Two firms in race to be Singapore's fourth telco

Singapore

AFTER months of speculation, it's final. Singapore will get a fourth telco next year and it will be a two-horse race between local broadband services provider MyRepublic and Australian telecom services provider TPG Telecom.

The two will participate in what is called the new entrant spectrum auction (NESA), to be held later this year. The winner of the NESA will become Singapore's fourth mobile network operator (MNO).

MyRepublic and TPG will bid for 60 MHz of spectrum from the 900 MHz and 2.3 GHz bands which have a reserve price of S$35 million. With two contestants there will be a bidding in which the final price will go up.

The Infocomm Media Development Authority of Singapore (IMDA), which will be overseeing the auction process, hopes to complete the NESA by the end of this year, it said in an announcement on Wednesday.

Apart from the two entrants, another company, airYotta Pte Ltd, had also submitted its interest in becoming the fourth telco. Following a review of the three sets of expression of interest (EOI) documents submitted in September this year, IMDA said in a statement that it is satisfied that MyRepublic and TPG have met the NESA pre-qualification criteria. An IMDA spokesman added: "airYotta did not fully meet these requirements and will not be participating in the NESA."

An IMDA spokesman added that the regulator arrived at its decision after looking at all relevant factors. These included whether the prospective new entrants satisfy the "fit and proper person" criteria, particularly whether they have the management skills, competencies and operational experience in deploying and operating a public telecommunication network and in providing retail telecommunication services to consumers and enterprise users.

"IMDA also looked at whether the prospective new entrants have the financial, technical and engineering capabilities required to establish a telecommunication system for the purpose of providing 4G and/or IMT-Advanced services." IMT-Advanced services refer to quality of service (QoS) standards for telecom services, particularly mobile-broadband services.

Upon completion of the NESA, IMDA will proceed with the second stage, the general spectrum auction (GSA), which will be open to the existing MNOs - M1, Singtel Mobile and StarHub Mobile. The winner of the NESA can also participate in the GSA, if it chooses to do so. IMDA aims to start the GSA in the first quarter of 2017.

Commenting on the IMDA announcement, a MyRepublic spokesman said this was a "validation of MyRepublic's readiness and capability to be Singapore's 4th mobile operator".

He said that since the company announced its intention to be Singapore's fourth mobile operator, more than "80,000 people have expressed their support". He added: "We remain committed to bringing Singapore a truly fixed-mobile converged offering, including generous data, seamless coverage and support for the massive potential of the Internet of Things (IoT)." Apart from Singapore, MyRepublic has operations in Indonesia, Australia and New Zealand.

Unlike MyRepublic, Australia-based TPG Telecom is a late entrant to the race. The information that it was interested surfaced only after it responded to IMDA's call for expressions of interest earlier this year.

The TPG group is a substantial telco in Australia, being the second largest supplier of fixed line broadband in the country. It also sells mobile services as an MVNO (mobile virtual network operator) for Optus and Vodafone and offers WiMAX services. It has more than 1.8 million broadband customers and more than 460,000 mobile services in operation in Australia.

Unlike MyRepublic, which is a privately held company, TPG is listed. For its fiscal year 2016, which ended on Sept 30, it reported a revenue of A$2.39 billion (S$2.53 billion) with a revenue growth of 88 per cent.

According to its September annual report, in which it mentioned that it had lodged an expression of interest, it hoped to bid for up to 75MHz of spectrum; if it bags the 60MHz during NESA, it will bid for an additional 15MHz at the GSA. It also indicated that the Singapore business would be funded from existing debt facilities and cash generated from Australian operations.

A TPG spokesman told The Business Times that the company believed "strongly" that mobile telephony and broadband are going to continue to grow in importance. "We are excited about the opportunity that the IMDA has created by enabling the possibility of a fourth entrant in Singapore ... We look forward to bidding at the auction and hope to be able to bring fantastic value services to Singapore consumers very soon."