Singapore sets stage for new telecoms player with Q3 airwaves auction

SINGAPORE - Singapore set the reserve price on Thursday for an airwaves sale due to be held later this year that could see the entry of a fourth telecommunications operator in the city state as the government seeks to increase competition.

The Infocomm Development Authority said it plans to sell 235 megahertz (MHz) of spectrum at the auction, due to take place in the third quarter, and will set aside 60 megahertz (MHz) of airwaves for the new player at a starting price of S$35 million. That represents a potential 45 percent discount over the full reserve price.

Potential newcomers will get to bid for the airwaves first, ahead of existing telecom operators, it said in a statement.

Singapore has three telecom operators - Singapore Telecommunications Ltd, M1 Ltd and StarHub - but two local firms have said they are interested in bidding at the auction. They are fibre broadband services provider MyRepublic and OMGTel, a unit of wireless systems firm Consistel.

The auction aims to allow a fourth telecom operator to join the market and to give existing players more spectrum to cope with rising demand for mobile data.

Singapore has a mobile phone penetration rate of about 150 percent but its population of just 5.5 million means it is still a relatively small market. Analysts say a new entrant would face an uphill task securing a meaningful share of it, while having to invest substantially to set up infrastructure.

Hong Kong, however, also a relatively small market with a population of 7.3 million, has four telecom operators.

The agency had earlier proposed offering a different set of frequencies at S$40 million for the new entrant, representing a discount of 60 percent to the full reserve price. "The starting price of the spectrum for the new entrant spectrum auction has been adjusted to reflect the starting bid price for a different combination of spectrum with greater potential to deliver higher-speed broadband services," it said.