24 November 2011 - The Infocomm Development Authority of Singapore (IDA) has revised the annual licence fees payable by its licensed Facilities-based Operators1 (FBOs) and Services-Based Operators2 (Individual) (SBOs). The revision will result in a significant reduction of FBO and SBO licence fees for a large majority of licensees, including small to medium sized licensees.
Singapore, 24 November 2011 | For Immediate Release
Move Will Encourage New Entrants to Infocomm Industry As Most FBOs and SBOs
Could See Savings of Between 20% and 75% in Annual Licence Fees
The Infocomm Development Authority of Singapore (IDA) has revised the annual licence fees payable by its licensed Facilities-based Operators1 (FBOs) and Services-Based Operators2 (Individual) (SBOs). The revision will result in a significant reduction of FBO and SBO licence fees for a large majority of licensees, including small to medium sized licensees. The new fee structure is a result of IDA's review of its licensing framework, taking into consideration feedback from operators, the need to enhance the competitiveness of the licence fees, and the changing industry landscape, especially with the deployment of the Next Generation Nationwide Broadband Network (Next Gen NBN).
Under the new fee structure, which will take effect at the start of a licensee's financial year in the year 2013, all FBOs will benefit from a reduction of between 20 per cent and 75 per cent in annual licence fees from 2013, while most SBOs will see a drop of 20 per cent in licence fees.
Since the last licence fee revision in 2001, FBOs have been paying, as annual licence fees, one per cent of their annual gross turnover (AGTO), subject to a minimum of $100,000, while SBOs, which lease FBOs' network to provide telecom services, have paid a flat fee of $5,000 annually. Under the revised licence fee framework, FBOs will pay a reduced flat fee of $80,000 for the first $50 million of their AGTO, followed by 0.8 per cent of the incremental AGTO between $50 million and $100 million, and one per cent of the incremental AGTO above $100 million. SBOs will be subject to a similar tiered fee structure, i.e. pay a reduced flat fee of $4,000 for the first $50 million of their AGTO, followed by 0.5 per cent of the incremental AGTO between $50 million and $100 million, and 0.8 per cent of the incremental AGTO above $100 million (or 0.25 per cent and 0.4 per cent respectively for the first year of transition for the SBOs). Over the next five years, the total amount of licence fee revenue collected by IDA from FBOs and SBOs could fall by $15 million to $20 million.
Mr Leong Keng Thai, Deputy Chief Executive and Director-General (Telecoms & Post) of IDA said, "IDA regularly updates its frameworks and regulations to keep pace with the changing landscape to ensure that they remain relevant to the industry. This new fee structure seeks to provide a more balanced approach towards facilitating both facilities- and services-based competition in Singapore. It is a step towards encouraging facilities-based competition while anticipating increasing SBO competition especially with the deployment of the Next Gen NBN. It also seeks to further encourage market entry by substantially reducing licence fees for new entrants and smaller players".
ISSUED BY THE INFOCOMM DEVELOPMENT AUTHORITY OF SINGAPORE
Notes to Editor:
1 FBOs are operators which deploy any form of telecommunication network, systems and facilities to offer telecommunication switching and/or telecommunication services to other licensed telecommunication operators, business, and/or consumers.
2 SBOs are operators which lease telecommunication network elements such as transmission capacity, switching services, ducts and fibre from any FBO licensed by IDA to provide telecommunication services to third parties or resell the telecommunication services of FBO. The SBO licences fall under two categories: the SBO (Individual) Licence category, where individual licensing is required for the stipulated types of operations and services; and the SBO (Class) Licence category, where interested parties will only be required to register with IDA before providing the stipulated types of services.
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 more news and information, visit www.ida.gov.sg.
For media clarification, please contact:Sheo S. Rai (Mr)
Assistant Director, Corporate and Marketing Communication