Nucleus Connect: "End-user demand for the NGN has been very good"

David Storrie has a crucial role to play in the communications future of a genuine Asian Tiger: as CEO of Nucleus Connect, the operating company of Singapore’s Next Generation Nationwide Broadband Network (Next Gen NBN), he is responsible for lighting up around SGD1bn ($808m) worth of fibre for the city-state’s five million residents.

We spoke to him recently about the thinking behind the three layer model adopted for building and operating the new network, and the challenges he has encountered along the way.

With a global reputation for prudent planning and civic efficiency, Singapore offers some powerful insights into how a government can build a world-class network and create a fair, vibrant and competitive broadband market.

Could you tell us a little more about the process of deploying Singapore’s nationwide all-fibre network?

Singapore’s nationwide all-fibre network, the Next Gen NBN, comprises three distinct industry layers. At layer 1, underpinning the Next Gen NBN, is the Network Company (NetCo), with the responsibility for the design, build and operation of the passive infrastructure layer.

At layer 2, and at the heart of the NGN, is Nucleus Connect, the Operating Company (OpCo). The OpCo is responsible for the design, build and operation of the active infrastructure – essentially lighting up the fibre.

At the crux of Nucleus Connect’s product offerings is a suite of wholesale bandwidth services which we offer on a non-discriminatory basis to all Retail Service Providers (RSPs) in Singapore. These RSPs in turn compete in the end-user market, providing broadband and other innovative services to consumers, enterprises and government agencies.

The three-layer model was conceptualised by the Government in 2006 as part of its Intelligent Nation 2015 (iN2015) master plan, to uplift Singapore’s national infrastructure to world-class levels and underpin Singapore’s economic growth.

The Next Gen NBN offers a minimum 100Mbps service to all homes, businesses and outdoor locations where high speed connectivity is needed, and can be scaled up to 1Gpbs.

The Next Gen NBN is targeted to reach 95 per cent coverage of Singapore by Jun 2012. Nucleus Connect launched commercial services in Aug 2010, offering full fibre services to homes and businesses in Singapore.

Since launch, over 18 RSPs offer a wide range of broadband services and applications to consumers, enterprises and Government agencies.

Why was the decision taken to use a three-layer model of Network Company, Operating Company and Retail Service Providers?

The government’s main aim was to create a fair, vibrant and competitive broadband market, thus choosing to separate the different layers of the Next Gen NBN. This achieved the effect of ensuring open access and transparent, non-discriminatory pricing at the NetCo and OpCo layers for all downstream operators.

Added to this are the structural and operational separation frameworks for the NetCo and OpCo respectively, designed to ensure that no one industry player has the effect of any dominant influence in the market, and that the NetCo and OpCo operate as neutral entities offering transparent, nondiscriminatory pricing and service levels.

What are the unique challenges of operating a three-layer open access environment?

The greatest challenge is in the inter-entity interfaces, both at the systems and process levels.

We are essentially creating processes and systems for service delivery and fulfilment, fault management & resolution and the whole gamut of processes that are typically executed in a vertically integrated operator, except this time it is across three separate commercial entities with disparate OSS/BSS systems. You can imagine the complexity involved in designing the interfaces, implementing and testing them.

To top it off, there is the added complexity of the commercial arrangements between the entities in the three layers for ordering and delivering these services, and the Service Level Agreements (SLAs) and penalty frameworks associated with them.

What we are pleased to note however is that all this complexity is kept to the back end between the different industry players, and is largely transparent to the end user. End-user demand for the NGN has been very good from both consumers and businesses.

They are also mostly pleased with the quality of service they receive, so while we have significant complexity in the back end, customer experience of network performance etc has been very good.

What plans are there to enhance the service offerings of this model?

With the network reaching 95 per cent of the nation by mid-2012, RSPs will be able to aggressively penetrate the entire market with Next Gen NBN-enabled services.

We plan to work closely with our RSPs to implement service and feature enhancements to the active infrastructure to support them as they scale their offerings to meet the growing demand for high speed fibre services.

Our attention is focused on customising our offerings to meet our RSPs service requirements, managing the bandwidth and driving end-user adoption of the Next Gen NBN.

David is speaking at the Broadband IP&TV Asia 2012 event, taking place in Malaysia on 15th-16th May. For more information and to register, please visit http://asia.broadbandworldforum.com