Singapore Min Expects Rational Bids In 3G License Auction

date: 13th January 2001

Participating telecommunications operators are expected to "bid rationally" for Singapore's third-generation, or 3G, mobile spectrum licenses after some earlier expensive auctions in Europe, said Senior Minister of State for Communications and Information Technology John Chen in parliament Friday.

"Notwithstanding the large sums that have been collected in some earlier European 3G auctions, we expect that the participating telecom companies will have learnt from the earlier 3G auctions," he said.

Chen made the statements in response to a lawmaker's question on whether the government would consider adopting a beauty contest as the method to award the licenses in Singapore.

Singapore recently postponed the auction for up to four 3G licenses to the second quarter from February. The auction is now expected to take place in April or May.

Chen said the government has "carefully considered" the pros and cons of the auction approach vis-a-vis a beauty contest for awarding 3G licenses.

"Our conclusion was that the award of the 3G licenses through an auction is the most objective, efficient and transparent means of allocating the limited spectrum available," he said.

"An auction will allocate the spectrum to the operators who value it most, and this in turn would spur them to use this limited resource as efficiently as possible," he added.

While several other countries have chosen the beauty contest method for selecting 3G operators, "our assessment is that making a judgment amongst bidders for emerging technologies such as 3G is entirely subjective, as it is still uncertain what would be the key 3G services," he said.

"It would be very difficult for the regulator to define the service and technical criteria for evaluating proposals in a beauty contest," he added.

Although operators will "naturally prefer" a beauty contest mechanism, "the government has a responsibility to obtain fair value for a scarce resource," he said.

"The government's main objective is to ensure a transparent and fair allocation mechanism, and not simply to generate revenue," Chen said.

The Singapore government has set a floor price of S$150 million ($1=S$1.7353) for the auction of each 3G license.

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