A KEY feature of the tenders being called to build and eventually run the new super-fast broadband network is to ensure a level playing field for companies interested in providing Internet services here.

The goal, ultimately, is to keep broadband subscription prices low for consumers.

This was revealed yesterday by Minister for Information, Communications and the Arts, Dr Lee Boon Yang, when he called for bids to build Singapore's next generation broadband network.

Twelve consortia are in the running.

'It is critical for the Next Generation National Broadband Network to provide effective open access to service providers,' said Dr Lee. 'This will create a more vibrant and competitive broadband market.'

To prevent one telco operator from dominating the market, whoever gets to build the broadband network will not be operating it or providing retail services such as broadband subscription, Internet TV and Net telephony services as well.

Currently, SingTel owns the broadband pipes, operates it and also provides broadband service to consumers and companies.

The new condition, called 'structural separation', is among the criteria set for the bidders.

With the new rule in place, incumbents SingTel and StarHub will have to set up separate companies in order to bid for the project to build the pipes.

At another level, the company that operates the network - running the computers and equipment that pushes traffic through the pipes - will also have to be 'operationally separate' from the service providers.

This means setting up another business, with separate offices and board of directors.

To help keep prices for consumers affordable, the Government has also made pricing strategy a key consideration in awarding the project to bidders.

Traditionally, the owner of a broadband network makes money from selling bandwidth to service providers.

In order to keep this 'wholesale price' low, the Government has said that companies will have a better chance of winning the bid if they offer bandwidth at lower prices.

'How much consumers will have to pay hinges a lot on the wholesale price,' said Mr Foong King Yew, research director for analyst firm Gartner. 'If the wholesale price is high, retail price will also be high, because service providers need to make money.'

Yesterday's tender call was for companies to build the network. The Government will call for bids for companies interested in running the network in the second quarter of next year.