20 November 2013 - The Infocomm Development Authority of Singapore (IDA) has imposed a total financial penalty of S$750,000 on OpenNet for breaching its Universal Service Obligation from January to June 2013 as well as for breaching its Quality of Service standards.
Singapore, 20 November 2013 | For Immediate Release
IDA imposes a total financial penalty of S$750,000
The Infocomm Development Authority of Singapore (IDA) has imposed a total financial penalty of S$750,000 on OpenNet for breaching its Universal Service Obligation from January to June 2013 as well as for breaching its Quality of Service standards.
Universal Service Obligation
The Universal Service Obligation (USO) is a licence condition imposed on Public Telecommunication Licensees. The obligation requires these telecom licensees to provide specific telecom services to any end user who requests for them. OpenNet's USO, which came into effect on 1 January 2013, requires OpenNet to provide optical fibre services to any location in mainland Singapore or connected Singapore islands at the request of telecom or broadcast licensees. The USO is a fundamental licence obligation; non-compliance would affect downstream providers such as the Operating Companies (OpCos) and Retail Service Providers (RSPs) who rely on OpenNet's Nationwide Broadband Network (NBN) to deliver a plethora of services to consumers and businesses.
IDA has determined that OpenNet was not able to provide services to certain physical addresses upon the request of its customers between 1 January 2013 and 30 June 2013. Approximately 120,000 residential premises and about 760 non-residential buildings were potentially affected by OpenNet's failure to comply with its USO during this period, as they could not have ordered high-speed fibre broadband if they had wanted to.
IDA has decided to impose a financial penalty of S$550,000 on OpenNet for its failure to comply with its USO. In deciding on the quantum, IDA took into consideration factors such as the fact that OpenNet's failure to meet its USO for six months was a serious breach, which adversely impacted the industry that relies on OpenNet's NBN to deliver its services; as well as OpenNet's progressive rollout to make services available to the affected buildings according to its proposed corrective schedule.
Since 1 July 2013, OpenNet has been accepting orders for fibre services to all homes and business end-users in observation of its USO.
Quality of Service (QoS) Standard
IDA also found that OpenNet had failed to meet the residential QoS standards for timely service provisioning in Q1 and Q2 2013.
The main cause of failure was a shortage of service activation capacity from OpenNet to meet the strong demand for residential end-user connection services in the first half of 2013, in particular in Q2 2013.
Chart 1: Percentage of Service Orders Met within 3 or 7 Business Days in Q2 2013
IDA waived the financial penalty for Q1 2013 as it was the first quarter of the QoS commencement and OpenNet needed more time to adjust its systems to comply with the QoS standards for service provisioning. IDA has decided to impose a financial penalty of S$200,000 on OpenNet for its failure to comply with its QoS in Q2 2013. In arriving at the quantum of the financial penalty, IDA took into consideration aggravating factors such as the very large margin by which OpenNet had failed the QoS standards and the need for IDA to take strong deterrent action against OpenNet for the poor QoS performance. IDA also considered factors such as the stronger than expected demand spike in May and June 2013 due to promotional activities by RSPs in May 2013, and during the June 2013 IT fair 1.
OpenNet has been given until 31 December 2013 to rectify its QoS performance for residential end-user connection services. As part of its rectification measures, OpenNet will further increase its installation capacity per business day, particularly during large scale promotional events where many orders are taken. OpenNet will also conduct a mass exercise to rollout fibre termination points to reach out to more homes ahead of demand. IDA will next assess OpenNet's QoS performance in Q1 2014.
IDA is currently assessing OpenNet's QoS performance for its non-residential end-user connection services. IDA will also review the QoS framework and other regulatory frameworks governing end-user connection services to fine-tune them to better ensure that OpenNet undertakes all reasonable measures to expedite provisioning of services to consumers and business users.
Mr Leong Keng Thai, IDA's Deputy Chief Executive and Director-General (Telecoms and Post), said, "IDA expects telecom licensees to closely abide by their obligations; these form the minimum standards that licensees have to provide to their users. OpenNet's failure to meet both the USO and the QoS standards shows its inability to fulfil the promises it made to its customers. OpenNet must re-examine the management of its resources and its operations to more effectively meet IDA's regulatory requirement and more importantly, end-users' service expectations."
ISSUED BY CORPORATE AND MARKETING COMMUNICATIONS DIVISION
INFOCOMM DEVELOPMENT AUTHORITY OF SINGAPORE
- Annex A - Universal Service Obligation (USO) Fact Sheet (397.17KB)
- Annex B - QoS Framework for OpenNet's Provisioning of Residential End-User Connection Services Fact Sheet (539.02KB)
About Infocomm Development Authority of Singapore
The mission of the Infocomm Development Authority of Singapore (IDA) is to develop information technology and telecommunications within Singapore with a view to serve citizens of all ages and companies of all sizes. IDA does this by actively supporting the growth of innovative technology companies and start-ups in Singapore, working with leading global IT companies as well as developing excellent information technology and telecommunications infrastructure, policies and capabilities for Singapore. For more news and information, visit www.ida.gov.sg.
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Note to Editor
1 The PC Show was held from 6 to 9 June 2013.