NetLink-OpenNet deal: IDA to consult public

M1 is first off the mark to deride NetLink's proposed OpenNet acquisition[SINGAPORE] The Infocomm Development Authority of Singapore (IDA) is considering whether NetLink Trust's proposed acquisition of OpenNet would substantially lessen market competition or harm public interest.自存倉To this end, it launched a public consultation on the matter yesterday and will seek inputs from the public and industry players during the next three weeks.But, already, the proposed deal has drawn fire, with an early salvo coming from telco M1, which said the deal favours rival telco SingTel and would stand in the way of the development of a "competitive and vibrant broadband market".Singapore's other telco, StarHub, said it was studying the issue and would soon give its feedback on how it believes the deal will affect the industry.These reactions follow the news last Thursday that NetLink Trust had entered into an agreement with OpenNet's four shareholders - SingTel, SP Telecommunications, Singapore Press Holdings and Canada's Axia NetMedia - to buy their respective stakes for a total sum of $126 million.OpenNet is the consortium behind Singapore's ultra-fast fibre broadband network, while NetLink Trust owns and maintains the manholes and ducts through which broadband cables pass in order to reach buildings and homes.Yap Chee Keong, the chairman of CityNet, NetLink Trust's trustee-manager, said the proposed transaction will "drive greater efficiencies" in the provisioning of services" by creating a single entity that owns and manages the Next Generation Nationwide Broadband Network (NGNBN), as well as the ducts, manholes and central offices.Since being revealed, however, the proposal has come under scrutiny because SingTel is the sole owner of NetLink Trust's units.If it goes through, SingTel would be the only company able to provide services across the entire spectrum quickly and extensively - from building the fibre, owning the channels through which the cables will pass and rolling connectivity out to buildings and homes.The proposal is still subject to the IDA's regulatory approval, since the proposed change in ownership raises concerns that the consolidated entity could substantially reduce competition in the telecommunications market and stymie the continuation of an open-access environment here.However, while SingTel has a 100 per cent economic interest in NetLink Trust, the telco is unable to influence its major operational or management迷你倉新蒲崗decisions, and has no effective control over the trust; it is why it meets IDA's "no effective control" requirement.The majority of CityNet's board is independent.To enhance the actual and perceived independence of the new consolidated entity, SingTel has proposed to cease its role as the key subcontractor for the installation and maintenance of the fibre network within 12 months of the completion of the deal. This would offer other approved facilities-based operators such as StarHub and M1 an opening to step in to provide their services as well.But M1, expressing disquiet yesterday, said through its spokesman: "The Government's intent for the NGNBN is to bring about a competitive and vibrant broadband market via an alternate ubiquitous network that can effectively compete with the only ubiquitous legacy network in Singapore."The proposed consolidation will result in SingTel having 100 per cent indirect ownership of OpenNet, which negates what the Government set out to do and further entrenches SingTel's incumbent position."In a reference to SingTel's proposal to divest its unitholdings in NetLink Trust to under 25 per cent by April 22, 2018, M1 noted that this was an extension from the original 2014 time-frame given."Clearly, there are concerns whether NGNBN's key role and strategic objectives can be achieved," M1 said.It added that the proposal "fails to address the underlying issues impacting customers that have persisted even after three years of OpenNet's operations"; the competitive benefits - in terms of how the transaction will improve the operational efficiency or lower costs for consumers - are "also not apparent".StarHub's chief marketing officer, Jeannie Ong, said: "We are particularly interested in how this transaction could improve OpenNet's poor performance on service provisioning record for non-residential customers."Industry watchers BT spoke to believe IDA's decision will largely be shaped by the feedback provided by other service providers in the NGNBN landscape.Bryan Tan, an intellectual property lawyer and partner in Pinsent Masons, said: "I think the telcos will play a pivotal role with the submissions they make, because they're the ones with direct knowledge on issues of pricing, issues of access, issues of how smooth the current or proposed processes are."IDA's decision - on whether to reject, allow or approve the proposal with imposed conditions - is likely to be published before the end of the year.迷你倉出租