The fibre is arriving on time, but will Singapore's NBN stay fair?

Three years after it was unveiled on paper, Singapore's new fibre optic network connected its first home at a location called Cantonment Close, just off one of the world's busiest ports, in a simple ceremony a fortnight ago. The fibre is still unlit and the commercial services will start only in the first half of next year, but the event, attended by a full complement of media and Singapore officialdom, marked a milestone for one of the most-watched FTTH (fibre to the home) deployments in the world.

The good news is that the network appears to be on schedule to cover 95 per cent of homes and offices by June 2012, as planned. It will offer speeds of 1GB and beyond, boosting the city-state's competitiveness as a hub for content production and delivery, as well as managed services for multi-nationals.

More importantly, the network is being built with an eye to maintaining openness and competition. In giving out S$1 billion in funds to build it, the government regulator here has demanded a separation of roles, as part of a complex plan to rein in SingTel and StarHub's dominance while not functionally breaking them up in the way that, BT for instance, was broken up as part of its regulatory settlement in the UK.

The physical network is built by OpenNet, which is owned by Axia NetMedia, SingTel, Singapore Press Holdings and SP Telecommunications. OpenNet wholesales the infrastructure to an operating company (OpCo) the first being Nucleus Connect, wholly owned by StarHub.

Buying wholesale from the OpCos are dozens of loosely-defined RSPs or retail service providers. These are expected to sell services to both home and office users.

It's a new model and it has intrigued many market watchers. But now, as the FTTH network takes shape, fresh questions are being asked about how well the complex structure is going to work in practice.

The most important is whether the ground is really level for new entrants. That the rollout will be on time is never in doubt, but the market is buzzing with talk of how SingTel and StarHub could remain dominant forces. Through its 30 per cent ownership of OpenNet, SingTel is receiving part of the S$750 million in public funds made available to the NetCo.

In return, it only has to open up its ducts to OpenNet, so the surface facade of the city is not marred by the digging of roads. SingTel keeps its existing fibre network, which is linked up to the “kerb” or a regional distribution point.