IDA Licensing Framework and Guidelines Following Announcement of Full Liberalisation of the Telecommunication Market

IDA has released the licensing framework and licence application guidelines for the provision of telecommunication networks and services in Singapore. This follows the government's announcement on 21 January 2000 to bring forward full market competition in the telecommunication market sector two years to 1 April 2001.

Singapore, 1 February 2000 | For Immediate Release

IDA has released the licensing framework and licence application guidelines for the provision of telecommunication networks and services in Singapore. This follows the government's announcement on 21 January 2000 to bring forward full market competition in the telecommunication market sector two years to 1 April 2001¹.

Licensing Framework

The new licensing framework is streamlined for the fully competitive telecommunication environment to ensure minimal market entry barriers and to facilitate the entry of new operators and the expansion of service scope by existing licensees. All persons operating and providing telecommunication systems and services will be licensed. The licensing framework will be based on the following two broad categories:-

(a) Facilities-Based Operators (FBOs)

Operators who deploy any form of telecommunication networks, systems and facilities to offer telecommunication switching and/or transmission capacity and/or services to existing licensed telecommunication operators; businesses; and/or consumers must apply for a Facilities-Based Operator (FBO) licence.

(b) Services-Based Operators (SBOs)

Operators who lease telecommunication network elements (such as transmission capacity, switching services, ducts, fibre) from FBO licensees to provide telecommunication services to third parties or resell the telecommunication services of FBOs parties must apply for a Services-Based Operator (SBO) licence.

To rationalise the licensing procedure, operators who intend to provide services falling under more than one licence category or intend to expand their original scope of operations need not apply for additional licences. A single licence will be issued regardless of the type and range of operations and services to be provided. Subsequent changes to the scope of the operations and services must be submitted to IDA for evaluation, approval and update, where appropriate.

Facilities-Based Operators (FBOs)
IDA will adopt a technology neutral approach in licensing FBOs to encourage licensees to continually innovate and respond competitively to meet users' needs. The licensee can select the configuration of the system deployed and the technology platform adopted.

All FBOs will be individually licensed. In addition, depending on the scope and requirements of their operations, services offered and reach of customers, FBOs may apply to be designated as Public Telecommunication Licensees (PTLs) under Section 6 of the Telecommunications Act 1999. PTLs will enjoy provisions under the Act that facilitates their network installation, maintenance and protection of their networks. IDA reserves the right to impose certain basic service obligations on FBOs, in particular those designated as PTLs, when deemed necessary.

Telecommunication services or networks which would require FBO licensing include any terrestrial telecommunication infrastructure for the carriage of telecommunication or broadcast traffic (e.g. submarine cable, satellite international gateway, and domestic telecommunication networks). Other services requiring FBO licensing include public mobile telephone, paging, mobile data and trunked radio services. It also includes operators seeking to provide mobile broadband multimedia services (e.g. 3rd Generation systems and services) and fixed wireless broadband services (e.g. Local Multi-point Distribution Systems).

Parties interested in deploying networks based on wireless technology will be licensed separately via a comparative selective exercise in view of spectrum constraints. IDA will issue consultation papers seeking the views and comments of the industry and members of the public on spectrum and service provisioning issues before publishing the appropriate licensing frameworks for the various wireless-based services. IDA plans to issue a consultation paper on the "Deployment of Fixed Wireless Broadband Networks and Service Provisioning" by 1st quarter 2000 to invite comments on the appropriate licensing and spectrum allocation framework.

FBOs will be required to provide IDA with a performance bond to secure the commitments of the licensee as stated in the licence application and any additional terms deemed necessary by IDA. Similar to existing licensees, new operators will also be required to comply with interconnection and access obligations as well as minimum quality of service (QOS) standards² set by IDA.

FBO licences will be generally issued based on the merits of the application. IDA will evaluate these licence applications based on, but not limited to, the applicant's ability to deliver its proposed service, infrastructure commitments and commitment to quality of service standards (QOS)². In addition, FBO licence applications will also be evaluated on the applicant's commitment in developing as well as investing in Singapore's info-communications infrastructure.

The number of FBO licences to be awarded will therefore depend on the quality and attractiveness of the applications received. IDA adopts a free market entry and exit approach and will not restrict the total number of licences that may be awarded, except where there is spectrum and other physical constraints that may limit the maximum number of licences which may be awarded.

Services-Based Operators (SBOs)
SBOs will be licensed under two categories - either the SBO (Individual) Licence or SBO (Class) Licence. Generally, operators who lease international transmission capacity for the provision of services will be licensed individually. This includes services such as international simple resale, resale of leased circuits, public Internet access and virtual private networks. Operators who provide other services over the public switched telephone network will be class-licensed and should first register with IDA. Operations and services that fall under the class licence category include callback, Internet-based voice and data, and international calling cards. There will be no restrictions on the number of SBOs to be licensed for both the individual and class licensed categories.

To safeguard the interests of consumers, SBOs intending to collect monetary deposits and/or use prepaid cards for collection of payments from their customers will be required to submit a S$100,000 banker's guarantee to IDA.

Licence Fees and Duration

Contributing to Singapore's appeal as an infocommunications hub, there will be a revised licence fee structure under the new licensing framework. The most significant change is the removal of the initial one-time licence fee requirement, which ranged between $50,000 for a resale of leased circuit licence to $10 million for a public basic telecommunications services licence in the past. Generally, the new licence fees will be calculated based on a certain percentage of the operators' Annual Gross Turnover (AGTO).

The table detailing the various licence fees and licence duration is found in Annex A. Details of the licensing framework are available under the "Policy and Regulation" section of the IDA Web site at www.imda.gov.sg. Interested parties are requested to read the relevant application guidelines and submit their proposals and/or forms where applicable.

Notes to Editor:

¹ The announcement was made on 21 January 2000 by Mr Yeo Cheow Tong, Minister for Communications and Information Technology. This is the first major initiative of the Information and Communications Technology 21 Masterplan, or ICT21, which aims to develop Singapore as the Asia Pacific's leading infocommunications hub. The press release and full text of Mr Yeo's speech is available in the "Newsroom" section of the IDA Web site at www.imda.gov.sg.

² Please refer to the IDA website for IDA's quality of service (QOS) standards.

Licence Fees & Duration