Singapore Telecommunications Report Q3 2009

With demand for fixed-line falling and mobile growth slowing, operators across Singapore are increasingly turning to broadband networks as a major focus for their plans. Operators have invested heavily into providing access to the internet, whether it is wireline or wireless, over a number of different devices. M1 became the first in the country to announce the launch of its prepaid mobile broadband services, complementing its current postpaid mobile broadband services which are already offered by rivals SingTel and StarHub. This followed just eight months after M1's decision to enter the fixed broadband market.

In addition, the government-backed iN2015 project is now underway, with SingTel's consortium OpenNet, which includes Singapore Power, Singapore Press Holdings and Axia NetMedia, winning the right to build the city's ultra high-speed broadband network in September 2008. SingTel is expected to invest around SGD2bn (US$1.4bn) to design, build and maintain the network infrastructure, while the government will grant around SGD750mn, according to the Infocommunications Development Authority (IDA). Under the terms of the OpenNet proposal, it will complete the fibre network roll-out to 60% of households and buildings by 2010, extending coverage to 95% by 2012.

Although StarHub - the leading consortium bidder for Singapore's next generation broadband network (NGN) which included rival M1 - was beaten by SingTel's consortium OpenNet, the operator was awarded the right to build and operate a wholesale NGN broadband network across the country. The consortium beat bids from SingTel, M1 and a joint proposal from Cisco and Axia NetMedia, of the US and Canada, respectively. A new subsidiary, Nucleus Connect has been established by StarHub for the purposes of handling the wholesale NGN broadband network. According to Telecomasia.net in April 2009, the government will invest SGD250mn in Nucleus Connect.

The rise in interest in broadband has led us to revise upwards our forecasts. By the end of 2009, we estimate a total of 1.745mn subscribers, after 121,000 net additions were reported to reach 1.383mn in Q109. By the end of 2013, we forecast broadband penetration rates of 96.4%, with subscriber figures of 4.926mn.