Singapore to Award New Mobile Licenses
Even If Less Than 4 Bid
By Linus Chua
Singapore, Jan. 12 (Bloomberg) -- Singapore said it will not delay
further auctions of four high-speed mobile Internet access licenses later
this year even if there are fewer than four bidders.
Last week, the island postponed the auction of so-called
third-generation licenses to April or May from February because it said
companies wanted time to study the process. With interest in such
licenses waning, recent auctions in the Netherlands, Switzerland,
Poland and Austria raised less money than originally expected.
``If there are less than four bidders, we'll still proceed to issue the
licenses to the interested parties and award the remaining license or
licenses later when the demand is there,'' Yeo Cheow Tong,
Singapore's Minister of Communications and Information Technology,
said in parliament.
Any delay would hurt Singapore's plans to be one of the first in Asia to
roll out such services and lose potential revenue from the auction if
interest fades further, analysts said.
``I think they will leave the fourth license open to see if anyone is
interested,'' said Paul Cheong, an analyst at Merrill Lynch & Co. in
Singapore. ``It's quite unusual to have more licenses than incumbents.''
Having an auction with fewer bidders than permits, could also diminish
Singapore's image as an attractive telecommunications market after it
opened up its phone industry two years ahead of plan in April.
Singapore has three cell phone operators: Singapore
Telecommunications Ltd., MobileOne Asia Pte. and StarHub Pte.
Award by Merit
The discussion of the third-generation licenses came as Chng Hee Kok,
a member of parliament, said the government should award permits
based on the merits of plans proposed by phone companies rather
than just on price, making the licenses cheaper and more attractive.
Chng is also on the board of Pacific Century Regional Developments
Ltd., parent of Hong Kong's dominant phone company. Yeo rejected
the suggestion.
Chng's proposal reflects the hopes of Singapore's three mobile phone
operators. SingTel, MobileOne and StarHub said they preferred
awarding the licenses based on merit, a process commonly called a
beauty contest, to save costs. SingTel expects a network alone to cost
more than S$1 billion.
Yeo also rejected Chng's question on removing the minimum limit of
S$150 million ($86.5 million) for each license in the auction. ``An
auction will allocate the spectrum to the operators that value it most,
and this in turn will spur them to use this limited resource as efficiently
as possible.''
quote.bloomberg.com |
