Analysts upbeat about S'pore's 3G aution

date: 24th January 2001, source: Yahoo

Analysts are optimistic that there will be at least four bidders for Singapore's auction of third generation or 3G mobile phone licences.

This is after the InfoComm Development Authority released the licensing framework and auction rules for the licences on late Monday night.

Among the rules, IDA has reserved the right to issue the remaining licences if the four licences being offered are not all taken up.

In an interview with Channel NewsAsia, Tjandra Kartika, Vice-President of G K Goh Research, gave an insight on why analysts are confident that the impending 3G auction would attract at least four bidders. Mr Kartika said:

"To certain extent, it also depends on the structure of M1 because M1's current shareholding is 30 percent held by PCCW which has a joint venture with Telstra. If as the rumours say, if it's true that Orange does come into M1, then that frees Telstra and PCCW/Hutchison to bid separately for licence in Singapore. That will mean we will at least have five bidders for the licences in Singapore."

On the possibility of telcos adopting a wait-and-see approach in the event that not all the four licences are auctioned off, Mr Kartika added:

"Waiting for the second round means that they will already lose some time to those that already got the licence and have started to roll out their networks.

And as we know, the cellular industry's moving very fast and people would like to be the first provider of 3G services rather than the last provider."

When asked about what he thought of IDA stepping in if the telcos cannot reach an agreement on the negotiations for the new licencees to roam onto the existing 2G networks, what that signals about the negotiations going forward, and whether the negotiations would be difficult, Mr Kartika said:

"And yet we have not finalized the general interconnection agreement. And that highlighted the main problem again with negotiating each of the players -- like what they outlined in the 3G licences. Whoever the fourth player is will have the most difficulty negotiating with the three existing players because the three of them currently already have the general interconnection agreement.

"The fact that IDA will step in after 90 days will give some comfort that there will be at least some mediator in the general and tariff interconnections. But there will still be a problem of time -- when they are going to be able to finalize and conclude all the deals -- first 90 days and secondly, after the intervention from IDA, they'll still take some few months before they conclude."

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