Fine on Sports Hub licensee raises questions about fourth telco

IT remains to be seen if the recent S$300,000 fine on, and police report lodged against, Consistel (Singapore) for breach of its licensing obligations with regard to the wireless network it runs at the Singapore Sports Hub would affect plans to have a fourth mobile telco operator in Singapore.

Consistel (Singapore) was found to have tried to transfer ownership of the licence to a sister company, Consistel (Sprint), without prior approval from the Infocomm Development Authority of Singapore (IDA). Sprint is owned by Consistel Singapore's parent, Consistel, and a business partner, Asia Networks. Another entity within the Consistel stable, OMGtel, has emerged as a contender, along with local broadband services provider MyRepublic, to become the new telco in Singapore.

Ever since IDA announced last year that it has decided to set aside 60 megahertz, at a reserve price of S$35 million, for a fourth operator during its spectrum auction later this year, there has been a buzz about how this would shake things up in the Singapore mobile phone industry. Anticipation has built up that a new operator could disrupt the industry and offer new price plans, services and discounts, mirroring what has happened in the fixed line broadband market with the entry of new players. IDA's spectrum pricing is attractive, considering that it is setting aside a generous amount. If there is more than one contender, there will be an auction and this can raise the reserve price. As a caveat, it should be noted that building a top-class network that meets IDA's stringent quality of service (QoS) standards is easier said than done. As Nomura said in a research note recently, rolling out a new network will not be easy nor economical. Consistel has said it plans to raise S$1 billion for building the network while MyRepublic has set aside a more modest S$250 million.