UPDATE 1-Singapore cuts 3G licence minimum bid to S$100 mln
March 8, 2001 6:16am
Source: Reuters
(Adds details, background)
By Jacqueline Wong
SINGAPORE, March 8 (Reuters) - Singapore said on Thursday it cut the minimum bid for third generation (3G) telecom licences from S$150 million ($85.35 million) to S$100 million for its auction in April to reflect a weaker market.
``We have reviewed it and recognised that market conditions have changed,'' Communications and Information Technology Minister Yeo Cheow Tong told parliament. ``We have lowered it to S$100 million.''
The auction will proceed as scheduled in late April, Yeo confirmed.
He did not say when the bidding guidelines would be released. Yeo told reporters on Wednesday the government hoped to ``finalise the terms and conditions before the end of this week.''
A spokeswoman for the Infocomm Development Authority (IDA) declined to comment on the release date.
The IDA, which intends to offer up to four 3G licences valid for 20 years, postponed Monday's expected release of the auction rules. The auction itself was delayed from February to April.
Yeo said Singapore also took into account the ratings downgrades some telecoms companies had suffered over high prices paid for 3G licences in Europe.
The deadline for a nationwide rollout of 3G services -- which allow for fast data and voice transmission on mobile phones and sophisticated applications such as downloads of streaming video and CD-quality music -- is December 31, 2003.
Telecoms analysts said bidding is likely to be subdued after a lukewarm response to several recent European auctions. Some had expected the government to sweeten the terms or trim the minimum bid to woo players.
Japan Telecom's delay of the full launch of its 3G service until October 2002 was also a harbinger for Singapore.
Yeo said upfront charges would be an incentive for operators to bring the technology to market quickly to recoup costs.
But the government also recognised it was lowering the risk to operators by lowering upfront charges but that the savings would not necessarily be passed on to consumers.
Local operators Singapore Telecommunications, MobileOne (M1) and StarHub, as well as Hong Kong's Sunday Communications, have said they would bid for a licence.
M1's shareholders include Keppel Telecommunications & Transportation Ltd, Singapore Press Holdings, Britain's Cable & Wireless and Hong Kong's Pacific Century CyberWorks.
Starhub Pte Ltd is a consortium comprising Singapore Technologies Telemedia, British Telecommunications Plc and Japan's Nippon Telegraph and Telephone Corp. ^ REUTERS@
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