IDA wants fourth telco, auction slated for Q3 this year and new player could go online by April 2017

IDA is offering a proposal for a fourth potential telco to start up, which could begin services from as early as April 2017.
IDA is offering a proposal for a fourth potential telco to start up, which could begin services from as early as April 2017.PHOTO: ST FILE

SINGAPORE - The local authorities are sticking to their guns on a generous proposal to woo a fourth telco to set up here, and have set the date for a mobile airwave auction for sometime in the third quarter of this year.

Despite strong objections from the three existing telcos - Singtel, StarHub and M1 - the Infocomm Development Authority (IDA) said it will offer the possible newcomer 60MHz worth of mobile frequencies at an even lower reserve price of $35 million.

It initially wanted to offer the same amount of a different mix of frequencies at a reserve price of $40 million, or a 60 per cent discount.

IDA's unprecedented and controversial proposal to reserve a third of all the usable frequencies in the premium 900MHz band for the potential newcomer also stays. It is a premium band as it allows for a better signal with less equipment.

Potential newcomers will get to bid for the airwaves first, ahead of existing telcos. That means consumers may be able to expect services from a potential fourth telco as early as April 2017.

"Having more players in the market will give consumers a greater choice in selecting an offering that best suits their needs," said IDA managing director Jacqueline Poh.

IDA said that it needs to help the potential new entrant as there are high entry barriers.

For one thing, the potential newcomer would not have any revenue while incurring a huge capital expense in rolling out a brand new network. Existing players are also expected to bid prices up to keep out the newcomer, IDA said.

The authority made the decision after consulting with the industry from July to August last year.

Two local companies - fibre broadband services provider MyRepublic and a unit of Consistel, which set up the Singapore Sports Hub's wireless systems, are eyeing the chance to become the fourth telco here.

MyRepublic and OMGTel, Consistel's telco unit, had hit out at Singtel, StarHub and M1 for objecting to IDA's initial proposal.

Singtel, StarHub and M1 did not want their share of the 900MHz band to be substantially reduced when their existing rights to the premium band expire in April 2017.

They said that existing mobile users' 3G mobile voice connections would suffer if they did not retain their current holdings.

The 900MHz band has been used to deliver better indoor coverage, especially in dense housing estates. This is to meet IDA service standards, which have been steadily tightened over time.

For instance, in April 2013, IDA required telco networks to cover at least 99 per cent of outdoor areas, and 85 per cent of all floors in buildings. An operator which fails to meet the various standards may be fined up to $50,000 every month for each breach.

On this point, IDA said that every existing telco will get to keep at least 10MHz worth of their existing 900MHz frequencies based on its latest decision. Telcos also have other frequencies such as 2.1GHz for their 3G services, IDA noted.