Singapore's 3G License Key for Asia-Wide Cell Network (Update1)
quote.bloomberg.com
By Linus Chua
Singapore, Oct. 20 (Bloomberg) -- Singapore's plan to give out 3G licenses to allow providers of mobile phone services offer high-speed Internet access would attract cell operators wanting to build Asia-wide networks.
The island is seen as a key market by operators such as Singapore Telecommunications Ltd. -- with investments in the Philippines and Thailand -- and Hong Kong's Pacific Century CyberWorks Ltd., which teamed up with Telstra Corp. in Australia for an Asian network. Singapore said it will give out four 3G licenses through an auction process in February.
``Anyone with regional aspirations will want to be involved as it's going to one of the markets on the forefront of 3G developments,'' said Neil Juggins, an analyst at Prudential-Bache Securities in Singapore. The auctions could raise up to $2 billion from the licenses, analysts said.
At stake for these operators are Singapore's four million residents, ranked the world's fifth richest by ACNielsen Media International, who constantly upgrade their phones for the latest technology. MobileOne Asia Pte., the island's No. 2 cell phone operator partly owned by CyberWorks, estimates its customers change their phones every nine months.
Other key markets include Hong Kong, Korea, Taiwan and Japan, where consumers can afford to pay for 3G services that let them download video and other large files on cell phones. These are also markets where more than six in 10 residents carry cell phones.
Operators
Existing Singapore operators Singapore Telecom, MobileOne and StarHub Pte. have said they want a license. Singapore Telecom, or SingTel, which last week said it wants to bid for 3G licenses in six Asian countries, expects to spend S$1.3 billion excluding license fees to build its 3G network in Singapore.
MobileOne, or M1, expects to invest between S$1 billion to S$1.5 billion on its network and is planning an initial share sale to finance it. StarHub, partly owned by British Telecommunications Plc and Japan's NTT Corp., already awarded a $300 million contract to Nokia Oyj, the No. 1 cell phone maker, to build its 3G network.
Other global players such as Deutsche Telekom AG and France Telecom SA, both with cell phone investments in Southeast Asia, are likely bidders as well, analysts say. The auction process also makes it easier for new players to enter the market as a selection based on merit may be a disadvantage for companies without a track record in a particular market.
Singapore's mobile phone market is estimated at S$2.5 billion, and could expand further with data services. Both SingTel and M1, for example, estimate data could make up as much as a quarter of their cell phone traffic in the next couple of years.
Some analysts also add that operators could use Singapore as a springboard into elsewhere in Southeast Asia such as Malaysia, Thailand and Indonesia, where they can replicate some of the services on the island elsewhere to save costs.
``Singapore is the first in the region and is a testing ground for their expansion into other markets,'' said Tjandra Kartika, an analyst at G.K. Goh Research Pte. in Singapore. |
