Published September 9, 2008
IDA gives SingTel partial relief from 'dominant licensee' rules
It will enjoy regulatory reprieve for 3 of 6 services in its second request
By WINSTON CHAI

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SINGAPORE Telecom's claim that it no longer has a competitive edge in major business telephony segments is not holding up fully under regulatory scrutiny, with the Government denying most of its requests to be unshackled from the strict regulations that come with its market dominance.
Regulations allow for fairer competition by dictating how a dominant licensee should deal with other service providers.

The Infocomm Development Authority of Singapore (IDA) has decided not to grant SingTel full exemption from 'dominant licensee' obligations across all the market segments.
Under the Singapore Telecom Competition Code, SingTel is subject to a stringent set of operating rules in markets where it is deemed dominant.
These regulations allow for fairer competition by dictating how a dominant licensee should deal with other service providers, such as mandating SingTel to open its infrastructure to others at government-approved prices and conditions.
In October last year, the island's largest telco submitted two requests to IDA for regulatory relief from such conditions in two business markets.
The first was for customers who spend more than $250,000 a year on telecom services, while the second was made up of six business-related phone and Internet offerings.
IDA reached its preliminary decision on SingTel's request after seeking public feedback and factoring in the dissenting views of rival operators M1 and StarHub.
'If IDA were to grant SingTel's request in its entirety, SingTel would be relieved from dominant licensee regulation for all telecommunication services that it provides to government and business customers who spend at least $250,000 per year on telecommunication services,' the regulator said.
Full exemption would mean that SingTel was correspondingly freed from current market stipulations for most of the services it provides to businesses with a telecommunications budget of under $250,000, it said. 'IDA declines to grant SingTel's request in its entirety.'
However, SingTel will enjoy regulatory reprieve for three of the six services it detailed in its second request.
IDA said that the markets for providing backhaul and terrestrial international private leased circuits have become 'increasingly competitive' and the dominant licensee obligations will no longer apply to SingTel for these segments.
In addition, IDA will continue to exempt SingTel in the area of international managed data services. However, 'ex post regulation' will still apply in these three markets to provide an avenue for legal redress should the operator be accused of abusing its market position.
The regulatory pardon, however, will not be extended to the remaining three Singapore-centric services - local leased circuit (LLC), business local telephony service and local managed data services.
SingTel has the most extensive underground data network in Singapore and also has fixed-line phone connections to almost all residential and office buildings.
'IDA has determined that SingTel continues to possess significant market power in the retail LLC market and, therefore, continued application of dominant licensee regulation to services provided in this market is necessary to protect end users, and to promote and preserve competition,' the regulator said.
'IDA has further concluded that, because effective competition has not yet taken root in the business local telephone service, LLC and local managed data services markets, IDA should not grant at this time any exemption in those markets.'
The regulator is seeking views on its preliminary decision. Industry players have until Sept 23 to respond.
A SingTel spokesman said: 'We do not agree with the IDA assessment and will respond to its preliminary decision. The telecommunications market in Singapore is characterised by domestic, regional and global service providers with extensive local and international capacity investments.'
M1 declined to comment on the issue. But StarHub spokesman Michael Sim said that the company fully supports IDA's decision to deny SingTel's exemption request for telecommunications provided to customers who spend more than $250,000 a year.
'We don't believe this market is yet competitive,' he said, adding that StarHub is reviewing IDA's assessment on SingTel's second request.