Singapore is to claim top rating for its household broadband connectivity after announcing that it's building a state-of-the-art, ultra high speed Internet backbone. The Lion City may be able to match or overtake global and regional broadband leaders like South Korea and Hong Kong for the percentage of households with broadband penetration when its new services are up and running over the next seven years.
However, it's debatable whether the race to high speed delivery of video-on-demand, online and social networks will provide more than marginal sales leverage in these saturated markets, say analysts. The next wave of growth - particularly trade-related - in the larger developing markets of the Chinese mainland and other Asian emerging markets, will require much more broadband width but lower-speed connections, they maintain.
To leverage the advantages of the more sophisticated regional players in the IT sector, the winning strategy will be to provide technical expertise and solutions required by the rapidly growing Chinese and other Asian online companies and consumers, at affordable prices.
Nevertheless, with its Next Generation National Broadband Network (Next Gen NBN), the Singapore digital backbone is on track for full deployment by 2015. Photo Most families will be connected.
By 2010, 60% of Singapore homes and offices are expected to be connected to the Next Gen NBN. This new network will enable speeds from 100mbps to 1,000mbps, as much as 500 times the existing speed of 2mbps, with potential for even higher speeds.
The OpenNet Consortium selected with the winning proposal will design, build and operate the Next Gen NBN, and includes Canada's Axia with local players SingTel, Singapore Press Holdings and SP Telecommunications.
Digital skeleton receives big backing
Building the network will not come cheaply. If the cost was to be passed on to the consumer, the take up rate would be low. So after extensive consultation with the industry, the Singapore government considered this a project of national priority and will pay for the rollout to the tune of US$500 million.
Infocomm Development Authority (IDA), the Singapore government body tasked with this project, is adamant the scheme will be worth it. It says Next Gen NBN will enhance Singapore's economic competitiveness, with the potential for significant economic benefits. Photo Worth the money.
Photo Pervasive fibre-optic network.
"Based on international studies and experience, broadband deployments are projected to bring an increase in annual GDP growth of between 0.5% and 1%," an Infocomm spokesman says. "In addition, when ready in 2015, Next Gen NBN is expected to benefit the entire telecommunications industry."
The idea is that the open access network will give different operators rights to deliver innovative "next generation" applications and services, targeting residential and commercial end-users and opening the local telecom market still further.
The consortium is confident it will be able to meet the tender requirement of delivering high speed broadband at costs comparable or even lower than current costs. Next Gen NBN will provide access to service providers at a mere US$10 per month for households, and businesses will only pay US$33 per month.
This will enable service providers to bundle services and applications to consumers at an affordable cost. Next Gen NBN is also required to install the new network at no charge to homes and buildings - and must continue to do so until 2013.
As a comparison, some 90% of households in the republic are wired for broadband access via cable company StarHub. Its current price range is from US$18 to US$58. While the company does charge a fee for installation, this is usually waived in high density Singapore - and in addition, some landed properties (bungalows, semi-detached houses and terraces) further from the grid can pay as much as US$750 to US$1,350 just cabling to the network. The NetCo is obliged to wire these homes for free for the first 15 metres, which is sufficient for the bulk of landed properties. Photo Students experience the "wireless learning trail".
More critical than the increase in bandwidth, are the applications this increase in bandwidth will make possible. Some applications that are set to become possible are remote medicine, such as providing real time videos in high definition for diagnosis and treatment.
Singapore businesses can also look forward to video conferencing that actually works, instead of the sometimes jerky images and time lags provided today, as well as tools for remote interactivity. Viewers will have excellent quality movies streamed on demand into their homes, while immersive "virtual reality" environments can be created for educational purposes.
Dr Lee Boon Yang, Minister for Information, Communications and the Arts, is very upbeat at what the Next Gen NBN will do for Singapore: "Next Gen NBN propels Singapore to the forefront of broadband development internationally. Soon, Singaporeans will be able to enjoy a richer broadband experience with more choices and at affordable prices."
Growth targets elude top digital players Photo Asia the centre of a broadband growth trend.
The Asia Pacific broadband subscriber base was 171 million by the end of 2008, representing a year-on-year growth of 31.5% and a household penetration rate of only 19.7%, said analyst Frost & Sullivan. Video-on-demand, multi-player online games and video content sharing pushed the trend.
The company says a wide range of technologies, such as fibre-to-the-node, fibre-to-the-building and wireless access would co-exist, but that during the Credit Crunch new services such as Internet provided TV (IPTV) would remain questionable among most fixed line operators due to the high costs involved.
As to developing markets, basic digital subscriber line (DSL) based services would continue to drive the bulk of deployments in the region, but could be expected to face competition from wireless broadband technologies, said Frost & Sullivan's report.
In a later study, technology research firm Gartner said that Singapore will make a dramatic jump in household broadband penetration to 75% in 2012, somewhat behind Hong Kong (with 82%).
But Gartner said the next major wave of advance in the broadband sector will be in the Asia Pacific's emerging markets, with the region contributing the greatest increase globally. The Chinese mainland alone is set to supply 25% of the overall growth in consumer broadband connections.
Hong Kong suppliers of broadband, whether fibre- or wireless-based, are well positioned to provide the operational expertise or consultancy required to establish and build new networks on the Mainland.
For example, City Telecom (HK) Ltd, which pre-qualified to bid for Singapore services, pulled out of the Infinity Consortium but still has ambitious plans in Hong Kong and regionally to develop a large residential broadband market.
The company was quoted as saying it would add five million households to its Hong Kong network coverage over the next two years, after adding 69,000 new broadband subscribers over the past year.
City Telecom (HK) offers its broadband service through the Hong Kong Broadband Network Ltd, which provides home services with transmission speeds of 100 mbps, charging US$24 per month on average.
from special correspondent Ronald Hee, Singapore and Martin Evan-Jones, Hong Kong Head Office
