S'pore to auction 3G licenses

S'pore to auction 3G licenses

SINGAPORE (Dow Jones): Singapore will issue up to four third- generation mobile licenses through an auction that will be held in February 2001, the Infocomm Development Authority of Singapore said Friday.

The number of licenses to be issued is within market expectations, but the method isn't. Analysts had expected Singapore to use a combination of an auction and a beauty contest to determine the winners.

The government said it decided to use only the auction method in which the bidders will determine the cost of the 3G spectrum as it allows the market to allocate scarce spectrum to the highest bidder.

The government also set the initial bidding price at S$150 million (US$85 million), the IDA said.

Tjandra Kartika, a telecommunications analyst at G.K. Goh Securities in Singapore, said he was surprised that the IDA is using the bidding process to issue the licenses and said the process will "make it more expensive" for the companies bidding.

The third generation mobile phone technology allows the convergence of voice, video and data onto one platform.

Singapore has about two million mobile phone users in a population of about 4 million.

Analysts said they also expect at least three of the licenses will go to the three incumbent mobile phone operators, while the fourth may either go to a foreign company or a new local operator.

Singapore Telecommunications Ltd., MobileOne Pte. Ltd. and StarHub Pte Ltd. are the three local companies that offer mobile phone services in Singapore.

MobileOne's shareholders include Keppel Telecommunications & Transportation Ltd., Singapore Press Holdings Ltd. and Pacific Century CyberWorks Ltd..

StarHub, the latest entrant, counts government-controlled Singapore Technologies Ltd., Singapore Power Ltd., Nippon Telephone & Telegraph Ltd. (NTT) and British Telecommunications PLC among its shareholders.