TPG Telecom has secured the license to become Singapore's fourth telco, in a "surprising" result that puts the focus on the Australian carrier's ability to win over local customers.
In a statement released Wednesday, the Infocommunications Media Development Authority (IMDA) said TPG had submitted the winning bid of S$105 million (US$73.45 million) in the New Entrant Spectrum Auction, beating the only other participant, MyRepublic. The reserve price for the auction was S$35 million, which was discounted from a previously proposed S$40 million.
With its winning bid, TPG would be allocated 60MHz of spectrum, comprising 20MHz in the 900MHz spectrum band and 40MHz in the 2.3GHz spectrum. It would enable the telco to offer IMT (International Mobile Telecommunications) and IMT-Advanced services such as 4G.
According to IMDA, the new spectrum rights were expected to commence no earlier than April 1 next year. The actual commencement date was dependent on the completion of the next stage of the auction, it explained, adding that the spectrum allocation would be finalised only after the relevant spectrum fees had been paid and the respective band frequencies assigned.
Describing the auction results as somewhat "surprising", Forrester's vice president and research director Frederic Giron noted that MyRepublic had built up its brand as a disruptor in Singapore.
"[It had] done a lot to win the hearts of its broadband customers. On the other hand, TPG Telecom is much better capitalised than MyRepublic," Giron said, pointing to the former's winning bid for the spectrum.
The analyst said TPG would likely pitch a digital-only service offering in a bid to edge ahead of its competitors in price and customer experience. He noted, though, that this strategy might not be sustainable as other telcos were "ready to compete". Singtel, for instance, touted a "customisable" mobile price plan via its EasyMobile service offering.
Giron said: "Customer experience is the only sustainable competitive differentiation in a digital world. For TPG to succeed in Singapore, it will have to focus on providing a superior customer experience to create a competitive advantage."
To do this, it would need to understand the needs of local consumers as well as what these customers' expected from mobile operators with regards to service effectiveness, ease of use, and level of enjoyment, he said.
IMDA said the TPG would need to utilise the allocated spectrum to offer nationwide street-level 4G coverage within 18 months from the start of the new spectrum rights. It also would need to establish service coverage in road tunnels and in-building within 30 months as well as MRT underground stations and lines within 54 months.
The industry regulator added that it would soon proceed with the second phase of the auction, which would put new spectrum up for auction to existing mobile operators--M1, StarHub, and Singtel--as well as TPG. This general spectrum auction was targeted to be held in the first quarter of next year.
Having established its place in fixed-line communications, TPG last week said it was looking to grow its footprint in mobile--both in its domestic Australian market and Singapore--to buffer margins pressure as its ADSL business was replaced by the NBN.