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OpenNet bags Singapore broadband deal


September 27, 2008

OpenNet bags Singapore broadband deal
A SingTel partnership on Friday pipped a consortium led by its No. 2 rival StarHub to win a bid to build Singapore's planned ultra high-speed broadband network, reported Reuters.

Singapore Telecommunications Ltd's grouping OpenNet comprises Canada's AXIA NetMedia , Southeast Asia's largest newspaper publisher Singapore Press Holdings Ltd (SPH) and Singapore Power's telecoms unit.

SingTel and AXIA each hold a 30 percent stake in the consortium, while SPH has 25 percent and SingPower's unit holds 15 percent.

"OpenNet's proposal offers attractive wholesale prices that can stimulate a vibrant and competitive retail market," the Infocomm Development Authority (IDA), Singapore's telecoms regulator, said in a statement.

Rival StarHub's Infinity consortium included Singapore's No.3 mobile player MobileOne Ltd and Qatar Investment Authority, the Middle Eastern state's investment vehicle.

IDA declined to disclose specific details on why the bid by SingTel's consortium was chosen over that of StarHub's, but said key factors included wholesale prices, infrastructure quality and the bidder's financial position.

SingTel is likely to invest about S$2 billion ($1.4 billion) to design, build and maintain the network infrastructure, while the government will support its rollout with a grant of S$750 million, the IDA said.

The network, called the Next-Generation National Broadband Network, will allow users to surf the Web at speeds of at least 1 gigabit per second -- 10 times faster than those available now -- when it is fully completed by 2015.

The Next Generation National Broadband Network is part of state-owned IDA's Intelligent Nation 2015 or "iN2015" blueprint to give the Asian financial services hub seamless connectivity.

Under its proposal, OpenNet has committed to complete its fibre network rollout to 60 percent of households and buildings by 2010 and extend coverage to 95 percent by 2012.

IDA said OpenNet will deploy and own all the fibre optic cables and also use SingTel's existing infrastructure where necessary.

SingTel will eventually transfer the fibre optic assets -- including ducts, exchange buildings and manholes -- to a neutral party, which will be independent and separately managed, possibly under a business trust, the IDA said.

"The capital released will be redeployed to other businesses and for capital management initiatives," SingTel said in a statement.

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