The proposal by Singapore’s regulator – Infocomm Development Authority (IDA) – last week to significantly lower the barriers to entry for a fourth mobile player as well as ease the path for potential MVNOs to launch services has been met with widespread approval as well as a fair bit of scepticism.
ISP and likely bidder in the next auction, MyRepublic, gushed that IDA’s proposal was “wonderful news”.
MyRepublic managing director Yap Yong Teck told Mobile World Live: “It illustrates the IDA’s commitment to guiding Singapore towards becoming the world’s leader in mobile connectivity. The spectrum allocated to the fourth mobile operator will… enable MyRepublic to accomplish our vision of building an innovative low-capital small-cell network that focuses on improved mobile internet connectivity.”
He noted that it is pleased that the reserve price is lower for the new entrant.
To understand the extent of the spectrum discount, the full 60MHz block reserved for a newcomer will have a base price of just SGD40 million ($29.5 million). The reserve price for the 2 x 5MHz in the 700MHz band in the general auction will be SGD20 million, which is more than three times higher per megahertz.
The 60MHz will be part of 225MHz of new spectrum to be auctioned off next year.
Liberty Wireless, which last week also announced M1 as its network partner for its soon-to-launch postpaid MVNO service in Singapore, welcomed IDA’s view that there may be scope for greater competition.
But Liberty director Adeel Najam told Mobile World Live that despite the new measures, the investment required for a new mobile operator in Singapore is still significant.
Lack of roaming
The IDA has not mandated national roaming for the new operator, which some say would significantly decrease the barriers to entry. This was one of the suggestions submitted by the 20 companies commenting on IDA’s public consultation.
Ovum senior analyst Nicole McCormick said she is surprised there is no mandated national roaming, which “I would have thought would be a key criteria for a new operator in a market such as Singapore”.
Analysts say the omission is significant but was expected since it would have been a “radical” step for Singapore and not easy to implement. Without mandated national roaming, the 4th mobile network operator (MNO) will have to build its own full network. While the discounted spectrum helps, the build-out of the towers, civil works and other capex required is very high, making the business case for a 4th network challenging.
IDA also does not intend to impose additional measures suggested by some for new obligations on site access or RAN sharing on the incumbent MNOs, since it noted there are already regulatory frameworks in place.
In addition, the winning bidder will need to roll out nationwide coverage on the 900MHz band within 18 months.
While MyRepublic’s Yap said that launching nationwide in between 18-24 months is “reasonable”, McCormick called the timeframe aggressive, even given the small size of Singapore.
“Combined [with lack of mandated roaming] this will make it challenging for a newcomer, and just how receptive the incumbents will be is a big unknown,” she declared.
The incumbent operators will be required to provide interconnection and mobile number portability “within a reasonable timeframe” to the new operator. And as a condition to the upcoming auction, they will have to “negotiate in good faith” with the new licencee to provide access to common antenna systems. The likely result is that the MNOs will be more cautious before engaging with a party for MVNO discussions.
But the wording of those statements leaves a great deal open to interpretation, and doesn’t go as far as “obligating” them. Again, the question is how supportive the incumbents be will.
The winning bidder will have rights to the spectrum for 12-16 years, which will be the same length for the winners of the 700MHz band in the general auction. If there are not participants in the new entrant auction, the spectrum will be moved to the general auction.
The MVNO option
While IDA’s 39-page response to the public consultation focused mainly on a fourth licence, it also announced a few steps to ease the path for new MVNOs in Singapore. The key measures are requiring the incumbent MNOs to negotiate in good faith to provide wholesale access to MVNOs and aiding the process by publishing “negotiation principles”, with the IDA acting as a mediator in cases of a dispute.
Liberty’s Najam said it is a good step. “Although it is not mandated, when the MNOs are drafting their contracts they will have to keep these principals in mind. These principals will also be useful for the MVNOs in their long-term sustainability.”
Most people agree the IDA’s measures will help to level the playing field for MVNOs, which have struggled to make a profit in Singapore in the past.
As for a fourth operator, in 2013 the IDA also set aside airwaves to facilitate the entry of a new MNO, but no new player stepped forward to bid for the fourth 4G licence.
With the IDA sweetening the pot with more spectrum and a discount this time around, and interest expressed by a number of potential entrants, including MyRepublic and a SMRT-funded venture, Singapore could well be on the path to opening up to more innovative, flexible and transparent mobile packages via a fourth operator and multiple MVNOs serving the market’s 5.6 million consumers.
Let’s hope the newcomers have deep pockets for a long battle with Singapore’s three existing MNOs.
The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.