Telcos take their fight to the next level

SingTel, StarHub and M1 rolling out their ultra high-speed broadband packages

Local telcos SingTel, StarHub and M1 are taking their bitter rivalry from this generation to the next in a services showdown on Singapore’s next information superhighway.

The country’s new fibre-optic backbone opens for business today and the three telcos will go head-to-head on an entire spectrum of new ultra high-speed broadband packages for consumers and businesses.

The first salvo under Singapore’s new era of broadband competition was fired by SingTel yesterday morning with the unveiling of new offerings that take advantage of the massive speed boost that comes with the arrival of pervasive fibre-optic rollout.

M1 followed suit later in the day and StarHub is expected to do so tomorrow.

SingTel also laid months of speculation to rest by announcing plans to compete with StarHub in a third segment – the wholesaling of fibre-optic bandwidth to other players that are keen to offer Internet-related services to local customers.

By dipping its toes into this market, SingTel will be competing directly with StarHub subsidiary Nucleus Connect.

Until yesterday, Nucleus Connect is the only so-called operating company (OpCo) that was sanctioned to resell ultra high-speed bandwidth packages to other Internet service providers on Singapore’s government-backed fibre-optic network.

It received a $250 million subsidy from the Infocomm Development Authority of Singapore (IDA) to help defray its set-up costs.

In return, Nucleus Connect has to play by a strict set of government rules including providing transparent and non-discriminatory pricing to all buyers. In addition, the firm has to be run independently from its parent StarHub as part of IDA’s operational separation mandate.

However, this separation requirement does not apply to SingTel as the firm is not the government-anointed OpCo, according to its Singapore chief Allen Lew.

Exemption from these government rules also means that SingTel could potentially offer discounts or rebates instead of having to abide by the IDA’s equal pricing policy.

In addition, SingTel will also be using its own fibre-optic pipes on top of the ones that are run by Nucleus Connect.

The company plans to use its own fibre-optic backbone to provide connectivity to commercial customers and rely on Nucleus Connect’s infrastructure for the consumer segment only, Mr Lew told reporters at a media briefing yesterday.

Some 4,000 commercial buildings will be wired up with SingTel’s fibre-optic links by this November, including 1,500 that are predominantly used by small businesses, the firm revealed.

‘We’ve been expecting it (SingTel’s plan to wholesale fibre-optic bandwidth). When you have discriminatory pricing, and you have to go in to negotiate, it’s a long and tough process,’ Nucleus Connect chief David Storrie told reporters at a separate media briefing yesterday evening.

‘With our model, it’s clear what you’ll get,’ he stressed, adding that the firm would consider adjusting its pricing to remain competitive.

Five companies have already committed to buying bandwidth from Nucleus Connect. These include the three existing telcos, as well as homegrown communications firms SuperInternet and LGA Telecom.

More could sign up when the fibre-optic network is fully completed in two years’ time, he added.

Some 40 per cent of local households are already wired up with fibre-optics and nationwide rollout is set to be completed by end 2012.

‘I think the number of five we have will grow. Interested parties, especially overseas operators, say they will be back when coverage is complete,’ Mr Storrie said.

On the consumer front, SingTel raised the game with four new consumer plans that promise to double access speeds by charging slightly more than what StarHub charges for its highest-end broadband package today.

By paying $95.90, consumers can enjoy download speeds of 200 Mbps (megabits per second), twice as fast as its rival’s 100Mbps plan, which is priced at $86.88.

Besides allowing speedier movie streaming and music downloads, the company also offers increased uplink speeds of up to 100Mbps. This means that users can upload high-resolution pictures and videos at a fraction of the time of what it would have taken them with today’s cable broadband and ADSL (asymmetric digital subscriber line) broadband packages.

In addition, SingTel is bundling other perks such as high-definition video chats and free Web-based storage and even free movies. Soccer fans can enjoy their Barclays Premier League fix along with their new high-speed broadband plan for $109.90.

‘Fibre is just the basic hygiene factor to get into the home. Offering pure access services doesn’t really make sense,’ said SingTel’s Mr Lew. The company is also offering a lower-end 150Mbps plan for $85.90 monthly.

M1 has claimed the mantle of offering Singapore’s fastest broadband plan for now at 1Gbps (gigabit per second), five times the speed of SingTel’s latest offering. However, users will have to pay a monthly fee of $399 to enjoy the speed boost.

At the same time, Singapore’s smallest operator hopes to offer consumers more bang for their broadband buck with a range of lower speed plans, including one which offers 100Mbps download speeds for $59 a month.

However, M1’s speed advantage is expected to be short-lived as StarHub could match the offer by as early as tomorrow.

‘Incumbents are likely to sell FTTH (fibre-to- the-home) services as faster speeds and pricing is likely to be lower if you compare on a cost per bps basis. I think it will take some time for the FTTH services to become mainstream,’ said telecommunications consultant Soh Siow Meng.


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