'Regulate wholesale mobile services market'

Potential players want rules that ensure network access and fair pricing

MOBILE users are one step closer to having more choices as potential telcos have revealed plans to set up shop here.

But to pave the way for new players, firms taking part in a recent public consultation by the Infocomm Development Authority (IDA) have suggested that the wholesale mobile services market be regulated to ensure a level playing field.

The two-month consultation ended last week and involved 20 firms, including fibre broadband services provider MyRepublic, which wants to be the fourth telco here and compete with existing trio SingTel, StarHub and M1.

Also involved were several other firms that want to operate as mobile virtual network operators (MVNOs).

MVNOs provide mobile services by buying airtime in bulk from the existing telcos instead of building their own physical mobile networks.

Many firms said in the feedback exercise that the unregulated wholesale market in mobile airtime and data had deterred the entrance of new players into Singapore's mobile services sector, according to documents on IDA's website seen by The Straits Times.

Wholesale agreements are signed privately between MVNOs and the big three telcos, with no regulation by IDA over pricing and access conditions.

The telcos impose restrictions in areas such as sales and marketing, said Phoenix Communications, a local MVNO that provides cheap international call services. This could be why the 13 MVNOs here serve less than 1 per cent of the 8.4 million mobile lines here.

Phoenix suggested that a "neutral party" be set up to bridge the gap between existing telcos and MVNOs on matters such as billing and dispute resolution - for a fee. It wants to be that neutral party.

Broadband services provider SuperInternet, in turn, said dominant telcos should not be allowed to stop MVNOs from acquiring airwaves to expand their mobile services. It has plans to buy airwaves and become a full-fledged telco when its business picks up.

SuperInternet also said it had been pursuing an MVNO deal with the telcos for several years but without success. MyRepublic wants to go beyond regulation.

It said such regulation "will not go far enough" to enhance competition as an MVNO is "tethered to the legacy infrastructure and thinking behind conventional mobile operator service delivery, pricing and quality of experience".

A better alternative is for the regulator to make it easier for a fourth full-fledged telco to enter the market.

MyRepublic has proposed to roll out its own network based on new technologies that support auto-switching between cellular and Wi-Fi networks for more efficient use of limited airwaves. It plans to offer unlimited mobile data bundles to consumers to stand out from the three telcos here.

Singapore-based wireless systems installer Consistel supported the need for a fourth telco, saying it is "vital to enhancing competition". It also said MVNOs are more likely to succeed by working with the fourth telco.

Predictably, SingTel, StarHub and M1 were against regulatory intervention, saying there was no evidence of market failure.

M1 proposed a "light-touch free market" approach as telcos here are accountable to shareholders for delivering a reasonable return from the substantial airwave and network investments.

StarHub said mandating wholesale access to telcos' networks and regulating wholesale rates are "highly intrusive and disruptive". Mobile networks are privately funded and not owned by the Government, it added.

SingTel cited examples of leading MVNO markets in Britain and the Netherlands that have become successful without regulation.

SingTel warned against "blunt" regulatory measures that might result in underinvestment in networks, which will hurt consumer interests.

For instance, new players may use wholesale price regulation for starting price wars that undermine investments in networks.

"Unnecessary regulation may itself spur incentives for inefficient behaviour," it added.