Singapore slashes auction reserve price for 3G licenses

Asian Economic News, March 12, 2001

SINGAPORE, March 8 Kyodo

The Singapore government announced Thursday it has slashed the reserve price for the auction of 3rd-generation (3G) mobile phone licenses to S$100 million (US$57 million) from S$150 million due to the weaker global telecom industry.

Singapore Communications and Information Technology Minister Yeo Cheow Tong told parliament that ''market sentiment has weakened considerably, and there is greater uncertainty over the business case for 3G.''

''The assessment is that the market value of 3G licenses has dropped considerably.''

He said high 3G license costs in some recent European auctions have led to the downgrading of the debt ratings of many large players in the industry.

In a statement, the Info-Comm Development Authority of Singapore (IDA), which comes under Yeo's Ministry, said the government will also delay the deadline for the nationwide rollout of 3G infrastructure by one year to December 2004.

It said the delay is to meet the concerns about the global trend of delays in 3G network rollouts and also the availability of handsets.

The adjustments ''will facilitate the successful rollout of 3G services, which is strategic to Singapore's ambitions to be an Asian leader in mobile communications,'' IDA said.

The auction is to take place April 23. Four 3G licenses are expected to be issued at the auction. The licenses that are not taken up will not be offered for sale again during the next 12 months. The IDA will also maintain the reserve price of S$100 million until January 2006.

3G systems promise global roaming using 3G standards, which also support multimedia applications.

With the advent of 3G, mobile devices will become more than just a telephone by incorporating voice, video, data downloads and Internet access.