Consistel unit confirms 4th telco ambitions

Singapore

CONSISTEL subsidiary OMGtel formally announced on Thursday that it was in the race to become Singapore's fourth telco. It thus joins fibre broadband services provider MyRepublic as the two companies which have formally announced their interest in becoming Singapore's new mobile phone services operator.

OMGtel has appointed the ex-president and CEO of Lenovo, Bill Amelio, as its new chief executive officer.

Masoud Bassiri, chairman of Consistel, said the company has already secured commitments of around S$400 million for the S$1 billion war chest that it is building before the spectrum auction takes place in the third quarter of this year. It has appointed OCBC Bank as its financial adviser.

The Consistel boss said funds would be raised from a combination of equity and term loans. He added that OMGtel was currently considering term-sheets from multiple sources which total up to S$400 million or 40 per cent of the amount of capital it is looking to raise. A term-sheet refers to a document which outlines the terms by which an investor will make a financial investment in a company.

Noting that the mission was to bring in exceptional technology for a telecommunications experience that is "second to none", Mr Bassiri said the company's aim is to be one of the top two telcos in Singapore. "We are not building a shadow network, instead we are building a superior network. This is not an investment for a 5-10 per cent market share," he added.

For OMGtel to be among the top two telcos in Singapore by market share, it would have to dislodge StarHub from its current position. When asked how his company would woo customers who could be locked into triple play services (mobile, broadband and cable TV), Mr Bassiri said the company had plans in place.

While he refused to reveal his company's pricing and product strategy, Mr Bassiri said: "We are not rookies in this business ... The challenge of getting customers to switch (from the incumbents) is something we have been looking at from the very beginning." He added that new machine-to-machine services will also unlock new demand for SIM cards and services.

Mr Bassiri noted that the company has a number of patents, many of which are registered in Singapore, which would help the company to create a differentiated network. "We have patents on how to ensure signals are available inside elevators and we have technology for high quality indoor coverage," he said. When pointed out that similar technology was being tried out by various companies in the Jurong Lake District area, Mr Bassiri said his company did not participate in the trials because "there was nothing for us to learn from the trial".

Mr Amelio noted that in telecommunications, issues like talk times, roaming charges, contract pricing plans and cost per gigabyte are "kind of historic ways at looking at these things. We are trying to introduce a new set of ways to look at telecom services".

George Yeo, Singapore's former foreign affairs minister, who sits on OMGtel's advisory board, was present at the event. He noted that Singapore does need a fourth telecom operator.