In Business Model, Internet Access, Mobile, News, Spectrum

In any competitive market, the lowest-cost provider tends to have a big advantage. And that seems to be precisely what regulators in Singapore are trying to provide, in reserving 60 MHz of spectrum for a new entrant in the mobile business, and offering a discount on the cost of the spectrum licenses of up to 60 percent.

Competition is not generally considered to be a particular problem in Singapore’s Internet access or mobile businesses.

Nevertheless, Singapore wants more competition, as regulators plan to license spectrum enabling a fourth mobile operator, reserving 60 MHz of planned new spectrum–out of a total of 225 MHz–exclusively for a new entrant into the market.

Singapore’s  Infocomm Development Authority (IDA) plans to auction spectrum in the 700 MHz band, 900 MHz, 2.3 GHz and 2.5 GHz bands.

The indicative auction reserve price for the 700 MHz and 900 MHz bands is set at S$20 million per 5 MHz pair, while that for the 2.3 GHz and 2.5 GHz bands is set at $5 million per 5 MHz block.

The reserved spectrum, to support a new entrant, has a lower reserve price of S$40 million, representing a huge price discount. The new entrant will have access to 20 MHz in the 700-MHz range, 20 MHz in the 900-MHz range and 20 Mhz in the 2.3 GHz band, with the 900-MHz and 2.3-GHz capacity being made available first.

Singapore’s efforts to stimulate market entry by a fourth provider also has been an interest in South Korea, though those earlier efforts, in both countries, have not lead to success.

In setting aside the new spectrum for a fourth provider, IDA said it had “found no conclusive evidence that the entry of new operators led to depressed capital investments in the mobile sector.”

MyRepublic, a Singapore Internet service provider backed by French billionaire Xavier Niel and Indonesia’s Sinar Mas Group, is raising S$250 million to support its bid to become the fourth mobile provider.

Consistel, a regional wireless software provider, also plans to bid.

Incumbents Singtel, StarHub and M1 already are undertaking promotions to defend market share. MyRepublic says it will not compete on price, but perhaps few observers actually believe that will be the case.

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