Singapore has a fourth mobile operator – and it’s TPG Telecom, who successfully bid S$105 million ($73 million) for a 4G license in the IMDA’s New Entrant Spectrum Auction (NESA) on Wednesday.
Under the license, TPG gets 60 MHz of spectrum (20 MHz in the 900-MHz band and 40 MHz in the 2.3-GHz band) to offer LTE and LTE-A services.
TPG Telecom, fiber broadband player MyRepublic and airYotta applied for the auction in September this year, but airYotta’s application didn’t make the final cut, leaving TPG and MyRepublic to compete for the license in mid-November.
TPG’s winning bid of S$105 million is way over the IMDA’s reserve price of S$35 million. MyRepublic went as high as $102.5 million before dropping out, explaining in a Facebook post that it couldn’t justify the cost given Singapore’s highly competitive mobile market:
It was after serious consideration that we decided that bidding $105M and beyond for the spectrum did not support our vision and business case for mobility in Singapore.
At the current spectrum price, we believe that a new entrant must achieve a much higher market share (compared to our own target of 9%) to survive and be successful. This creates a risk that does not make sense to us, considering the economics of the Singapore market.
Techgoondu reports that TPG Telecom surprised observers by bidding as high as it did:
One commented that it might be better off spending that money buying off M1, Singapore’s smallest telco, instead of getting saddled with debt at the start.
According to TPG, its Singapore business will be funded from existing debt facilities and cash generated from Australian operations.
According to the IMDA, TPG is required under its new license to provide nationwide street level coverage for 4G within 18 months from the start of the new spectrum rights in April next year. It has 30 months from that time to provide road tunnels and in-building service coverage, and 54 months to cover MRT underground stations/lines.
Meanwhile, the IMDA is moving on to a new general spectrum auction in the first quarter of 2017, which will be open to existing mobile operators Singtel, M1and StarHub, as well as TPG.