IDA proposes heavily discounted rate to attract 4th telco into local market

The potential fourth telco is expected to roll out services nationwide by the end of September 2018.
The potential fourth telco is expected to roll out services nationwide by the end of September 2018.ST PHOTO: KUA CHEE SIONG

SINGAPORE - The local authorities have proposed to set aside mobile spectrum at a heavily discounted rate to entice a fourth telco to set up here, in a bid to spur competition and bring benefits to consumers.

The market has somehow settled into three big camps, with existing mobile telcos Singtel, StarHub and M1 each serving about one-third of the market and offering little price differentiation.

But this is set to change when the Infocomm Development Authority's (IDA) proposal to let the potential fourth telco bid for airwaves at a reserve price that is 60 per cent lower goes through. The auction framework is expected to be finalised by the end of this year. Auction application is slated to begin early next year.

Specifically, some 60MHz of spectrum at a reserve auction price of $40 million will be set aside for the potential fourth telco, according to IDA's proposal.

"This is in recognition of the fact 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," said IDA.

Spectrum will also be available for bidding by existing telcos Singtel, StarHub and M1 in a general auction at a higher reserve price to meet the growing consumer demand for mobile data traffic.

The proposal is part of a public consultation launched on Tuesday by IDA. The consultation will end on Aug 12.

The potential fourth telco is expected to roll out services nationwide by the end of September 2018.

Past efforts to issue a fourth mobile operator licence have been unsuccessful. When 4G airwaves went on sale in 2013, no fourth mobile player showed up.

itham@sph.com.sg