MyRepublic’s ambition to become Singapore’s fourth mobile player looks to be facing a serious challenge from Consistel, a regional wireless network provider, which reportedly appointed an investment banker to raise nearly $1 billion to fund its bid.
Consistel chairman Masoud Bassiri said it will “absolutely” join the bidding, and plans to inject as much as SGD1.3 billion ($940 billion), with a mix of debt and equity funding, Bloomberg reported.
Meanwhile, potential rival bidder MyRepublic, backed by French billionaire Xavier Niel and Indonesia’s Sinar Mas Group, approached a number of international investment banks, including Goldman Sachs and DBS Group, to raise SGD250 million ($181 million) to support its bid, Bloomberg said.
The ISP, with about a 5 per cent share of Singapore’s broadband market, certainly appears confident and in early March insisted that its lower cost base means it can start small and still be profitable within three years.
MyRepublic’s CEO, Malcolm Rodrigues, said that as a new entrant, without legacy systems, it would have a big cost advantage over rivals. He said it will need about SGD300 million ($214 million), less than a third of the conventional infrastructure cost, to build a nationwide 4G network as it can use existing facilities from its internet business.
MyRepublic is already putting pressure on Singapore’s three established mobile operators, even before the bidding starts. Last week, the mobile hopeful said it aims to introduce unlimited data tariffs for SGD80 (about $58) a month, as well as offering 2GB data plans for just SGD8 per month, if it wins the fourth licence.
Within 24 hours of the announcement, Singtel, StarHub and M1 announced heavy data discounts for their postpaid 4G customers.
The deep discounts the operators rushed to announce certainly show the market is ripe for additional price competition on data plans.
Consistel said that it was too early to discuss mobile tariffs and its focus would be to build a network that is equal or superior to what is available now, Business Times reported.
Consistel, which has provided 3G indoor coverage for the city-states’ mobile operators, has built out 800 wireless sites in Singapore and 5,000 sites regionally, the Times said.
Easing the entry path
Last month Singapore’s Infocomm Development Authority (IDA) released a detailed framework for its previously announced spectrum allocation, which Fitch Ratings says will ease the path for the entry of a fourth mobile operator and intensify competition.
The regulator lowered the reserve price for the 60MHz of spectrum that will be set aside for a new operator to SGD35 million ($25 million) from SGD40 million and doubled the allocation of spectrum in the 2.3GHz band to 40MHz.
In July the IDA proposed setting aside 60MHz out of a total of 225MHz of new spectrum at a lower reserve price in a separate auction to be open only to new entrants.