Rules may change for unsold 3G licences, says IDA

date: 23rd January 2001, source: http://www.straitstimes.com.sg/

THIRD-GENERATION (3G) mobile phone licences that are not snapped up by bidders in the upcoming auction may be handed out at a later stage using 'any methodology deemed appropriate', said the Infocomm Development Authority of Singapore (IDA) yesterday.

It also reserved the right at this stage to make changes to the reserve price of $150 million.

In releasing details of its long-awaited 3G licensing framework and auction rules, the IDA said last night that it would issue 'up to four 3G licences in this coming auction'.

'In the event that not all of the four licences are awarded in this auction, IDA reserves the right to auction the remaining licence, or licences, at any time,' it said.

Responding to queries from The Straits Times regarding how such unsold licences would be allocated, IDA spokesman Dulcie Chan said: 'In the event that not all of the four 3G licences are awarded in this auction, IDA reserves the right to issue the remaining licences using any methodology deemed appropriate, including auction.

'IDA also reserves the right to review the reserve price, based on the fair market valuation at that point in time.'

Industry players contacted last night wondered about the impact of the latest announcement on the upcoming auction.

Said one industry watcher: 'It means that if you are a new entrant, you might want to sit out this first round of auction...because being first may not be advantageous.'

The IDA announcement also referred to the critical access to the present (second generation or 2G) networks by the new 3G licensees and said that it would set a deadline for agreement between the operators.

'IDA has established a 90-day deadline for the negotiating parties to reach a voluntary agreement, after which IDA will intervene to help establish a roaming agreement between the new 3G licensee and any one 2G incumbent operator,' the IDA said in its statement.

It would also determine both 'price and non-price terms and conditions' if such talks break down.

This, said some industry watchers, would help to ease what could turn out to be difficult and lengthy commercial negotiations between rival operators.

'At the end of the day, the IDA should ensure that consumers benefit.

'And if they have to step in to make sure that operators provide seamless services, then they should,' said one industry pundit.

This view was shared by IDA chief executive Yong Ying-I.

She said in a statement yesterday: 'This auction has been structured to allow maximum industry participation in determining the future of 3G in Singapore.'

For example, she noted that successful bidders would be free to 'implement any technology standard they feel is appropriate, may form partnerships and alliances as they require, and may resell spectrum as business conditions dictate'.

This was because there were 'wide-ranging views on what a profitable 3G business model is likely to be'.

As a result, Ms Yong said that she was 'confident this will result in high quality and cost-effective 3G services in Singapore'.

Among some of the other conditions laid down were that 3G bidders had to meet three pre-qualification criteria which will require them to demonstrate their financial capability, technical capability and shareholding structure.

As for successful 3G bidders, the IDA said that they would be required to roll out a nation-wide network by Dec 31, 2003.

The IDA is inviting industry feedback on its draft 3G auction rules and said that such comments should reach it by 6 pm on Feb 12.

It will then issue its final bid package by March 5.

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