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No foreign ownership issues in TPG's path to becoming fourth Singapore telco

The Australian telco says it is not aware of any concerns specific to its operations in Singapore, where it has a local entity and will have an employee base of some 450.
Written by Eileen Yu, Senior Contributing Editor on

[Editor's note: This article has been updated to include comments from IMDA.]

Having just secured the license to become Singapore's fourth telco, TPG Telecom says there has been no concerns about its operations here where it plans to invest up to S$300 million in rolling out its outdoor network.

The Australian carrier would be the first non-local operator and only new player to enter the Singapore market in 15 years, since Virgin Mobile pulled out of its joint venture with Singtel in 2002, just one year after launch.

TPG edged out fellow bidder and local service provider, MyRepublic, with its winning bid of S$105 million in the New Entrant Spectrum Auction, three times the reserve price of S$35 million. It would join existing local operators--Singtel, M1, and StarHub--as Singapore's fourth telco, with the new spectrum rights expected to commence no earlier than April 1 next year.

Telcos with facilities-based licenses in Singapore would have to establish a local incorporated entity, which could be wholly-foreign owned, according to Bryan Tan, partner at law firm Pinsent Masons, who specialises in technology and telecommunications. This was not unique to the telco industry, he said.

Tan noted that it also was "impossible to limit ownership to Singaporeans" even for public-listed telcos here, pointing to Malaysia's Axiata, which was the largest shareholder of M1. Pointing to government procurement rules by WTO (World Trade Organisation), he further noted: "The mere fact of foreign ownership should not be grounds to discriminate from bidding."

He said all telcos still would be subject to various standard requirements including the Telecom Code of Competition, which had additional provisions specific to facilities-based licenses, and quality-of-service guidelines. Operators also would have to adhere to S15A rules stipulated in Singapore's Computer Misuse and Cybersecurity Act, which dealt with cybersecurity measures and requirements.

TPG Telecom's general counsel and spokesperson Tony Moffatt told ZDNet it was incorporated in Singapore on July 1 this year and planned to grow its local headcount to some 450. The telco was projected to spend between S$200 million and S$300 million, in addition to the S$105 million bid amount, to deploy its outdoor network, Moffatt said.

In response to its foreign ownership, he said: "We are not aware of any particular concerns about TPG operating a mobile network in Singapore and note that Singtel owns the second largest mobile network in Australia.

"TPG Telecom Pte Ltd will be a Singapore company with strong local management. We believe Singaporeans can have great confidence in the security and stability of our network," he said. "At this early stage, all our energy will be spent building out a robust and effective network to meet the requirements of [industry regulator] IMDA and the needs of our prospective Singaporean customers."

Moffatt did not comment directly on questions about whether TPG would bid for government tenders or provide cloud services for the public sector.

According to Tan, there would sometimes be other considerations for vendor selection, for example, in cybersecurity, which was excluded from government procurement policies. He noted that the Singapore government was "very active" in security, taking the lead in initiatives such as operating its own separate network and air gap.

"Another area of concern would be on quality-of-service, but with the ability of IMDA to regulate and impose fines, this ensures the essential service is kept up to the promised standards. IMDA can even suspend or cancel licenses," he said.

MyRepublic, which made a final bid of S$102.5 million, said pushing this figure past S$105 million did not support its "vision and business case" for mobility in Singapore.

Its CEO Malcolm Rodrigues said in a statement: "At the current spectrum price, a new entrant must achieve a much higher market share [of MyRepublic's original target of 9 percent] to survive and be successful. This creates a risk level in the business plan that doesn't make sense to us for the Singapore market."

He said the company now would continue to expand its operations in fixed broadband services in the region and look for opportunities in mobilities in other markets. He added that it planned to build an enterprise IoT platform.

Apart from Singapore MyRepublic currently offered its broadband services in New Zealand, Australia, and Indonesia.

Although asked, TPG's Moffatt did not provide specifics on how the telco planned to grow its customer base in Singapore.

Having established its place in fixed-line communications, the Australian telco last week said it was looking to grow its footprint in mobile--both in its domestic market and Singapore--to buffer margins pressure as its ADSL business was replaced by the NBN.

In response to ZDNet's queries, an IMDA spokesperson provided the following statement:

"The telecommunication market in Singapore has been fully liberalised since 2000. IMDA does not restrict foreign ownership or shareholding in telecommunication licensees. Foreign companies that wish to deploy telecommunication infrastructure and provide telecommunication services in Singapore will have to set up a locally incorporated company, which can be wholly foreign owned, and apply for a licence from IMDA. There are many foreign-owned telecommunication licensees in Singapore, including AT&T, Verizon, BT, Vodafone, Tata, and Telstra.

When assessing a company's application for a licence to operate important telecommunication systems and provide such services, IMDA will take into consideration various factors including whether their shareholders--regardless of foreign or local--have good financial standing, are committed and capable, possess integrity and credibility, and whether they raise any public interest concerns. IMDA also will consider the technical and management competency of the board and management team. IMDA had made such assessments before it pre-qualified TPG Telecom and MyRepublic for the new mobile operator spectrum auction.

In addition, all licensees are required to comply with regulatory requirements imposed by IMDA. This would include the requirements on market conduct, service quality, resiliency, and security. All licensees are also required to comply with laws in Singapore and render their fullest co-operation to relevant agencies to safeguard public safety and security."

The IMDA spokesperson, though, did not comment on queries regarding TPG's potential participation in government tenders and whether the telco would be permitted to provide cloud and cybersecurity services for Singapore's public sector.

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