Tuesday, February 21, 2006

Fiber coming to Singapore

Om Malik reports FTTH plans from the Singapore government, last week.

Thanks to Dirk van der Woude for the full article text from the Straits Times:

More Competition Among Telcos Likely

By Bryan Lee
Telecoms Correspondent

A SPANKING new ultra-fast national broadband network may be sweet music to the ears of Internet users but it could sound the Last Post for the cosy duopoly enjoyed by SingTel and StarHub.

The new network is expected to supersede existing infrastructure owned by the two telcos and could change how they earn their keep.

While scant details are known about the new network
announced in last Friday's Budget, the industry is already abuzz with talk of
intensifying competition, new players coming in and lower margins.

Shares in both telcos saw a knee-jerk reaction yesterday: StarHub
fell nine cents to $1.95, while SingTel lost one cent to finish at $2.65.

'Any financial assistance provided by the Government may make it
easier for new players to enter this area,' said Credit Suisse analysts Lim Keng
Hock and Clarice Khoo.

Prime Minister Lee Hsien Loong told
Parliament during his Budget presentation that the network was basic
infrastructure needed for Singapore to be competitive.

He said
private companies will be involved in the project over the next several years.
More details will be revealed by the Committee of Supply in Parliament next

Experts see Mr Lee's statement as a signal that fibre-optic
cables will be extended to every home in Singapore - a move that could cost as
much as US$1.2 billion (S$2 billion), said Frost & Sullivan analyst Foong
King Yew.

While Singapore has an islandwide fibre-optic network
owned by SingTel, links from that backbone infrastructure to homes are via
SingTel copper wires and StarHub cables.

These older generation
links, which are also used to transmit voice and pay TV services, will be made
obsolete by fibre-optics which boast much faster speeds, analysts said.

It certainly will not spell the end of SingTel and StarHub as
Internet service providers but they will not continue to enjoy the advantages
that come from owning these 'bottleneck' links. Would-be rivals have complained
about the pricing and inflexibility of leasing these lines.

we still don't know what SingTel's role will be in this new network, I'd be very
surprised if it is excluded entirely from this project,' said Mr David Kennedy,
a Melbourne-based senior analyst at telecoms consultancy Ovum.

Experts said the new network will probably incorporate existing
fibre-optic infrastructure and SingTel's widespread network will likely be part
of it.

StarHub will likely continue as a broadband provider by
leasing capacity from the new network.

Mr Paul Budde, who runs a
telecoms consultancy in Australia, said control of the network is unlikely to
fall solely in the hands of SingTel or StarHub.

He said regulators
must ensure the new network can be accessed by any telco and that preferential
treatment or pricing is not granted to any one company.

intervention is also necessary, he said, to ensure the network is rolled out to
every home.

SingTel and StarHub will also have to learn to compete
differently, focusing more on marketing and customer service, for instance.

They will also likely need to contend with new players or old
rivals like Pacific Internet, which had been curtailed by SingTel and StarHub's
dominance over infrastructure.

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