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Why Fibre broadband is overpriced in Singapore. Email getting expensive to check too...

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  • 1 Post By cherry6
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Old 17-07-2017, 11:52 AM   #1
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Smile Nationalisation of fibre broadband transmission infrastructure (like public roads, transport, water

Nationalisation of fibre broadband transmission infrastructure (like public roads, transport, water etc infrastructure), no?
Just like Singapore gahmen owns all the MRT tracks, carriages, public buses and roads in Singapore and then pays operators (SMRT, SBS(Comfort Delgro), GoAhead, TowerTransit etc) to operate the system within performance standards, shouldn't the government also own all the manholes, fibre optic cables as well? Why should Singapore and be held hostage by the commercial interest of companies like Netlink NBN trust to pay for their fibre internet broadband connection given that as projected, 89% of households in 2017 are fibre broadband subscribers.
What would happen if Netlink NBN fails to properly maintain its fibre optic infrastructure given to the fact that gahmen supervision wrt renewal programmes would be inconvenient given to the fact that Netlink NBN trust property is essentially PRIVATE PROPERTY and thus, the gahmen might need special permission/ court order to inspect such private infrastructure.

Does the lack of gahmen control over such important infrastucture put Singaporeans at the mercy of a monopoly player company to charge every fibre broadband user a fee as it should please although it seems that in the short term, the monthly fee telcos pay Netlink NBN is $15/month as fixed by gahmen. Would costs of living in Singapore continually increase given to the fact that important infrastructure such a manhole , ducts, fibre cables seem to be in the hands of private share holders. Would any other international / professional operator like Tower Transit, GoAhead, ComfortDelgro, SMRT be able to maintain and operate the fibre optic network for a lower fee and thus bring costs savings to Singaporeans. Does the Singapore gahmen lack the oversight and understanding about how a fibre optic network is run and thus is the Singapore gahmen at the mercy of private coporations and other commercial entities?

Just like heavy users of public utilities pay more than those who apply thrift (PUB waterborne fee is 28cents/CuM circa 2016), how is the one size fits all $15 monthly fibre broadband transmission fee fair considering that some people hardly use the internet at home whilst others are heavy broadband data users for 3D games and other heavy graphic applications.

The Singapore gahmen has pushed very hard for fibre broadband and digital TV to be adopted by every home, planning to cancel analogue signals for free to air national TV channels even. I think it would be mistaken if by doing so, it increased the wealth divide amongst Singaporeans, then PAP is destroying the social compact and thus destroying the roots of the independence of Singapore.

News analysis
How will the market like NetLink's safe and unsexy IPO?
Marissa Lee
PUBLISHED JUL 12, 2017, 5:00 AM SGTUPDATEDJUL 12, 2017, 8:21 AM
Large issue size means sentiment will have a big role to play
That Singapore's largest stock market flotation in six years had a sizeable $2.2 billion placement tranche that was two times subscribed is solid proof that the hunt for yield is not over.

NetLink NBN Trust's initial public offering (IPO), which promises investors an annualised dividend yield of 5.43 per cent for the period to March 31 next year, has been likened to a bond IPO for its low risk and return profile.

The analogy seems apt.

The lion's share of the fibre-optic cable owner's turnover - 80 per cent - is regulated revenue under a Regulated Asset Base (RAB) model recently adopted by the Info-communications Media Development Authority.

In particular, NetLink's return on capital for the next five years will be based on a pre-tax weighted average cost of capital of 7 per cent.

NetLink Trust CEO Tong Yew Heng is not worried that wired broadband may get displaced by wireless broadband, delivered via mobile networks. "The fibre network is future-proof because it has unlimited capacity (and) fibre carries a very wide bandwidth

NetLink Trust CEO Tong Yew Heng is not worried that wired broadband may get displaced by wireless broadband, delivered via mobile networks. “The fibre network is future-proof because it has unlimited capacity (and) fibre carries a very wide bandwidth as opposed to mobile,” he said. PHOTO: MARCUS TAN FOR THE STRAITS TIMES
So while it may seem alarming that the regulator's latest revision exercise will slash NetLink's monthly recurring charge for residential end-user connections from $15 to $13.80 a month starting January next year, the regulated revenue should hold steady overall.

Chief executive Tong Yew Heng said: "We should not focus too much on the pricing. Pricing to the end users is a derived number because it is the regulated revenue divided by the number of users.

"As long as the number of users increases, the pricing will come down."

In reality, revenue should rise as NetLink adds to its investment by laying more cables.

But rarely do you find a business that is safe and sexy at the same time, and NetLink is no exception.

Growth, as far as the trust manager sees it, means growing organically in Singapore by expanding NetLink's fibre network and improving its reliability.

Although NetLink expects the roll-out of more Smart Nation initiatives such as the deployment of islandwide sensors to drive growth, the size of this business - which gets booked as NBAP revenue - is still a very small fraction of the whole.

NBAPs are non-building address points, such as traffic lights, Electronic Road Pricing gantries and carparks. NBAP connections are forecast to rake in between 0.3 per cent and 0.4 per cent of total revenue in the next two years.

About 60 per cent of revenue will still come from the monthly fee that telcos and broadband retailers pay it for residential connections.

NetLink is also not yet up to scratch with certain quality standards. It is required by regulation to fulfil 98 per cent of all service orders for residential connections within three days of receiving the request from a telco, but is managing only 91 per cent now. To address this, NetLink is in the process of topping up its spare fibre capacity, with completion targeted by March 2019, but Mr Tong refrained from putting out a definite timeline on when the standards would be met.

Perhaps the biggest risk is whether - or when - the day will come when wired broadband gets displaced entirely by wireless broadband, delivered via 3G, 4G or 5G mobile networks.

Mr Tong sees no substitution risk: "The fibre network is future-proof because it has unlimited capacity (and) fibre carries a very wide bandwidth as opposed to mobile."

An industry report in the prospectus expects commercial launches of 5G services to take place no earlier than 2020. No common technical architecture for the 5G standard has been set yet, although this is a space that might be worth watching.

For now, the larger question is how the market will receive NetLink NBN Trust on its debut. With a massive offer size of $2.3 billion, the supply of units is large so sentiment will have a big role to play.

Correction note: An earlier version of this story said that NetLink's IPO was both safe and sexy. This is the result of an editing error.

A version of this article appeared in the print edition of The Straits Times on July 12, 2017, with the headline 'How will the market like NetLink's safe and sexy IPO?'.
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Last edited by cherry6; 17-07-2017 at 05:22 PM..
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