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IDA brushes aside protests, opts for 4th telco

SINGAPORE — Pushing ahead with plans to draw a fourth telco into the market despite objections by the incumbents, the Infocomm Development Authority of Singapore (IDA) on Thursday (Feb 18) announced a lower starting bid price for aspiring new entrants for 60MHz of spectrum up for auction.

People talking on cell phones while walking. Bloomberg file photo

People talking on cell phones while walking. Bloomberg file photo

SINGAPORE — Pushing ahead with plans to draw a fourth telco into the market despite objections by the incumbents, the Infocomm Development Authority of Singapore (IDA) on Thursday (Feb 18) announced a lower starting bid price for aspiring new entrants for 60MHz of spectrum up for auction. 

Bids for these players will start from S$35 million — down from S$40 million previously for a different frequency mix — for 60MHz of spectrum from the 900MHz and 2.3GHz bands, the regulator said. This is about half of what an incumbent might pay, and the discount is given to new entrants because of the high cost of entering the market.

The spectrum rights will start in April 2017, which is the earliest that any new entrant may begin services. 

The auction will take place in two stages later this year. The spectrum auction for new entrants will be held first, likely in the third quarter of the year. Pre-qualified parties that have provided information, such as evidence of technical capabilities and financial position, will be able to participate. 

The second stage, called the general spectrum auction, will be open to the three incumbent telcos, M1, Singtel and StarHub, as well as any new entrant that emerges after the first stage. It is expected to take place in either the third or fourth quarter of this year. A total of 235 MHz of spectrum will be made available for mobile services, in this year’s exercise, said the IDA.

The three telcos, which had objected last year to a discounted starting bid price for new entrants that was 60 per cent lower than the normal reserve price, reacted cautiously on Thursday evening to the IDA’s latest announcement. 

Singtel’s Mr Yuen Kuan Moon, chief executive, Consumer Singapore, reiterated the company’s call for a level playing field to ensure sustainable competition, while acknowledging some of its feedback had been taken on board by the IDA. “We note the finalisation of the framework for spectrum allocation and competition in the mobile market and the certainty it brings to the industry for the moment,” he added.

Earlier this month, Singtel chief executive Chua Sock Koong had expressed concern that the entry of a new operator would drive the focus of the competition to just price and hurt the industry. 

StarHub said operators need more spectrum, especially in the low bands, to cater for continued growth in mobile data traffic and the Internet of Everything. 

“We support IDA’s decision on the allocation of the 900MHz spectrum to existing operators, and we look forward to acquiring the new 700 MHz spectrum as soon as possible to provide our customers with faster data services and robust mobile coverage,” said a spokesman. 

The telcos had cried foul last year over the IDA’s proposal to reserve the lower-band frequencies including 900MHz, which allows quick nationwide rollout of network with less mobile equipment, for the new entrant, saying it would affect their services. But the IDA said on Thursday that the spectrum for existing 3G and 4G services would not be affected, as the 900MHz spectrum that can be made available to the new entrant is from freed-up 2G spectrum, which will cease by April next year when the term of allocation expires.

Each of the three incumbent telcos will be offered at least 10MHz of spectrum in the 900MHz band to ensure coverage, added the IDA. This was welcomed by M1, which added that it was evaluating the IDA’s decision in detail and would be seeking clarification.

Meanwhile, aspiring entrant MyRepublic said it looked forward to participating in the auction for new entrants, in the bid to be Singapore’s fourth telco. The company is working with investors to raise S$250 million and is in talks with partners to roll out a next-generation pre-5G network, said MyRepublic chief executive Malcolm Rodrigues. These preparations for the bid should be finished by April this year.

Mr Rodrigues said the IDA’s package remains “extremely attractive” but the company is slightly disappointed by the lack of 700MHz in the auction. The IDA said the 700MHz band was excluded because of uncertainty in its start date, as the band can be made available after analogue switch-off currently planned for end-2017.

Consistel has also expressed interest in entering the market here. In a response issued on Friday, Consistel’s OMG spokesman said it remains committed to bidding for spectrum and welcomed the regulator’s announcement as a “clear demonstration that the IDA is serious about introducing competition into the telco market”.

The package offered by IDA for bidding by new entrants includes the tools needed to deliver the faster data speeds that consumers are seeking, he said. “The positive developments from the IDA … have the potential to unlock new services and better experiences for consumers in Singapore. We believe in delivering value which is predicated on quality and not just price.”

IDA managing director Jacqueline Poh said the spectrum auction was designed with consumers’ interests in mind. The spectrum made available will allow all mobile operators to roll out or enhance their high-speed networks as early as next year, she said. “Having more players in the market will give consumers a greater choice in selecting an offering that best suits their needs.” ADDITIONAL REPORTING BY KENNETH CHENG

UPDATE: This story was updated on Friday (Feb 19), 4pm, to include a statement from Consistel.

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