Entry of new telco likely to spur innovation, competition

We refer to the letters by Dr Loo Han Woen, Mr Ben Chen and Mr Seah Yam Meng ("New entrant will wake incumbents up", "Tweak policies to make telcos compete", and "Price war shows telcos' unhealthy practices", Forum Online; all published on March 14).

Last month, the Infocomm Development Authority (IDA) announced that it will facilitate the entry of a new mobile network operator.

The decision followed two public consultations that were conducted in April 2014 and July last year, where potential new entrants indicated strong interest to enter the mobile market.

While IDA's facilitation measures will lower barriers to entry, the new entrant will have to compete in the market on its own merit to win customers and gain market share.

Hence, a new entrant is likely to enhance innovation and competition in the mobile market in the interest of consumers.

IDA has observed that the entry of new players in other jurisdictions brought about more innovative mobile plans and decreased prices by up to 40 per cent.

New and innovative service offerings were also introduced to better meet different customer segments' needs.

On concerns over the similarity in prices of telcos' services, the pricing of services by telcos at or near the price levels of other competitors in itself is not direct evidence of collusive behaviour.

However, operators are strictly prohibited from entering into agreements to fix prices, reduce output, or share markets.

IDA takes a serious view of and remains vigilant against any instances of collusion or anti-competitive conduct among the telcos.

Lim Keng Soon

Deputy Director, Government and Policy Communications

Infocomm Development Authority of Singapore

A version of this article appeared in the print edition of The Straits Times on March 21, 2016, with the headline 'Entry of new telco likely to spur innovation, competition'. Print Edition | Subscribe