Australian telco TPG has submitted the winning bid for mobile spectrum in Singapore setting it up to be the nation's fourth mobile telecommunications operator. TPG beat Singapore ISP MyRepublic, which has just entered the Australian Internet market and which was the only other bidder for the spectrum.
TPG's win was announced by the Info-communications Media Development Authority (IMDA) in a statement saying: 'TPG made the winning bid of $S105 million [$US73.1m], and will be provisionally allocated 60MHz of spectrum made available in the New Entrant Spectrum Auction (NESA) comprising 20MHz in the 900MHz spectrum band and 40MHz in the 2.3GHz spectrum band to provide International Mobile Telecommunications (IMT) and IMT-Advanced services (eg 4G services).' The new spectrum rights are expected to commence on 1 April 2017 at the earliest.
To facilitate the entry of a new mobile network operator, IMDA had set aside 60MHz of spectrum that incumbent operators were prohibited from bidding for. IMDA plans to stage a General Spectrum Auction (GSA), which will be open to the existing operators '“ M1, Singtel Mobile and StarHub Mobile '” in the first quarter of 2017. TPG will be able to bid in that auction also.
TPG will be required to use its spectrum to provide nationwide street level coverage for 4G within 18 months from the start of the new spectrum rights; road tunnels and in-building service coverage within 30 months from the start of the new spectrum rights; and coverage for MRT underground stations/lines within 54 months from the start of the new spectrum rights.
TPG said its win represented 'a rare opportunity that would enable TPG to establish a long-term business in Singapore bringing tremendous value to Singapore consumers whilst generating excellent long-term returns for TPG shareholders.'
TPG is required to pay the full $S105m within 20 days. Announcing its win to the Australian Stock Exchange the company said it expected to incur capital investment in the range of $S200m to $S300m ($US139m - $US208m) to establish a nationwide mobile network by September 2018.
It said the win represented 'a rare opportunity that would enable TPG to establish a long-term business in Singapore bringing tremendous value to Singapore consumers whilst generating excellent long-term returns for TPG shareholders,' and the network would be funded from existing debt facilities and cash generated from Australian operations.
The company said it expected to start delivering services to customers in 2018 and forecast that it would become EBITDA positive when it reached a market share of between five percent and six percent, which it said 'should be achievable within a short period of time due to the excellent value of the offerings that [we] will bring to the market.'
