Telcos' concerns over subsidy for newcomer valid

The questions and concerns raised by Singtel, StarHub and M1, in response to the Infocomm Development Authority of Singapore's proposal to incentivise a new entrant to the industry are relevant and merit serious consideration ("Telcos object to subsidy for newcomer"; Tuesday).

The $60 million subsidy to let the newcomer bid for 60MHz worth of spectrum could have gone towards building common facilities, which all telcos can access to improve reception, especially in public buildings.

Subsidies ought not to be given to profit-oriented companies, unless they provide a monopolistic essential service.

The $60 million subsidy could have gone towards building common facilities, which all telcos can access to improve reception, especially in public buildings.

Furthermore, where is the guarantee that having a new telco will result in more competitive pricing and services?

In a free market, over time, prices and services will stabilise around the core consumer demand, and no company will want to take the lead to change prices.

If the objective of having a new entrant is to put pressure on the existing telcos to ensure they continually improve, then it is more relevant to set higher connectivity and reception benchmarks.

Ultimately, consumers want reliable reception and good and dependable services.

Christopher Tang Wei Ling

A version of this article appeared in the print edition of The Straits Times on September 10, 2015, with the headline 'Telcos' concerns over subsidy for newcomer valid'. Print Edition | Subscribe