IDA to release more spectrum, to allow entry of new operator
By Digital News Asia July 8, 2015
- Singapore to conduct a spectrum allocation exercise in early 2016
- Spectrum being set aside for new entrant auction
THE Infocomm Development Authority of Singapore (IDA) is proposing to release more spectrum for mobile broadband services and to facilitate the entry of a new mobile operator.
In April 2014, IDA consulted the public on the allocation of radio spectrum for mobile broadband services as well as the introduction of further competition.
Several industry players supported the allocation of more spectrum in view of the increasing consumer demand for mobile data services, IDA said in a statement.
Potential new entrants also indicated strong interest to enter the mobile market, it added.
The city-state is already served by M1, Singapore Telecommunications (Singtel) and StarHub. The hopeful new entrants include MyRepublic and OMGTel, the latter backed by public transport operator SMRT.
In its statement, IDA said it targets to conduct a spectrum allocation exercise in early 2016 to make available a total of 225MHz of spectrum for mobile services, after taking into account industry responses from the consultation and international developments in spectrum use.
The proposed spectrum to be allocated will include those in the 700MHz band, which is the spectrum to be freed up upon the completion of the digital TV switchover and the switching off of the analogue TV signals, as well as spectrum in the 900MHz, 2.3GHz and 2.5GHz bands.
This is in addition to the 270MHz of 4G (Fourth Generation) spectrum released in 2013, IDA said.
The indicative auction reserve price for the 700MHz and 900MHz bands is set at S$20 million (US$14.8 million) per 5MHz pair, while that for the 2.3GHz and 2.5GHz bands is set at S$5 million (US$3.7 million) per 5MHz block, it added.
Better, wider services
The entry of a new mobile player will increase competition in the mobile services market, IDA said.
A new entrant is likely to bring about a wider variety of innovative services and more competitive offerings to the benefit of end-users, the agency said.
For example, the entry of new broadband Retail Service Providers offering services over the Nationwide Broadband Network (NBN) has led to the introduction of innovative broadband packages at competitive prices in the fixed broadband market.
IDA said it observed that globally, markets such as France and Spain experienced competitive mobile price plans and the introduction of new service offerings following the entry of a new mobile player.
In addition, a new entrant may incentivise incumbents to invest in infrastructure upgrades leading to an improved quality of experience for consumers.
Various studies have also shown that global mobile data traffic is expected to grow between 40% and 60% over the next few years. New growth areas such as the Internet of Things and Machine-to-Machine communications will offer business opportunities and growth potential for the mobile market, especially with Singapore’s effort towards building a Smart Nation, it added.
“IDA has always been open to the entry of telcos that can bring about innovative and competitive services in the market, and enhance mobile broadband services on a sustainable basis,” said IDA managing director Jacqueline Poh (pic).
“These proposals have taken into consideration market interest as well as initial industry feedback,” she added.
Spectrum set aside for new entrant
Given the strong interest from the market and the potential consumer benefits to be reaped with a new entrant, IDA proposes to facilitate the entry of a new mobile network operator by setting aside 60MHz out of the 225MHz of spectrum at a lower indicative reserve package price of S$40 million (US$29.6 million), for a spectrum auction that is opened only to potential new entrants.
This is in recognition of the fact that a new entrant will face entry barriers in a mature market, given the significant upfront capital investments required to deploy nationwide services for consumers, IDA said.
The new entrant which successfully bids for this set-aside spectrum package is required to deploy its own network and achieve nationwide rollout by end-September 2018.
IDA also proposes to provide guiding principles to aid wholesale negotiations between Mobile Virtual Network Operators (MVNOs) and mobile network operators, recognising that MVNOs which have the ability to re-package wholesale services into their own service offerings can also bring about innovative service offerings for targeted consumer segments.
Given the size of Singapore’s mobile market and global market developments, IDA does not at this juncture see Singapore’s mobile market being able to sustain more than four nationwide infrastructure players with new MVNOs also entering the market.
As the spectrum bands to be released at the coming auction and the framework to facilitate market entry are significant decisions to be taken by IDA, IDA has decided to allow an opportunity for the industry and public to comment on IDA’s proposals before finalising them.
The public consultation began July 7 and will close on Aug 12, 2015.
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