‘Big three’ object to IDA’s newcomer subsidy plan

8 Sep 2015

A proposal by the Infocomm Development Authority (IDA) to introduce a heavily discounted package of frequencies for a would-be fourth mobile operator has been met – unsurprisingly – with strong resistance from Singapore’s incumbent cellcos, Singtel, StarHub and M1. Responding to the watchdog’s call for feedback on its plan, the big three rejected the need for a fourth network operator altogether and warned that the introduction of competition would result in a poorer consumer experience as there would not be enough spectrum to cater for each operator’s bandwidth needs.

As previously reported by CommsUpdate, in July this year the IDA said that with the proposed newcomer expected to deploy a nationwide service by the end of September 2018, it was considering 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 at the time, 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 was broadly 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.

Further, the IDA set out its stall to offer Singtel, StarHub and M1 the option to bid for additional spectrum to meet increasing demand for mobile data, albeit at the higher price. Including the 60MHz set aside for a new player, a total of 225MHz will be up for grabs.

The details of the 4G spectrum auction are expected to be finalised by end-2015, with bidding due to follow soon after, although in its written response Singtel criticised the move which it says will lead to ‘spectrum constraints in meeting the Singapore market’s bandwidth needs’. Its concerns were echoed by StarHub which deemed the proposal ill-conceived as it will mean ‘a poorer customer experience for Singaporeans, and a negative impact on Singapore’s ongoing push for global competitiveness in mobile broadband speeds’. For its part, number three operator M1 urged the watchdog to allow the incumbents to retain their rights to use the 900MHz band ‘to meet IDA’s stringent 3G standards’, which stipulate a minimum threshold of 99% coverage (outdoors) and 85% (indoors).

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