Licences for 3G may be granted in stages

date: 15th January 2001

Singapore could stagger the award of licences for third-generation (3G) telecommunication services if its auction of spectrum fails to attract four bidders.

Yeo Cheow Tong, Minister for Communications and Information Technology, said he remained confident the competitive bidding process would be successful, but said the licences could be handed out in stages.

Mr Yeo's comments follow Singapore's recent decision to delay its 3G auction for four parcels of spectrum by two months, with bidding now expected in April or May.

The postponement fuelled speculation that as leading telecommunication companies may have overpaid to secure 3G licences in Europe, their appetite and financial ability to buy their way into markets elsewhere could be diminished.

In response to questions from members of parliament, Mr Yeo said: "We are going to be offering four licences for auction. And if there are less than four bidders, we will still proceed with the auction, and award the other licence or licences later, when the demand is there."

The minister did not clarify how the auction would be restructured if there were fewer bidders than the four parcels of spectrum lined up for sale last October.

"We believe that what has happened elsewhere should not have any impact in Singapore because we are obviously proceeding with the roll-out of 3G," Mr Yeo said.

"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 their earlier 3G auctions, and bid rationally in our auction."

The suggestion that fewer than four bidders may come forward stands in sharp contrast to Mr Yeo's comments just days before, that industry players remained keen to grab a slice of the 3G market in the city-state.

"We think that there will be at least four bidders, and from the interest there's a possibility there may be a few more participating," he said on January 9.

Singapore's telecom regulator and auction organiser, the Infocomm Development Authority, has said that the postponement of two months would allow it to fine-tune its auction rules in the light of feedback from the industry.

The new technology enables mobile-phone users to access the Internet, as well as carrying conventional voice data.

Although the subject of intense industry hype, the commercial viability of the new services remains untested.

Elsewhere, Malaysia's communications minister, Leo Moggie, said Kuala Lumpur would decide by the end of the year which companies would be allowed to operate 3G licences.

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