The Infocomm Development Authority of Singapore (IDA) has updated its spectrum allocation policy framework and adopted the auction methodology as the mechanism to allocate spectrum...
Singapore, 27 July 2001 | For Immediate Release
The Infocomm Development Authority of Singapore (IDA) has updated its spectrum allocation policy framework and adopted the auction methodology as the mechanism to allocate spectrum. This revision takes into account that spectrum is a scarce and finite resource and that a market-based allocation approach, such as auction, is more effective in ensuring spectrum optimization by operators. An auction is an efficient, objective and transparent mechanism for assigning a scarce resource to those who value it the most.
Spectrum has traditionally been allocated on an administrative basis and charged on a cost-plus recovery pricing approach. With rapid technological changes in the industry, there will be competing demands from new operators and new services being offered. Given these competing demands, the traditional administrative allocation approach is ineffective in ensuring efficient use of spectrum. As such, IDA had revised the spectrum allocation policy framework, and adopted an objective and market-based approach that recognizes the fundamental scarcity of spectrum. IDA has already used this market-based approach to allocate 3G spectrum.
Future Spectrum Allocation - LMDS and 2G
Spectrum for Local Multipoint Distribution Services (LMDS)1 and additional spectrum for Second Generation (2G) mobile services2 will also be allocated via auction. Successful bidders for LMDS and additional 2G spectrum will be awarded seven-year spectrum rights. The outcome of these auctions will set the base year price3 payable for each of the spectrum blocks auctioned. This base year price will be increased by a factor of 2.5% annually for the remaining period of the spectrum rights.
IDA has released the revised rules for the 2G Spectrum Rights auction to the three mobile phone operators who are the parties eligible to participate in this auction4. Six 2G spectrum lots will be offered for auction, at the auction reserve price of $120,000 per spectrum lot. The outcome of the auction will set the base year price. Each spectrum lot is a generic 2X5MHz GSM 1800 spectrum block, and each auction participant will be allowed to bid for a maximum of three spectrum lots. The outcome of the 2G spectrum auction will also be applied to existing 2G spectrum held by the three mobile phone operators from next year. This revised policy recognizes that all spectrum resources are valuable and hence, the need to ensure optimal usage by operators. The 2G spectrum auction remains on schedule for September 2001.
The LMDS spectrum auction will be held in the third quarter. IDA will release the documentation for the LMDS auction in August 2001. All interested parties will be given time to seek clarification on the rules and to submit their bids shortly after. The auction is targeted for late September 2001.
ISSUED BY CORPORATE COMMUNICATION DIVISION
INFOCOMM DEVELOPMENT AUTHORITY OF SINGAPORE
Notes to Editor:
1. Local Multipoint Distribution Service (LMDS) is a broadband wireless point-to-multipoint communication system that provides digital two-way voice, data, Internet, and video services. It is also used to offer Integrated Services Digital Network (ISDN) and leased circuits. LMDS operates typically in the 24-31 GHz bands, although some countries have allocated higher frequencies.
2. LMDS systems use a cellular-like network architecture similar to mobile networks. The difference is that in a LMDS network, bandwidth is delivered from a base station to buildings, not moving subscribers. Aside from being a broadband wireless technology in the access segment, LMDS is also applicable for mobile communications backhaul, i.e. mobile phone operators can leverage LMDS' cellular architecture to backhaul traffic between mobile base stations and the mobile core network in a cost effective manner.
IDA had earlier announced its intention to assign remaining 2G spectrum, via an auction approach. Only the existing three mobile phone operators are eligible to participate in this auction. The additional spectrum is to cater for expansion of the mobile licensees' current operations enhancement of the range and quality of services offered.
3. The Base Year Charge refers to the annual charge payable in the first year of the seven year duration of each 2G Spectrum Right, in respect of each 2G Spectrum Lot awarded pursuant to the Auction, excluding the applicable Goods and Services Tax (GST).
4. Information Memorandum for the 2G Mobile Spectrum Rights auction.
About Infocomm Development Authority of Singapore
The Infocomm Development Authority of Singapore (IDA) is a dynamic organisation with an integrated perspective to developing, promoting and regulating info-communications in Singapore. In the fast-changing and converging spheres of telecommunications, information and media technologies, IDA will be the catalyst for change and growth in Singapore's evolution into a vibrant global info-communications technology centre. For more information, please visit www.imda.gov.sg.
For media clarification, please contact:
Ms Dulcie Chan
Manager, Corporate Communication
Tel: (65) 211-1999
Fax: (65) 211-2227