IDA approves OpenNet sale to CityNet, but with conditions

SINGAPORE — The proposed sale of OpenNet to CityNet, a SingTel owned business trust, has been approved by the Infocomm Development Authority (IDA) today, but with several conditions and safeguards imposed on OpenNet, CityNet and SingTel, the applicants of the consolidation.

In a bid to stave off concerns about anti-competition and conflict of interest, SingTel must sell off 75 per cent of its stake in CityNet, which it wholly owns currently, by April 2018, under conditions the applicants of the consolidation have proposed.

All of its relevant personnel, skills, expertise and assets such as fibre will have to be transferred and integrated into CityNet, which will acquire 100 per cent of the issued and paid up capital in OpenNet. This means that SingTel will cease to be the key subcontractor of OpenNet.

SingTel also cannot appoint more than 25 per cent of directors on the board.

After this consolidation, IDA will also set up an entire host of safeguards, among these an independent monitoring board to check on whether there has been compliance with control and ownership restrictions.

Six local retail service providers — including StarHub and M1 — had previously opposed this sale, raising questions of independence, as SingTel would both own OpenNet as well as be a provider of services.