M1 dealt record-breaking $1.5m fine for service disruption

[SINGAPORE] M1, Singapore's smallest telco, has been slapped with the industry's largest fine on record in the country's history - $1.5 million - for the disruption of its 2G and 3G mobile phone services in January.

These 2G and 3G mobile service disruptions lasted about 71 hours and 63 hours respectively in mid- January, affecting some 250,000 M1 customers.

When the Infocomm Development Authority of Singapore (IDA) announced its record-breaking decision yesterday, a spokesman said the regulator was "extremely concerned about the length and scope of M1's telecom service disruption, especially when it affected services heavily relied upon by both consumers and businesses".

According to IDA, the service disruption was caused by M1's "failure to ensure good electrical installation practices" during its upgrading works, which then set off a chain of events - sparks, smoke, the activation of a gas suppression system and, ultimately, the activation of a water sprinkler that caused one of M1's mobile network switches to fail.

IDA's mammoth fine is more than treble the previous record held by SingTel: a $400,000 fine for a 3G mobile service outage that lasted more than 20 hours in September 2011.

SingTel had in turn broken another record of M1's: a $300,000 fine that the orange-hued telco had to fork out for an outage in May 2011.

On a national level, M1's latest fine likely occupies a podium position regardless of industry. One of the largest fines in recent memory is the $2 million one dealt to train operator SMRT last July, but that figure was split evenly between breakdowns on the North-South Line on two separate dates in December 2011.

M1's financial penalty this time around was levied under the Service Resiliency Code, which carries a fine of up to $1 million or 10 per cent of a licensee's annual turnover, whichever is higher.

At $1.5 million, this fine represents 0.14 per cent of M1's last full year of operating revenue, which stands at $1.08 billion.

Responding to IDA's decision yesterday, an M1 spokesman said: "IDA did not agree with our reconsideration request to reduce the quantum of the fine in light of our strong mitigating factors including our view that the incident was unexpected and beyond our reasonable control."

"We are accordingly evaluating the decision," he added. At this stage, M1 has the option of appealing to Minister for Communications and Information Yaacob Ibrahim.

For the industry, more compliance hurdles might loom. Following a review of the network resiliency for all three operators - SingTel Mobile, M1 and StarHub Mobile - IDA noted yesterday that while they generally met international standards, there was "room for improvement". It will implement a new audit framework to review network resiliency regularly, IDA added.