Singapore is dangling a mega carrot in the form of discounted spectrum as part of efforts to entice a fourth player to enter the country's mobile market.
The Infocomm Development Authority (IDA) said it would slash the reserve package price of spectrum set aside for a new mobile player to S$40 million (US$29.63 million), in a proposed auction targeted to take place in early 2016. This would comprise 60 MHz out of 225 MHz allocated for sale at the bidding exercise.
Given its size, IDA added, Singapore's mobile market was unlikely to sustain more than one new entrant on top of the existing three operators--M1, StarHub, and Singtel. It also noted that new mobile virtual network operators (MVNOs) would be entering the market in the proposed spectrum allocation exercise.
Despite the high mobile penetration rate in Singapore, which currently clocks at 148.5 percent, IDA believes a fourth operator would boost market competition and drive new services and more competitive offerings. It further pointed to Internet of Things (IoT) and machine-to-machine communications as upcoming market segments that would offer new growth potential for mobile players.
Should a fourth mobile license be awarded, the new operator must deploy and obtain nationwide network rollout by the end of September 2018, according to IDA. It said the package reserve price was lowered because the new player would face barriers entering a mature market and need significant capital investments to roll out mobile services across the country.
No bidding war occurred at Singapore's first 4G spectrum auction, held in June 2013, in which all three operators obtained their required spectrum at the reserve price. Each 1800 MHz spectrum lot then was sold at S$16 million, while 2.5 GHz spectrum lot was priced at S$10 million each. IDA also had set aside 40 MHz of spectrum in the 2.5 GHz band for a new operator, but no bids for this were submitted.
Since then, a couple of service providers have expressed their interest in taking up the fourth seat. Among them is MyRepublic, which in June 2014 said mobile consumers were "underserved"in a market that needed more competition. The fiber broadband operator said it was keen to become the fourth mobile operator, but only if certain market conditions were met to ensure its viability. MyRepublic said the market entrant would need "regulatory support and backing" to succeed as well as sufficient spectrum to support nationwide network coverage and capacity.
IDA currently is seeking public and industry feedback for the auction proposal before it finalizes the details. Public consultation will end August 12, 2015.