New telco will have to compete on own merits

Mr Christopher Tang Wei Ling ("Telcos' concerns over subsidy for newcomer valid"; Sept 10) has asked the Infocomm Development Authority to seriously consider the arguments brought up by incumbent telcos against efforts to facilitate a new entrant into the market.

By facilitating competition in the telecommunications market, IDA's aim is to bring about sustained benefits and value to the end users.

In a public consultation in April last year, we received positive feedback on the potential for a fourth mobile operator to bring about greater competition and service innovation in Singapore.

This was the experience of some telecoms markets, which saw lower average mobile plan prices and the introduction of new service offerings following the entry of a new mobile operator.

A new mobile operator will face significant barriers to enter the Singapore market, such as the high cost of deploying a nationwide mobile network and acquiring sufficient spectrum to operate this network.

IDA is therefore proposing to set aside a sufficient amount of spectrum for bidding at a lower starting bid price for potential new entrants.

IDA is not providing any subsidy because the final price of the spectrum will be determined through an auction, and it will reflect the market value of the spectrum to a new entrant.

Globally, other countries have also employed similar initiatives to facilitate the entry of new mobile operators.

Potential new entrants will also be subject to pre-qualification checks to ensure that they have the financial and technical capabilities to establish and operate a telecommunications network.

In addition, any new entrant will need to deploy its network to provide nationwide coverage, meet service quality standards and regulatory requirements set by IDA, and compete and sustain its business in the market based on its own merit.

For example, IDA's stringent Quality of Service standards require mobile operators to provide at least 99 per cent islandwide outdoor coverage and at least 85 per cent coverage in buildings.

Such regulatory standards and requirements, among others, will be applied to the new entrant and are reviewed regularly.

We thank Mr Tang for his comments, and will take them into consideration together with the feedback received from our consultation.

Ng Sook Fun (Ms)
Director, Communication
Infocomm Development Authority of Singapore

A version of this article appeared in the print edition of The Straits Times on September 28, 2015, with the headline 'New telco will have to compete on own merits'. Print Edition | Subscribe