Author: kktan
TELCOs – BT
No sweat for telcos as new law nears
While the proposed changes to the Telecommunications Act will give the Ministry of Information, Communications and the Arts (Mica) more teeth, analysts believe there is little chance of telcos being bitten hard if they are passed, for now.
The amendment bill, which passed its second reading in Parliament yesterday, will, among various things, give the minister the power to order the separation of a telco.
This attempts to check anti-competitive behaviour by a telco that might exploit its involvement in various points along the supply chain at the expense of its competitors.
Yaacob Ibrahim, Minister for Information, Communications and the Arts, told Parliament yesterday that a telco operator which controls the network infrastructure, while having a toe in the wholesale and retail services markets as well, may lack commercial incentive to open up the services to its competitors.
If this amendment is passed, the telco industry will be the first one in Singapore subject to the possibility of operational separation or more drastic structural separation.
The Next Generation National Broadband Network (NBN) set-up, for example, illustrates both kinds. OpenNet – which is rolling out the network infrastructure – is structurally separate from SingTel, one of OpenNet’s four shareholders. SingTel does not have effective control of OpenNet.
Further downstream, StarHub, on the other hand, has a wholly owned subsidiary called Nucleus Connect which buys infrastructure from OpenNet and sells it to retailers. Nucleus Connect is subject to the milder operational separation. It has separate branding and physical premises from StarHub, but the latter retains its shareholding in it.
While separation has been built into the very structure of the NBN so that new players are not deterred from entering the market, the amendment aims to ensure that the same is true for other areas of the industry.
The need to split up an incumbent telco, however, might depend on the existence of more new players, and some believe that such a day has not yet come.
‘It could be good that there’s increased competition. (But) the Singapore market is quite small. Even if you want more competition, at the recent auction of the additional bandwidth, you didn’t see people coming in other than the three incumbents,’ said Carey Wong, OCBC Investment Research analyst.
SingTel called the separation order power ‘unnecessary’ in its response to the proposal. In Australia, its subsidiary Optus is arguing for more regulation of its rival, Telstra. Australia is struggling with the mechanics of Telstra’s structural separation, as part of the rollout of its own NBN.
An analyst with a local house believes that the way the NBN is structured here precludes the possibility of a similar separation order being enacted, at least in that respect. ‘It’s more of a signal to the telcos,’ he told BT.
Dr Yaacob stressed that the government would not use the power of the separation order frivolously. ‘As far as possible, the bill provides clear conditions and limitations under which a separation order can even be considered,’ he said.
The amendments proposed will also raise the ceiling on the financial penalty that can be levied on a telco, from $1 million to 10 per cent of the company’s annual revenue for licensable services. For even the smallest telco, M1, this is a ceiling of almost $60 million, based on figures from its last financial year.
M1, in its response last year, said that the increase could cause market disruption. ‘A stiffer fine only serves to transfer investible resources to the government and . . . slow down technology/infrastruc- ture deployment by the operator to rectify its non-compliance,’ it said.
Last week, it was fined $300,000 for the disruption of its services earlier this year. The higher penalty ceiling would have applied to the code of practice that M1 had breached. The telco has decided to appeal against the ruling.
‘Notwithstanding the higher penalty ceiling, the actual quantum of penalty imposed by IDA will continue to be based on the facts and severity of each case,’ Dr Yaacob said.
The bill is now slated for its third reading in Parliament, before it can be passed into law.
TELCOs – BT
No sweat for telcos as new law nears
While the proposed changes to the Telecommunications Act will give the Ministry of Information, Communications and the Arts (Mica) more teeth, analysts believe there is little chance of telcos being bitten hard if they are passed, for now.
The amendment bill, which passed its second reading in Parliament yesterday, will, among various things, give the minister the power to order the separation of a telco.
This attempts to check anti-competitive behaviour by a telco that might exploit its involvement in various points along the supply chain at the expense of its competitors.
Yaacob Ibrahim, Minister for Information, Communications and the Arts, told Parliament yesterday that a telco operator which controls the network infrastructure, while having a toe in the wholesale and retail services markets as well, may lack commercial incentive to open up the services to its competitors.
If this amendment is passed, the telco industry will be the first one in Singapore subject to the possibility of operational separation or more drastic structural separation.
The Next Generation National Broadband Network (NBN) set-up, for example, illustrates both kinds. OpenNet – which is rolling out the network infrastructure – is structurally separate from SingTel, one of OpenNet’s four shareholders. SingTel does not have effective control of OpenNet.
Further downstream, StarHub, on the other hand, has a wholly owned subsidiary called Nucleus Connect which buys infrastructure from OpenNet and sells it to retailers. Nucleus Connect is subject to the milder operational separation. It has separate branding and physical premises from StarHub, but the latter retains its shareholding in it.
While separation has been built into the very structure of the NBN so that new players are not deterred from entering the market, the amendment aims to ensure that the same is true for other areas of the industry.
The need to split up an incumbent telco, however, might depend on the existence of more new players, and some believe that such a day has not yet come.
‘It could be good that there’s increased competition. (But) the Singapore market is quite small. Even if you want more competition, at the recent auction of the additional bandwidth, you didn’t see people coming in other than the three incumbents,’ said Carey Wong, OCBC Investment Research analyst.
SingTel called the separation order power ‘unnecessary’ in its response to the proposal. In Australia, its subsidiary Optus is arguing for more regulation of its rival, Telstra. Australia is struggling with the mechanics of Telstra’s structural separation, as part of the rollout of its own NBN.
An analyst with a local house believes that the way the NBN is structured here precludes the possibility of a similar separation order being enacted, at least in that respect. ‘It’s more of a signal to the telcos,’ he told BT.
Dr Yaacob stressed that the government would not use the power of the separation order frivolously. ‘As far as possible, the bill provides clear conditions and limitations under which a separation order can even be considered,’ he said.
The amendments proposed will also raise the ceiling on the financial penalty that can be levied on a telco, from $1 million to 10 per cent of the company’s annual revenue for licensable services. For even the smallest telco, M1, this is a ceiling of almost $60 million, based on figures from its last financial year.
M1, in its response last year, said that the increase could cause market disruption. ‘A stiffer fine only serves to transfer investible resources to the government and . . . slow down technology/infrastruc- ture deployment by the operator to rectify its non-compliance,’ it said.
Last week, it was fined $300,000 for the disruption of its services earlier this year. The higher penalty ceiling would have applied to the code of practice that M1 had breached. The telco has decided to appeal against the ruling.
‘Notwithstanding the higher penalty ceiling, the actual quantum of penalty imposed by IDA will continue to be based on the facts and severity of each case,’ Dr Yaacob said.
The bill is now slated for its third reading in Parliament, before it can be passed into law.
SingTel – BT
Indian police raid Bharti, Vodafone offices
(NEW DELHI) Police on Saturday raided offices of two of India’s biggest telecom firms, Bharti Airtel and Vodafone Essar, in a widening probe into alleged wrongdoing in the awarding of mobile spectrum.
India’s top federal police force, the Central Bureau of Investigation (CBI), searched offices of Bharti Airtel, and the Indian unit of Vodafone, part of Britain’s Vodafone Group, as well as senior former government telecom officials, a CBI spokeswoman said.
The searches involved alleged irregularities in the distribution of second-generation (2G) mobile spectrum between 2001 and 2003 when the previous Hindu-nationalist Bharatiya Janata Party (BJP) was in power, the spokeswoman said. ‘The searches were in connection with allegations that have been framed,’ she said.
The raids were part of an increasingly sprawling police investigation into awarding of spectrum that has engulfed the current Congress-led government and threatens to taint the previous BJP government which ruled until 2004.
The BJP accused the Congress government of seeking to blacken the opposition party’s name and nicknamed the CBI ‘the Congress Bureau of Investigation’. BJP spokesman Prakash Javadekar said: ‘What is happening is part of a political conspiracy to divert attention away from the government.’
The raids come as a former Congress telecoms minister is on trial with 13 other top government and other officials over an alleged multibillion-dollar corruption scandal involving the allocation of mobile spectrum in 2008.
A Raja, telecoms minister from 2007 to 2010, is the central figure in the case that has rocked Prime Minister Manmohan Singh’s administration and helped make corruption one of India’s hottest political issues.
Responding to the raids, a spokesman for Bharti Airtel, in which SingTel has a stake of about 32 per cent, said ‘all the spectrum allotted to us from time to time has been strictly as per the stated government policy’.
Vodafone said the company had acted in ‘complete compliance’ with rules. Britain’s Vodafone bought a 67 per cent stake in Hong Kong-based Hutchison Whampoa’s Indian mobile unit in 2007, renaming it Vodafone Essar.
The CBI alleged in its preliminary enquiry report that the telecoms department increased the spectrum base under late telecoms minister Pramod Mahajan beyond the prescribed limit for a token sum and favoured certain companies, causing a loss to the exchequer. No formal charges have been laid.
The sale of 2G spectrum by the Congress government in 2008 at far below market rates to selected companies could have cost the treasury up to US$40 billion in lost revenue, the public auditor has alleged.
Raja has insisted he was only following the previous BJP government’s policy in awarding mobile spectrum. — AFP
SingTel – BT
Indian police raid Bharti, Vodafone offices
(NEW DELHI) Police on Saturday raided offices of two of India’s biggest telecom firms, Bharti Airtel and Vodafone Essar, in a widening probe into alleged wrongdoing in the awarding of mobile spectrum.
India’s top federal police force, the Central Bureau of Investigation (CBI), searched offices of Bharti Airtel, and the Indian unit of Vodafone, part of Britain’s Vodafone Group, as well as senior former government telecom officials, a CBI spokeswoman said.
The searches involved alleged irregularities in the distribution of second-generation (2G) mobile spectrum between 2001 and 2003 when the previous Hindu-nationalist Bharatiya Janata Party (BJP) was in power, the spokeswoman said. ‘The searches were in connection with allegations that have been framed,’ she said.
The raids were part of an increasingly sprawling police investigation into awarding of spectrum that has engulfed the current Congress-led government and threatens to taint the previous BJP government which ruled until 2004.
The BJP accused the Congress government of seeking to blacken the opposition party’s name and nicknamed the CBI ‘the Congress Bureau of Investigation’. BJP spokesman Prakash Javadekar said: ‘What is happening is part of a political conspiracy to divert attention away from the government.’
The raids come as a former Congress telecoms minister is on trial with 13 other top government and other officials over an alleged multibillion-dollar corruption scandal involving the allocation of mobile spectrum in 2008.
A Raja, telecoms minister from 2007 to 2010, is the central figure in the case that has rocked Prime Minister Manmohan Singh’s administration and helped make corruption one of India’s hottest political issues.
Responding to the raids, a spokesman for Bharti Airtel, in which SingTel has a stake of about 32 per cent, said ‘all the spectrum allotted to us from time to time has been strictly as per the stated government policy’.
Vodafone said the company had acted in ‘complete compliance’ with rules. Britain’s Vodafone bought a 67 per cent stake in Hong Kong-based Hutchison Whampoa’s Indian mobile unit in 2007, renaming it Vodafone Essar.
The CBI alleged in its preliminary enquiry report that the telecoms department increased the spectrum base under late telecoms minister Pramod Mahajan beyond the prescribed limit for a token sum and favoured certain companies, causing a loss to the exchequer. No formal charges have been laid.
The sale of 2G spectrum by the Congress government in 2008 at far below market rates to selected companies could have cost the treasury up to US$40 billion in lost revenue, the public auditor has alleged.
Raja has insisted he was only following the previous BJP government’s policy in awarding mobile spectrum. — AFP
STEng – BT
ST Engg lands $441m supply vessel job
ST Engineering’s US shipyard, VT Halter Marine, has secured a shipbuilding contract worth $441 million from New York-listed Hornbeck Offshore Services Inc.
Under the contract, VT Halter will construct eight 97.2 metre long offshore supply vessels (OSV) – the Super 320 – with options for up to 24 more, the company said yesterday.
The Super 320 design is an enlarged version of the 88-metre platform supply vessel, HOS Coral, which VT Halter delivered to Hornbeck in March 2009.
Particular attention to stringent regulations for environmental stewardship was given to the design of Super 320, which VT Halter had developed for Hornbeck.
The OSVs will include a double-hull that eliminates any fuel storage adjacent to the sideshell, and propulsion machinery that meets the requirements of EPA Tier 3 for stack emissions.
It will have about 20,900 barrels of liquid mud carrying capability, 1,102 square metres of deck area and a fire-fighting class notation.
These vessels will be constructed in VT Halter’s yards at Moss Point Marine and Halter Moss Point in Mississippi.
Construction of the first vessel is expected to commence in the first quarter of 2012 while engineering work has already begun.
Deliveries of the first and eighth vessels are planned for October 2013 and September 2014 respectively.
The first option for the additional vessels is required to be exercised by September 2012 and may be exercised individually or in a series.
Delivery dates for option vessels are about 26 months following the option exercise.