have any impact on its bottom line.
StarHub beat other contenders which included major telcos like Singapore Telecommunications (SingTel) and MobileOne (M1), as well as IntelliNet consortium - comprising Axia NetMedia and Cisco Systems.
StarHub's CEO, Terry Clontz, said: "With the fibre optic-based Next-Gen NBN being extended directly to homes and businesses, Singapore will benefit from a robust national infrastructure that will serve the country's broadband needs well into the future."
The Next Generation National Broadband Network is part of Singapore's "Intelligent Nation 2015" project to provide seamless connectivity around the island-state.
Nucleus Connect will eventually provide nation-wide ultra-high speed broadband access of up to 1 Gbps, linking business users at the workplace, and Singaporeans at home, schools and other premises.
It will also provide wholesale broadband connectivity to other operating companies and retail service providers at competitive prices that will be regulated by IDA.
Nucleus Connect will work together with OpenNet on a coordinated nationwide rollout of the network. The OpenNet consortium comprising SingTel, Axia NetMedia, SP Telecommunications and Singapore Press Holdings, had earlier won the contract to lay the fibre-optic cables for the network.
SingTel said it will continue to develop feature-rich services, including ultra high-speed communications and home entertainment, in preparation for the opening of the fibre access market.
Singaporeans can expect to have ultra-high broadband connectivity in 95 per cent of homes and offices by June 2012. Consumers can also expect lower broadband prices.
Kenneth Liew, senior market analyst, IDC Asia Pacific, said: "From the wholesale price which IDA has announced for 100 megabits per second, as compared to what StarHub is offering at S$50-plus to S$60 for 100 megabits per second, it is likely that it will drop by 10 to 20 per cent."
With the ultra-high broadband speed, users can enjoy high definition video that can be downloaded in mere seconds. They will also have access to higher quality interactive games, or even new services like getting medical advice from the comfort of their homes.
Meanwhile, telco M1 has expressed disappointment that it was not selected by IDA to set up the OpCo of the Next-Gen NBN.
Karen Kooi, Acting CEO of M1, said: "Nevertheless, M1's plan to be a retail service provider remains on track and we look forward to working closely with the appointed OpCo." - CNA/ms/al
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