SingTel

SingTel: plans to inject $1.89b worth of infrastructure assets into NetLink Trust, a business trust it solely owns.
The assets include exchange buildings, ducts and manholes used by OpenNet (30% owned by SingTel), the operating co in charge of laying optical fibre cables for Spore's Next Generation Nationwide Broadband Network (NGNBN).

The trustee-mgr for NetLink Trust is CityNet Infrastructure Mgt, a subsidiary of CitySpring Infrastructure Trust. The sale is part of the Govt's requirement for the telco to divest NGNBN-related assets to an independent firm by mid-2011 and sell its stake by 2014. Therefore, SingTel will own 100% of NetLink Trust until Apr 2014, when its interest will be diluted to <25%, likely by way of a public listing of NetLink Trust.

NetLink Trust's revenue will come directly from SingTel and indirectly OpenNet. Its income will mainly be fees and charges from the use and access to the ducts, manholes and exchange buildings by SingTel and OpenNet, as their copper and fibre cables are routed through these assets.
Under the relevant revenue model, OpenNet will pay fixed and variable fees to SingTel for usage, access rights and maintenance of its fibre cables that are situated within the NetLink ducts, part of which will be passed on by SingTel to NetLink Trust. In addition, SingTel will pay fees to NetLink as well for the same rights for its own copper and fibre cables as well as the lease of space within the exchange buildings.

The announcement should not come as a surprise to the market given that it is part of an agreement with the IDA made more than 2 years ago.