IDA to discount radio spectrum by 60% to tempt fourth player; MyRepublic said to be ‘very excited’

8 Jul 2015

The Infocomm Development Authority (IDA) of Singapore says it is considering offering a substantial discount on radio spectrum to entice a would-be fourth operator to enter the market. With the newcomer expected to deploy a nationwide service by the end of September 2018, the regulator is proposing slashing the SGD100 million (USD73.9 million) reserve price on the 60MHz of airwaves on offer to SGD40 million, mindful 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’. Announcing its proposal, the IDA statement read: ‘The entry of a new mobile player will increase competition in the mobile services market. A new entrant is likely to bring about a wider variety of innovative services and more competitive offerings to the benefit of end users.’

The move has been welcomed by interested parties, with one, local broadband provider MyRepublic, said to be ‘very excited’ at the IDA’s financial incentive. ‘The spectrum allocated to the fourth mobile operator will ensure that it will be able to deliver fast mobile internet with excellent coverage … We are also very glad that the indicative reserve package price is lower for the new entrant,’ it said in a statement. Meanwhile, wireless systems specialist Consistel also gave the thumbs up to the plan, which offers lower-band frequencies of 700MHz and 900MHz to the new entrants, calling it a ‘major change’ in thinking that would enable a newcomer to provide nationwide coverage.

The watchdog notes too that the three incumbents – Singtel, StarHub and M1 – will also be able to bid for additional spectrum to meet increasing demand for mobile data, but at the higher price. Including the 60MHz set aside for a new player, a total of 225MHz is up for grabs. The IDA’s discount proposal is part of the second public consultation on auctioning new airwaves (launched yesterday), which is scheduled to end on 12 August. Under the plan, the 700MHz band is due to be freed up in 2018 as part of Singapore’s migration from analogue to digital television services, while operators’ existing rights to the 900MHz band are due to expire in April 2017. As it stands, the details of the 4G spectrum auction are expected to be finalised by end-2015, with bidding due to follow soon after.

However, MyRepublic, Consistel and maybe others will likely have to fight for the right to become the fourth operator as the IDA has said that, given the size of Singapore’s mobile market and global market developments, ‘it does not at this juncture see Singapore’s mobile market being able to sustain more than four nationwide infrastructure players, with new mobile virtual network operators (MVNOs)’.

Singapore, M1, MyRepublic (Singapore), Singtel Group, StarHub