SingTel fined record $6m for exchange fire

[SINGAPORE] Singapore's largest telco has been handed down the industry's largest fine.

This is a sum of $6 million for the Bukit Panjang exchange fire of last Oct 9, which caused what the Infocomm Development Authority of Singapore (IDA) has called a very serious outage of "unprecedented" magnitude - and one that was avoidable.

Also on the hook yesterday were the exchange facility's owner, CityNet, as well national fibre broadband network builder OpenNet. They were fined $300,000 and $200,000 respectively for their role in the blaze and its subsequent fallout.

The fines collected will go to Singapore's Digital Inclusion Fund, which gives low-income families financial assistance in accessing the Internet.

SingTel's $6 million financial penalty is four times the $1.5 million one dealt to previous record-holder M1, for its 2G and 3G mobile service outage last year.

The fire, which broke out in one of the exchange's cable chambers when a SingTel employee used an unauthorised blowtorch during maintenance works, hit nearly 270,000 telecom and broadcast subscriptions, with end-users ranging from government agencies to financial institutions and residential users, said the IDA yesterday.

About two-thirds of the burnt fibre cables had belonged to OpenNet, which meant disruptions for customers of StarHub and M1.

Full restoration of disrupted services came on Oct 17, more than a week after the blaze.

While SingTel had implemented its business continuity-management strategy during the fire, the IDA found that the telco lacked "specific contingency plans" for a serious outage of such a scale.

The regulator also found from its investigations "weaknesses" in the operator's network and practices; it noted the "outdated" use of lead sealants which had required heating by the blowtorch in question.

The IDA's findings follow an independent report on the fire which SingTel made public last December; the report had said that the telco had introduced a new kind of sealant that did not require heating more than 20 years ago, but had not fully phased out the older lead ones by the time of the fire.

In its own investigation, the IDA did note, however, that SingTel's network architecture was "generally in line with international standards". In coming up with the $6 million fine, the regulator had taken into consideration mitigating factors such as SingTel's pledge to make improvements and its offer of compensation to its users.

In response, SingTel said that it accepted the IDA's findings and the fine. The operator announced yesterday that it had brought forward its exchanges' full conversion to the new kind of sealants from year-end to July. It also expects the installation of automatic fire suppression systems in its cable chambers to be done by year's end.

CityNet, which owns and manages the Bukit Panjang exchange, was also taken to task by the IDA for not having a proper fire alarm deactivation protocol and physical security in the cable chamber.

"Had CityNet done so, the fire might have been prevented," said the IDA.

CityNet owns seven of the 22 exchanges from which SingTel operates in Singapore.

The IDA said that although OpenNet did not start the fire, it was culpable for the delay in service restoration to its users, who experienced "unnecessarily prolonged" service disruptions.

Last November, OpenNet was sold to SingTel-owned NetLink Trust, whose trustee-manager is CityNet. By the time of the fire, the sale had been proposed, but OpenNet and CityNet were two separate entities. After the blaze, the proposed sale came under additional scrutiny; some quarters were concerned about the proximity of OpenNet's network to SingTel's. As part of the sale, SingTel has until 2018 to sell down its stake in the trust.

Yesterday, CityNet's acting chief executive Jacqueline Ong, in a reference to the acquisition, noted that CityNet was now responsible for rolling out and maintaining the national fibre broadband network. "This will help to streamline end-to-end delivery process and improve efficiency for the operations," she said.

She pledged that CityNet would improve the monitoring of maintenance work and fire safety measures at its exchanges.

Ms Ong also said that OpenNet is leading a collaboration with the other operators to develop a business continuity plan for the network, even as it works on improving its own one.

In the wake of the fire, the IDA is reviewing the resilience within the fixed line, broadband and submarine cable networks in Singapore. This review, to be completed in the second half of the year, will examine potential single points of failure and ways to strengthen the diversity in Singapore's critical infrastructure and services, among other things.