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IDA to slash spectrum price to attract fourth telco into Singapore market

Zafirah Salim | July 8, 2015
IDA has proposed to let the potential fourth telco bid for around 60MHz worth of airwaves at a reserve price of S$40 million, which is 60 percent lower than the normal reserve price of S$100 million.

The Infocomm Development Authority of Singapore (IDA) has proposed to release more spectrum for mobile broadband services as it makes way for a fourth telco operator.

In a media statement, IDA said that it plans to conduct a spectrum allocation exercise in early 2016 to make available a total of 225 MHz of spectrum for mobile services.

It will set aside 60 MHz out of this 225 MHz of spectrum at a lower indicative reserve package price of S$40 million, for a spectrum auction that is opened only to potential new entrants. The rest of the spectrum will be for the current telcos to meet the growing demand for mobile data traffic.

The new entrant who successfully bids for this set-aside spectrum package is required to deploy its own network and achieve nationwide rollout by end September 2018.   

Explaining the intent behind this discounted offer, IDA said that it is in recognition of the fact that a new entrant will face entry barriers in a mature market, given the significant upfront capital investments required to deploy nationwide services for consumers.

IDA believes that the entry of a new mobile player will help to increase competition in the mobile services market. The new entrant is also likely to offer a wider variety of innovative services and more competitive offerings to the benefit of end-users; as well as incentivise incumbents to invest in infrastructure upgrades, it added.

However, given the size of Singapore's mobile market and global market developments, IDA does not see Singapore's mobile market as one that's able to sustain more than four nationwide infrastructure players, with new Mobile Virtual Network Operators (MVNOs) also entering the market.

IDA is currently seeking public and industry feedback for the auction proposal before it finalises the details. Public consultation will end on August 12, 2015.

 

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