Residential customers in Singapore connected by the
country’s carrier-neutral FTTH operator, Nucleus
Connect, will soon be able to pick and choose between different
David Storrie: multi-tiered approach has challenges. If
vertically integrated, everything is under your own
The Singapore telecoms regulator is commissioning the
development of a set-top box that will allow customers to take
services from different telecoms operators at the same time via
the country’s next-generation national broadband
The box — which will bring the market in telecoms
right to consumers’ homes — will be
connected to the national carrier-neutral fibre-to-the-home
network, which is operated by a local company, Nucleus Connect.
"The project is being managed by the government and the plan is
to have the specification by the end of this year," says
Nucleus Connect’s CEO, David Storrie. Following
that, the box will be available in prototype in the second
quarter of 2011, he adds.
The FTTH network that Nucleus Connect operates was launched at the end of August 2010 with
coverage reaching 55% of the island republic. Building
continues and the system is on schedule to reach 65% by the end
of the year.
In three years coverage will effectively be nationwide: from
the start of 2013 the project will have a universal service
obligation, with Nucleus Connect — the operator
— and the separate infrastructure owner required to
connect any home or business in seven days.
Once the new set-top box is available, customers will be able
to take services from several different operators at once via
the same fibre, choosing from each according to price and
availability. It will bring an unequalled level of competition
to Singapore’s residents and businesses.
The FTTH project has already seen an increase in competition
between different operators in
Singapore. On September 1, the day after the network was
launched, two providers offered a 100 megabits a second service
via the fibre, taking other operators by surprise, and one of
them had a special one-day-only price offer. "They expected 300
customers on the day and got 1,000," says Storrie. "We
didn’t expect so many in the early days."
Singapore is one of the first countries to build a nationwide
carrier-neutral network — though it has taken what
some regard as a remarkably complex approach. The Infocomm
Development Authority, the government regulator, decided that
the network would be built by one company and then operated by
The Next Generation Nationwide Broadband Network, as the
project is called, is designed to help Singapore achieve its
aspiration to become "an intelligent nation and a global city",
a strategy called Intelligent Nation 2015 or iN2015.
The aim is to offer competitively priced ultra-high broadband
speeds of one gigabit and more to all companies and residents
After a competition, the IDA awarded the construction contract to OpenNet, a
consortium led by a Canadian company, Axia, with 30%
shareholding. Other partners in OpenNet are SingTel, the local incumbent,
which also owns 30%. Singapore Press Holdings has 25% and
Singapore Power’s SP Telecommunications the other
But OpenNet is not allowed to offer services on the NBN.
That’s the job of Nucleus Connect, which won
another IDA franchise contest. Nucleus Connect is 100% owned
by, but physically and operationally separate from, another
Singapore telco, StarHub — a company that started out
as the local cable TV operator. (See GTB interview with Neil Montefiore, CEO of
"The network company is passive and the opco, Nucleus Connect,
is the service provider," explains Storrie.
There’s a further layer of separation, as Nucleus
Connect is a wholesale-only company, with no retail customers
of its own. It provides services to any telecoms operator in
Singapore — not just the existing players in this
highly competitive market, but any others, local or foreign,
that want to bid for business from customers.
Nucleus Connect provides the active network equipment. Huawei
is the main supplier, with OSS/BSS from Alcatel-Lucent. OpenNet
also uses OSS/BSS from Alcatel-Lucent, but that was a separate
decision, he says.
Experience of the first few weeks shows that this arrangement
"is not working quite as smoothly" as it should, says Storrie.
"It has had its teething problems, but you always expect
When a customer wants service there has to be close
collaboration between three operators: OpenNet has to ensure
the infrastructure is in place and is working; Nucleus Connect
then provides the wholesale service between the resident or
business and the operator; and the actual retail operator
provides the chargeable service to the end user.
This multi-tiered approach "has its challenges", smile Storrie.
"If you’re vertically integrated, everything is
under your own control."
There have been faults: in the first week up to 30-35% of new
installations failed because there was no signal at the network
terminating point in the customer’s premises.
"After seven weeks, we’re now closer to 12%," says
Storrie, speaking to Global Telecoms Business in late October
at the Broadband World Forum in Paris. "We should be down to 3%
in a couple of weeks."
One of the challenges is due to the enthusiasm with which
customers have taken up the service — even though
there still aren’t many services to justify even
the minimum home package of 100 megabits a second.
There is an incentive for connecting quickly: free installation
to residents if they take up the offer while OpenNet is
constructing the network to within 15 metres of their home. If
they refuse then, subsequent installation will cost S$220 (US
And then "service providers have been creative" in offering
service to customers, says Storrie. One company is offering 50
megabits each way, up and down, at only S$59 a month —
or just S$39 to students, just US $30.
Quality of service is split into four classes — best
efforts, mission critical, near real time, and real time
— and the NBN can offer connection speeds in steps of
50 megabits from 100 megabits up to one gigabit a second, and
one company is offering the full rate at $395 a month.
"It’s quite a lot, but it is a gigabit," says
Storrie. "The packages are attractive, though
there’s no real need for that speed yet."
And the service has been launched at the start of the
traditional holiday promotional season: Christmas is coming,
followed by New Year, and then Chinese New Year. New orders are
already coming in at the rate of 150 a day: and the
government’s target is for 350,000 homes and
80,000 businesses to be connected by 2015. That’s
an average of, say, 70,000 homes a year, or 1,400 a week.
Businesses will be the harder challenge, thinks Storrie, as
many already have service from SingTel.
But businesses will need to work with the government, and the
NBN is one of the government’s top projects. "The
government is not pumping all this money into the project for
Storrie believes that the competitive market in Singapore will
intensify over the next few years. "People like BT and Verizon
are waiting for universal service, when we have 100% coverage."
Singapore is already promoting itself as the location for the
Asia hub of many multinational companies — and the
ability of global service providers to connect directly with
office buildings in Singapore via the network would be a
But the structure of the network also means that smaller
operators in Singapore can compete for business with the
giants, such as SingTel, M1 and StarHub. The network provides
no volume discount "so the little guys get a level playing
Though reluctant at first, SingTel itself now interconnects
with the network — because the government said it
would use it, "and that’s a fairly substantial
amount of business". Even small businesses are now saying that
they want to be connected via the NG NBN.
Given that the network is as up to date as it can be in 2010,
how will Nucleus Connect — and, indeed, OpenNet
— take investment decisions in the future? "Once
deployed, there will only be incremental spend on the fibre,"
says Storrie, implying that OpenNet’s side of the
deal will be fairly straightforward.
But for Nucleus Connect, the company will work with Huawei to
ensure it is "at the front edge", he says. "We have access to
all of Huawei’s R&D." Nucleus chose the vendor
because it wanted a turnkey solution, with Huawei bidding with
Alcatel-Lucent against a combination of Cisco and ZTE. "It was
very close at the end of the day."
Nucleus Connect has made a commitment to the Singapore
government that "we will refresh as and when it makes sense",
though he notes that the company will "have a fairly good
argument" to keep costs "about the same".
It’s early, though. "The market is not known yet.
We don’t know what the take-up will be or what the
services will be."
The government has submitted a request for proposals for video
services — essentially an island-wide IPTV service to
be delivered along the NGN into residents’ homes,
via a set-top box with a common set of features.
That’s why the idea of a standard box able to
deliver services from a number of providers has emerged.
The set-top would be able to deliver services from SingTel,
StarHub, M1 and so on, and "you can click on the one you want
as long as you subscribe to the service provider". Even better,
you may be able to consume one company’s offer on
a pay-as-you-go basis, he suggests. Free government information
services would be there too.
The idea was given further impetus in October 2009 when SingTel
won the rights to broadcast football matches from
England’s Barclays Premier League in place of
StarHub — leaving those who had subscribed to StarHub
bereft of their regular fix of Manchester United, Chelsea,
Arsenal and Newcastle.
"They had to go and buy a new set-top box from SingTel," notes
Storrie. So the question was raised: "Why not one set-top?"
While vendors are preparing their proposals to the IDA, Nucleus
Connect is pondering the question of how the platform will
operate. "Would we want to build the platform as well?" asks
Storrie. "It’s attractive." But that depends on
the government’s precise requirements.
"There will be a challenge for vendors as they’ve
never been asked for a multi-provider box before." But
he’s concerned that the market for Singapore, with
only 4.7 million people, will be small.
That’s not helped by the fact that the Singapore
model of how to build a nationwide broadband network has, so
far, not been adopted by any other country.
"Is the Singapore model attractive for other markets? I think
it is," says Storrie. "It is transportable from Singapore but
everyone has to look at what works best."
And the NG NBN is still just a few weeks old. At the current
rate of construction, it won’t be too long before
we see how successful it can be. GTB
GTB interview with Neil Montefiore, CEO of StarHub
GTB report on bidding process for NG NBN
GTB Executive Review on Singapore