|
|
Boasting, in 2009, a mobile penetration rate of 141% and an internet network where nearly 100% of internet households had fixed broadband access, Singapore provides a highly sophisticated and progressive telecommunications market. The local telecoms sector has been quick to embrace technological developments, moving towards ever greater access bandwidth, from 2G to 3G and beyond. StarHub, the second largest telecoms operator in Singapore – behind incumbent SingTel – was launched in 2000 when the government announced its plans to completely liberalise the telecoms market by 2002. The bulk of StarHub’s business has been focussed on consumer and corporate telecoms, but StarHub is now demonstrating growing, and increasingly public, interest in wholesale and connectivity issues. According to Benjamin Tan, VP of wholesale and international services, StarHub was early to break into what he terms: "the monopolistic backhaul services market." StarHub offers international wholesale voice services to international carriers as well as to service-based and facilities-based operators in Singapore. As Tan explains: "We are not new in the telecoms wholesale business in Singapore, having been one of the wholesale players there since 2001. We provide a wholesale alternative to international carriers and domestic retail service providers for corporate data services and bandwidth."
"It used to be that where we had spare capacity, we would wholesale it," says Neil Montefiore, who became CEO of StarHub in January 2010 following the retirement of Terry Clontz. "But we’re looking at the wholesale market more enthusiastically now than we used to." Montefiore’s renewed enthusiasm is probably driven by the fact that he foresees a continued growth in demand for international capacity. "The destinations in particular are changing. More and more, we see China coming up on the list of countries that need capacity, as well as the traditional European and US areas."
Montefiore’s main concern in this area is how StarHub is charging for international capacity: "More and more we want to charge depending on the quality of service required. At the moment, we charge flat rates, but not everyone needs high quality and low latency. We need to differentiate the services we provide."
Securing a landing
In recent years, StarHub has been taking a much more active role in infrastructure development in the region. In 2008, it built its own landing station for the Asian American Gateway (AAG) cable system. "Through this new cable landing system," says Tan, "StarHub is able to offer an alternative landing point for new subsea cable systems, thereby enhancing Singapore’s position as a major IP transit hub for the region." The following year, StarHub joined the consortium building the Asia-Pacific Gateway submarine cable system, which will link Malaysia, Singapore, Thailand, Vietnam, Hong Kong, the Philippines, Taiwan, China, Japan and South Korea.
In January 2011, the telco announced plans to to build the Asia Submarine-Cable Express (ASE), a 7,200km undersea cable system which will directly link Singapore to Japan, the Philippines and Hong Kong, in a consortium with NTT Communications, PLDT and Telekom Malaysia. "Similar to our participation in other projects such as AGG, our role in the ASE project is part of our overall plan to continuously upgrade our international networks in terms of resiliency and capacity," said Jeannie Ong Bee Koon, head of corporate communications at StarHub. The ASE cable will carry over 15Tbps and will incorporate 40Gbps optical technologies, with the capacity to incorporate 100Gbps technology in the future, and is designed to avoid earthquake and typhoon-prone regions, while covering the shortest possible distance between Singapore, Hong Kong and Japan to ensure maximum reliability and minimum latency.
Matt Walker, a principal analyst at Ovum, says: "Recent investment in subsea cables around south east Asia has helped to lower prices of capacity for carriers like StarHub, and significantly improve the performance of the network: providing lower latency, increased resiliency in the event of a cable cut, more choice, and so on." Walker continues: "There will never be ‘enough’ undersea bandwidth, just as there is never ‘enough’ on land."
StarHub is also a member of the Conexus Mobile Alliance, which was formed to enhance its members’ competitiveness in international roaming and corporate mobile services in their own countries and across Asia-Pacific.
Everyone in the business appears to agree with the importance of being prepared for significant, or even exponential, growth in bandwidth demand. "Investment is necessary for future demand and growth," says Tan, "especially with Singapore’s Next-Generation National Broadband Network (NBN) now in place."
National Broadband Network
Singapore’s regulatory authority, the Infocommunications Development Authority (IDA), has masterminded the development of a new super-high bandwidth access network. With government funding, it has implemented development of the fibre-based next-generational network, which has played a huge role in the region’s development.
The development of the NBN has been separated into the passive and active network infrastructure. The consortium OpenNet, which includes incumbent SingTel, has begun the construction of the passive infrastructure. In turn, StarHub’s wholly-owned subsidiary – Nucleus Connect – is designing, building and operating the active infrastructure (the OpCo), which will provide wholesale bandwidth services to retail service providers. "OpenNet and Nucleus Connect are meant to be functionally and structurally separated entities, so it should provide open and fair access to all seekers," said Sachin Gupta, Asia Telecoms Research, Nomura. "It is still in a relatively early stage, but customer take-up is still very slow. Over the coming six months we should see this accelerate."
Montefiore clearly feels more optimistic about the implications of the NBN, though: "It’s quite an advanced project now. The first customers came on in August last year, and we’ve so far covered about 60% of the households in Singapore. We hope to have passed about 95% of households by 2012." With customers seeking minimum speeds of 100Mbps downloading and 50Mbps uploading, Montefiore believes that Singapore has the potential to be "one of the fastest countries in the world, when it’s complete." Via the NBN, Nucleus Connect aims to provide carriers with bespoke network solutions ranging from point-to-point to a fully meshed configuration, and from best effort to real time. The growth opportunities generated by the NBN should also provide StarHub with access to over 20,000 non-residential buildings around Singapore, which it regards as a significant business opportunity.
The development of infrastructure is a major focus to StarHub in coming years: "In a heavily penetrated market like Singapore, which is reaching an astounding 150% rate, smartphone devices are rapidly being adopted and putting pressure on our mobile broadband network," said Ong. "Couple that with our NBN and you can see the importance of having a good international infrastructure, especially given that most of our data traffic goes overseas. ASE will provide additional diversity for our networks."
To Neil Montefiore, the technological developments taking place in Singapore are the most significant. He says: "We still need to be prudent, by taking every opportunity to adapt and grow our business. The worst that could happen to StarHub would be not to change with the market and technologies."
key facts |
| History: StarHub was launched in 2000, following the government’s announcement that telecommunications in Singapore would be completely liberalised by 2002. Since then, it has become one of Singapore’s leading innovative info-communications providers. Ownership: StarHub, listed on the main board of the Singapore Exchange since October 2004, is a component stock of the Straits Times Index and the MCSI Singapore Free Index. Its top direct shareholders are Asia Mobile Holdings, NTT Communications Corp and Aranda Investments. CEO: Neil Montefiore Financials: $2.15 billion operating revenue in 2009, an increase of 1% from the previous year. Customers: In addition to its home and business customers, StarHub provides voice and data services and intelligent network services for international carriers and resellers. Services: StarHub operates an extensive fixed business network that provides a wide range of data, voice and wholesale services. It also operates Singapore’s fastest two-way HSPA+ mobile network and an island-wide HFC network that delivers multi-channel cable TV services as well as ultra-high speed residential broadband services.
|
