IDA Proposes to Exempt SingTels International Capacity Services (ICS) from Dominant Licensee Obligations

The Infocomm Development Authority of Singapore (IDA) is proposing to exempt SingTel from Dominant Licensee obligations1 for the provision of a suite of international capacity services (ICS)2. These include services such as ...

Singapore, 25 November 2004 | For Immediate Release

Obligations for Backhaul and International Private Leased Circuits Services to Remain

The Infocomm Development Authority of Singapore (IDA) is proposing to exempt SingTel from Dominant Licensee obligations¹ for the provision of a suite of international capacity services (ICS)². These include services such as Frame Relay, ATM, IP-VPN, IP Transit, Leased Satellite Bandwidth, VSAT, DVB-IP, Satellite Uplink/Downlink, and Satellite International Private Leased Circuit (IPLC). SingTel will no longer be required to file tariffs, and will have more flexibility in packaging and bundling different services. However, IDA will retain Dominant Licensee obligations on SingTel in the Backhaul and Terrestrial IPLC markets³.

IDA arrived at this preliminary decision after a careful review of the state of competition in the ICS markets in Singapore. IDA also considered industry feedback, obtained via a public consultation exercise and interviews with the industry.

IDA's review sought to determine whether competition in the ICS markets had developed to an extent where existing regulatory requirements imposed on SingTel were no longer necessary to prevent anti-competitive behaviour, which can be effectively checked by competitive market forces. Factors considered include the presence of competitors in the relevant markets; the Dominant Licensee's market share; the level of market concentration (market share versus number of players); the ability of competitors to replicate facilities or gain market entry; and the ability of the Dominant Licensee to restrict output and raise prices.

For the services that IDA is proposing to grant exemption to SingTel, IDA notes that these markets are fully competitive. As such, it is no longer necessary to impose Dominant Licensee obligations on SingTel to preserve fair and effective competition among the operators in these markets.

However, IDA is proposing that SingTel continues to be required to observe Dominant Licensee obligations in the Backhaul and Terrestrial IPLC service markets. Based on IDA's assessment, SingTel still has significant market power in these markets. While competition is developing in these markets, SingTel still controls the essential infrastructure and inputs such as submarine cable landing stations for these services.

IDA recognises that recent regulatory measures to enhance competition in the local leased circuits market, and allowing greater access to submarine cable landing stations, will have a positive impact on the downstream markets such as the Backhaul and Terrestrial IPLC markets. IDA is prepared to review the level of competition in these two markets in two years' time to determine if exemption can be granted then.

IDA's decision is in line with its principle of proportionate regulation. In markets where there is effective competition, IDA will scale back its measures to prevent anti-competitive behaviour. In markets that are not effectively competitive, IDA will continue to monitor developments and maintain regulatory oversight.

Owing to the wide-ranging services involved in SingTel's request for exemption from Dominant Licensee obligations for ICS and the impact on the industry, IDA is soliciting further industry feedback on its preliminary decision before issuing the final decision. All views and comments should be submitted in writing to IDA not later than 12 noon (Singapore time), 23 December 2004. The public consultation paper and details of IDA's prelim decision can be downloaded from https://www.imda.gov.sg/,  under the sections "Policy & Regulation", "Consultation Papers". IDA targets to issue its final decision by 1st Quarter 2005.

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ISSUED BY CORPORATE & MARKETING COMMUNICATION DIVISION
INFOCOMM DEVELOPMENT AUTHORITY OF SINGAPORE

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Notes to Editor:

¹Under Section 2.6 of the Code of Practice for Competition in the Provision of Telecommunications Services (the 'Code'), a Dominant Licensee may submit a request to IDA to exempt itself from specific Dominant Licensee provisions and requirements. The Dominant Licensee must demonstrate that its adherence to such provisions is not necessary to protect end users or promote and preserve effective competition amongst Licensees. The Dominant Licensee must provide verifiable data to support its request. The Code can be found at https://www.imda.gov.sg/, under the sections "Policy & Regulation", "Codes of Practice".

According to the Code, a Licensee will be classified as dominant if it controls facilities that provide a direct connection to end users within Singapore, regardless of the technology used, and: (a) the facilities are sufficiently costly or difficult to replicate, such that it would create a significant market entry barrier to competitors; or (b) the Licensee has the ability to restrict output or to raise prices above competitive levels, over such facilities, for telecom services provided by end-users.

²International Capacity Services (ICS) is a term used by SingTel in its filing with IDA to refer to a suite of international bandwidth services.

³Please refer to the appended Annex for a summary on IDA's preliminary decision on SingTel's request for exemption from Dominant Licensee obligations for ICS.

Supplementary Information:

Please refer to IDA's Media Portal at https://www.imda.gov.sg/ for a brief overview of International Capacity Services (ICS) and a glossary of ICS terms.

About Infocomm Development Authority of Singapore

The Infocomm Development Authority of Singapore (IDA) is committed to growing Singapore into a dynamic global infocomm hub. IDA uses an integrated approach to developing infocommunications in Singapore. This involves nurturing a competitive telecoms market as well as a conducive business environment with programmes and schemes for both local and international companies.

For media clarification, please contact:

Dulcie Chan 
Assistant Director, Corporate & Marketing Communication
Infocomm Development Authority of Singapore
Tel: (65) 6211 1999
Fax: (65) 6211 2227
Email: dulcie_chan@imda.gov.sg

Annex

Summary of IDA's Preliminary Decision on SingTel's Request for Exemption
Market	Exemption Granted?	Conditions
Managed Data Services - Frame Relay, ATM, IP-VPN	Yes	N.A.
IP Transit	Yes	N.A.
Leased Satellite Bandwidth	Yes	N.A.
VSAT	Yes	N.A.
DVB-IP	Yes	N.A.
Satellite Uplink	Yes	N.A.
Satellite Downlink	Yes	N.A.
Satellite IPLC	Yes	N.A.
Terrestrial IPLC	No	IDA is prepared to review market conditions again in two years to determine if exemption can be granted. This is in view of recent regulatory measures introduced by IDA to enhance competition in submarine cable landing station access and local leased circuits, which will have a positive impact on these two markets.
Backhaul	No	Same as Terrestrial IPLC