Update on Next Generation Nationwide Broadband Network Rollout

Mr Speaker, Sir, IDA has completed its review of OpenNet's rollout of the Next Generation Nationwide Broadband Network (Next Gen NBN), and is satisfied that OpenNet has fulfilled its obligation to deploy the Next Gen NBN to 95% of homes and businesses as of mid-2012.

The Next Gen NBN's Effective Open Access industry structure has created a more vibrant and competitive broadband industry. Before the Next Gen NBN was introduced, only four Internet Service Providers (ISPs) were offering services. Today, 22 Retail Service Providers (RSPs) and eight Operating Companies (OpCos) are operating in the Next Gen NBN market. Some offer promotional prices for Next Gen NBN 100 Mbps plans from as low as $40 per month, significantly cheaper than equivalent non-Next Gen NBN offerings.

Consumers are also benefiting from other attractive terms and packages. These include no contract lock-in periods and the bundling of innovative value-added services, such as interactive TV applications, cloud services and online learning resources by RSPs. Several smaller service providers and new entrants also offer differentiated plans to meet the needs of specific user segments, such as gamers.

Sir, in less than two years since the launch of fibre services, more than 220,000 households, or close to 19% of households, have taken advantage of the competitive pricing and innovative packages, and are now subscribers to fibre services. This take-up compares very well with similar NBN deployments around the world. We can expect more households to take up fibre services as consumers' existing broadband contracts expire and RSPs continue to offer competitive plans and innovative services.

Although OpenNet has fulfilled its mid-2012 rollout obligation, there are still homes and businesses that OpenNet will need to cover. OpenNet is aware that it has to provide fibre services to any physical address upon request under its Universal Service Obligation (USO) from 1 January 2013 onwards. OpenNet's obligation also includes progressively rolling out fibre to new homes and buildings that are being built over time.

Sir, I understand that OpenNet is facing some delay in rolling out fibre to the remaining homes and businesses, because it has taken longer than expected to work out the rollout arrangements with its subcontractor. IDA has been engaging the parties involved throughout the course of the Next Gen NBN project and has expressed grave concerns to them over the delays. It has instructed the parties to commence works for the fibre rollout to the remaining consumers outside of the 95% mark. I understand that the parties have since come to arrangements to continue the fibre rollout, which will be progressively implemented in phases. OpenNet and its subcontractor have informed IDA that they expect the remaining homes to be covered within nine months.

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While progress has been made, IDA remains concerned as this rollout schedule implies that OpenNet will have difficulties meeting its USO obligations. IDA will continue to press OpenNet for a quicker resolution and work with the parties so that all consumers will be able to enjoy the benefits of the Next Gen NBN.

I want to thank the Minister for the comprehensive response. I have three supplementary questions. The enterprise take-up of NBN services has been much slower than expected. My first question is how many orders OpenNet is able to process each week, and whether the quota has increased and by how much so that service activation delays for its customers asking for services are minimised? The last question is what happens if OpenNet does not meet the Universal Service Obligation (USO) after 1 January 2013?

I thank Mr Ong for the questions. On his first question regarding the orders and the quota, he may have heard that the recent NetCo interconnection offer ICO revision, OpenNet has already increased their provisioning capacity to 3,100 orders per week from the 2,050 previously, that they have agreed upon. They have further put in place the mechanism to adjust the provisioning capacity on an on-going basis to meet the changing demands and reduce the waiting time for service activation. On his second question, as I have mentioned earlier, Sir, IDA remains concerned and will continue to press OpenNet for a quicker resolution. Should OpenNet not be able to meet the USO on 1 January 2013, the regulator, that is IDA, will have to carefully examine the conditions under which they are not meeting the obligations and decide on the appropriate responses.

Sir, I would like to ask Minister for clarifications. Just now, Minister mentioned that they are given nine months to complete all the rest. Is that correct? And, I would like to know what is the reason for the delay – is it shortage of manpower? There are quite a lot of negative feedback from those recently completed BTO flats – Jade Spring, Dew Spring – and even condominiums, like NorthWood, which has been completed for two to three years and still there are no OpenNet services.

Sir, the nine months timeframe is not given by IDA. It is a submission by OpenNet and they have sub-contracted it so that they finish the remaining buildings and homes beyond the 95% mark within the next nine months. There are several reasons that they have given to us as to why there was a delay. One of which, which I have mentioned in my reply, is that they have some commercial arrangements that they have to make with the sub-contractor beyond the 95% mark. We have been pressing them for an early resolution. We have now been able to get them together and they have agreed to have the rollout as soon as possible. They will submit the plans to IDA and IDA will look at them very carefully to ensure that the rollout plan will meet the demands, as mentioned by the Member. But, certainly, we must recognise that beyond the 95% mark, the area that they have to cover is very, very wide and so, it is not possible for them to cover each area with the same speed and frequency as we expect for the 95% rollout. But, certainly, we will continue to press OpenNet and their sub-contractor to ensure that they can roll out the remaining 5%, in this case, more than 5%, because of the new build, as soon as possible.

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