Singapore cuts $28M off 3G license reserve price

Singapore’s Infocomm Development Authority (IDA) has reduced the license reserve price for its upcoming 3G (third-generation) mobile auction by S$50 million (US$28.5 million), IDA said Friday.

In a statement, IDA said it reduced the reserve price from S$150 million to S$100 million in response to feedback from potential bidders. Four licenses are on offer in the auction that will be held in April or May.

A great deal has changed in the global telecoms industry since the price was originally set last year, and the assessment is that the market value of 3G licenses has dropped considerably, according to Yeo Cheow Tong, minister for communications and information technology.

High debt levels incurred by carriers paying high prices for licenses will in turn lead to higher financing costs. This may slow down the rollout of 3G networks and services, an outcome that is not in the consumers’ best interest, Yeo said.

In the statement outlining the final 3G auction rules, IDA said it would also delay the nationwide network rollout requirement by one year, from the end of 2003 to the end of 2004. This is in response to industry concerns over the delays in 3G-network and handset equipment availability, IDA said.

IDA will also monitor 3G market developments during the course of the year, with a view to assessing the availability of 3G-equipment and the ability of the early movers in Europe to meet their rollout requirement dates. IDA will review by the end of this year whether the rollout deadline needs to be further revised to allow 3G operators more time to achieve their network rollout, according to the statement.

The three existing mobile operators in Singapore: Singapore Telecommunications Ltd. (SingTel), Mobile One Asia Pte. Ltd. (M1), StarHub Pte. Ltd., and Hong Kong’s Sunday Communications Ltd. are to bid.

IDA can be contacted at at