IMDA orders NetLink Trust to reduce wholesale fiber access fees

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Singapore’s Infocomm Media Development Authority (IMDA) said it is ordering Singtel’s passive fiber infrastructure operator NetLink Trust to reduce most of its current wholesale fiber access prices as a result of its latest pricing review.

Quick backgrounder: under the IMDA’s Next Generation Nationwide Broadband Network (NBN) plan, NetLink Trust is the current monopoly network company (NetCo) that provides wholesale passive fiber infrastructure for the NBN. NetLink Trust took over the operations of original NetCo licensee OpenNet, which was acquired by CityNet in 2013 under a plan that eventually resulted in NetLink Trust taking over the combined operations of OpenNet and CityNet.

One of the regulatory conditions to approving the merger at the time was that NetLink Trust must comply with NBN wholesale pricing rules. As such, the IMDA reviews NetLink Trust’s Interconnection Offer (ICO) – the commercial agreement between NetLink Trust and active-infrastructure operating companies (OpCos) that governs prices, terms and conditions of services – every three to five years to ensure reasonableness and cost efficiency. The last such review was 2013.

The IMDA announced on Monday it has completed its latest review of NetLink Trust’s monthly recurring fees relating to ICO services for residential connections, non-residential connections, non-building address points (NBAPs) such as lamp posts, bus stops, traffic lights and multi-story car parks, and segment fiber connections (i.e. central office to central office), and has decided that all except the non-residential fees can come down.

ICO service

Current price (S$) 

Revised price (S$)

Residential end-user connection

$15/month

$13.80/month

Non-residential end-user connection

$50/month

$55/month

NBAP connection

$185/month

$73.80/month

CO to CO connection

$6,000/month

$4,328.50/month

Those are wholesale prices, but the IMDA said the price reductions “are expected to be welcomed by retail service providers (RSPs)” and will encourage them to provide more attractive and value-added offerings to customers, as well as support development of more innovative and competitive services as part of Singapore’s Smart Nation push.

Regarding the price increase for non-residential fiber, the IMDA said that with multiple suppliers providing fiber connections to those end-users, “businesses can continue to look forward to competitively-priced retail fiber broadband packages.”

The IMDA said the decision to reduce prices was thanks to the operational efficiencies gained from the consolidation of NetLink Trust, OpenNet and CityNet, while the prices themselves were set with the aim of ensuring NetLink Trust could achieve a reasonable ROI on its nationwide fiber and passive civil infrastructure, and afford to invest in future network enhancements.

The decision marks the first time that the IMDA has ordered a price adjustment on NetCo services since the Next Gen NBN project was launched. The revised prices will take effect in six months.

NetLink Trust CEO Tong Yew Heng said the price adjustments were acceptable.

“We believe the price revisions can ultimately benefit consumers and further drive fiber penetration in residential homes,” Tong said in a statement. “Enterprises are also expected to switch to fiber network services and NetLink Trust is poised to leverage on our nationwide network coverage to capture future growth in the non-residential segment.”

According to NetLink Trust’s most recent stats, its fiber infrastructure passed over 1.4 million residential homes (in other words, basically all of them), and reached 1.3 million residential homes, as of March 31, 2017. The network is also deployed to “approximately 30,000 (or substantially all) non-residential premises”.

NetLink Trust’s owner, Singtel, is currently putting together an IPO to sell off at least 75% of the company before April 2018 (another condition of IMDA’s approval of the NetLink Trust/OpenNet/CityNet merger). In February, the telco appointed DBS, Morgan Stanley and UBS to advise on the IPO, which could take place in Q2 or Q3 this year. Various estimates suggest the IPO could be valued at $2 billion, according to the Straits-Times.

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