IDA to auction unused 3G spectrum

22 Jul 2010

Singapore’s telecoms regulator, the Infocomm Development Authority of Singapore (IDA), will conduct an auction for the city-state’s unused 3G spectrum following a government decision to sell off the frequencies. The state hopes the move will result in a newcomer entering the market by the end of the year, but incumbent cellcos SingTel Mobile, MobileOne Asia (M1) and StarHub have greeted the decision coolly.

In March 2010 the IDA launched a public consultation on its plans to sell off three lots of spectrum left unallocated after the country’s 3G auction in 2001. At that time, the government received just three winning bids for the licences at a cost of around SGD100 million (USD72.8 million) each, instead of the planned four. The three incumbents cite the lack of demand in 2001 as one key reason for not holding a fresh tender, arguing instead that given the investments they have each made, the IDA should allocate them the remaining frequencies so they can cater for anticipated growth in demand in the future. They also caution that end users may be forced to bear the brunt of higher prices if spectrum fees are driven up through an auction. The IDA brushed off these concerns though, noting: ‘The operators are likely to charge end-users a price they think the market can bear, independent of the cost of the 3G spectrum lots.’ Further, it added that the incumbents each hold a ‘substantial amount of spectrum’ so there is no need to extend their allocation at this time. Defending its proposal to hold a public tender for the unallocated frequencies the watchdog said: ‘IDA’s policy objective is to ensure efficient and optimal use of our scarce spectrum resource. In making available the remaining spectrum … IDA seeks to ensure the spectrum is allocated in a way which makes the most efficient use of this scarce resource to promote innovation in, and growth of a vibrant infocomm industry in Singapore.’

The IDA intends to finalise the bidding rules for the auction by the end of July, after which interested parties will be invited to submit applications. The auction proper will be held between September and October if necessary, and the successful licensee will be announced by November. The IDA plans to set a reserve of SGD20 million for each lot of 3G spectrum, excluding one-time application and a processing fee of SGD5,300 per spectrum lot. The winning bidder will not need to pay annual licence fees to provide 3G services, it said.