Regulator IDA Singapore has given the nod for a SingTel-owned company to acquire NG-NBN netco OpenNet for S$126 million ($100.8 million) – but only if it agrees to strict conditions.
CityNet has made an offer to acquire all the shares in OpenNet as part of a consolidation proposal. CityNet is the trustee manager for NetTrust, an independently operated 100% SingTel subsidiary.
A number of Singaporean operators and ISPs have voiced opposition to the proposed consolidation as it would give SingTel an effective 100% stake in CityNet, and by extension the passive infrastructure layer of the NG-NBN national fiber network.
But in a statement, IDA Singapore said it would approve the acquisition as long as NetTrust/CityNet agree to some additional safeguards.
These include making the activities of NG-NBN subject to the oversight of an monitoring board focusing on whether the consolidated company is meeting the requirement of ensuring no effective control by SingTel.
Approval is also contingent on a requirement for CityNet to have full independence in decisions on prices and terms for new and existing offerings, and an agreement to seek IDA's approval before appointing a new contractor.
As part of the proposed deal, SingTel has agreed to relinquish its role as the key sub-contractor of OpenNet and transfer relevant personnel into the NetLink Trust, and to divest more than 75% of its stake in NetLink by April 2018.
“IDA would also stress that April 2018 is not the target date for divestment but is the deadline by which the divestment must be completed,” IDA deputy CEO Leong Keng Thai said.