AWSJ: 3G Build Out Costs Falling -Singapore Mobile Execs
This item originally ran at 1315 GMT Tuesday
By H. Asher Bolande
Of THE ASIAN WALL STREET JOURNAL
SINGAPORE -- The cost of building third-generation mobile phone networks will be lower than forecast several months ago because existing equipment can be upgraded, the chief executives at Singapore's two largest cellular providers said Tuesday.
SingTel Mobile - a unit of Singapore Telecommunications Ltd. - previously predicted it would spend approximately S$1 billion on its 3G network over 10 to 15 years, SingTel Mobile Chief Executive Lucas Chow told The Asian Wall Street Journal.
"But recently when we reassessed the situation, prices have come down," he said. "One can expect there will be some reductions in terms of 3G" capital expenditure, he said, without specifying the extent of the reductions.
In a separate interview, Neil Montefiore, the chief executive of Singapore's number-two wireless carrier, MobileOne Ltd., echoed the remarks, saying that cost estimates had come down substantially over the last 12-18 months.
Both executives said while it was previously assumed operators would have to build the 3G networks from scratch, some base station equipment used for today's second-generation phone networks is 3G-ready and can be upgraded relatively cheaply.
"All we need to do to get 3G footprint is put the wideband CDMA modules in," said Montefiore, referring to the standard for 3G that his company will employ. "(New) operators will incur costs maybe twice that of an incumbent," he said, adding that competition between equipment vendors has also led to lower prices.
Designed to transmit data at high speed, 3G networks are expected to give users the ability to tap into online services like CD-quality music downloads and multiplayer games while on the go. But the high price tag associated with 3G spectrum licenses and network construction has soured investors on the technology's business case in the last several months.
Montefiore declined to comment on a possible change of MobileOne's ownership, saying: "At the moment it's business as usual." However, he said he thought the issue should be fully resolved in "a month or two."
MobileOne's four corporate shareholders recently announced they were seeking a buyer for the company. They are Keppel Telecommunications & Transportations Ltd., Singapore Press Holdings Ltd., Britain's Cable & Wireless PLC and Hong Kong's Pacific Century CyberWorks Ltd.
The Regional Wireless Co., a new joint venture between Australia's Telstra Corp. and PCCW, has expressed interest in bidding. Other possible bidders include European giant Vodafone PLC and Norway's biggest telecom company, Telenor AS.
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