Published June 4, 2009

IDA denies SingTel full regulatory relief

4 of 7 appeals over dominant licensee obligations rejected

By WINSTON CHAI

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(SINGAPORE) After deliberating for 18 months, the Infocomm Development Authority of Singapore (IDA) is standing firm on its decision to deny Singapore Telecom full exemption from government regulations designed to keep the country's largest operator in check.

The telecommunications regulator has officially turned down four of SingTel's seven appeals to be freed from so-called 'dominant licensee obligations' relating to the provision of business telephony services.

Under Singapore's Telecom Competition Code, SingTel is subject to these stringent operating rules in areas where it is deemed to have a commanding market presence. The conditions were put in place to ensure SingTel deals with other telecommunications licensees in a fair and non-discriminatory manner. For example, it requires SingTel to offer other service providers access to parts of its infrastructure under prices and conditions set by the government.

SingTel submitted two appeals for regulatory relief to IDA in October 2007. The first 'customer segment request' applied to corporate clients who spend more than $250,000 a year on telecom services, while the second 'market-based request' was for six business telephony services.

IDA reached a final decision this week after three rounds of public feedback and interviews with other industry players over the past 18 months.

'SingTel's request is far broader than its three previous exemption requests,' IDA's deputy director-general of telecom and post Andrew Haire said in a letter to SingTel on Tuesday.

'If IDA were to grant SingTel's request in its entirety, SingTel would be relieved from dominant licensee regulation for all telecommunication services it provides to government and business customers who spend at least $250,000 a year on telecommunication services.'

Full exemption in this customer segment would mean that SingTel would be unshackled from dominant licensee stipulations for most of the services it provides to businesses with a telecom budget below $250,000, he added.

Given these considerations, IDA decided to reject SingTel's first customer-segment request. However, the regulator will grant SingTel regulatory relief for three of the six market segments contained in its second request.

According to Mr Haire, the backhaul and terrestrial international private leased circuits (IPLC) segments 'are now effectively competitive' and SingTel will be freed from its dominant licensee obligations in these markets. In addition, the regulator will continue to exempt SingTel in the international managed data services market.

These exemptions, however, will not be extended to the remaining three Singapore-centric business segments detailed by SingTel.

'IDA has concluded that because effective competition has not yet taken root in the business local telephony service, LLC (local leased circuit) and local managed data service, IDA will not grant exemption in those markets,' Mr Haire said.

The rulings are expected to kick in by June 16. When contacted, SingTel did not confirm whether it will appeal to IDA. 'We are reviewing the decision. However, we welcome IDA's decision to relieve us from dominant licensee obligations in respect to the terrestrial IPLC market and the backhaul market,' a SingTel spokesman said.