Maintaining Telecommunications Service Standards when New Company Enters Market

Mr Baey Yam Keng asked the Minister for Communications and Information in light of SMRT's announcement that it will work with OMGTel to bid for Singapore's fourth wireless telecommunications carrier licence, how does the Ministry ensure that high telecommunication service standards are maintained if the partners of the licences do not have proven track records.

The Minister for Communications and Information (Assoc Prof Dr Yaacob Ibrahim): Mdm Speaker, IDA issued a public consultation in April last year, seeking views from the industry on potential interest to enter Singapore's mobile market. A new entrant would further spur competition in the mobile market, benefiting consumers through more attractive pricing and innovative services.

Should a new mobile operator be interested to enter the Singapore market, they will need to take part in a spectrum auction. IDA has yet to determine the rules for the next spectrum auction. Nonetheless, in previous auctions, IDA has stipulated qualifying criteria, which includes the requirement for applicants to have strong technical capabilities and financial positions. This is to ensure that only serious and capable players participate in the spectrum auction. Any new mobile operator will also have to comply with IDA's regulatory obligations, including its Quality of Service frameworks.

Mr Baey Yam Keng (Tampines): I thank the Minister for the answer. I would like to ask: going back to the time when the Singapore telco industry was liberalised, the partners in M1 and StarHub did not necessarily have technical backgrounds in the telecoms sector. So, does the same rule apply then and now, in this new licence? I would appreciate it if the Minister could shed more light.

Assoc Prof Dr Yaacob Ibrahim: Madam, we have to see how the market has evolved and the experience that we have gained. For example, when we invited new entrants for the 2013 4G spectrum auction, we had a pre-qualification phase where we ask the participants to declare their capital structure, financial proposal, technical capabilities and the proposed 4G systems and services, amongst others. Through these criteria, we pre-qualified them and then invited those pre-qualified to tender for the spectrum. We are likely to put in similar criteria for the next spectrum auction.

Mr Zaqy Mohamad (Chua Chu Kang): I just want to ask a couple of questions. One, in terms of evaluation -- what is proportion in terms of the tender price as well as the innovations that we can expect from such bidders? The bidding should not just be based on price considerations, I suppose, because that would also increase price. With the increased competition, what is the Ministry's long-term strategy to enhance the telco users experience here in Singapore?

Assoc Prof Dr Yaacob Ibrahim: That is exactly the intention, Mdm Speaker. We do have a variety of criteria. I am not at liberty to declare the proportion at which our regulators will decide, but certainly we take into account not only pricing but the ability to innovate.

To the Member's second point, clearly we believe that there is space for a fourth telco but we just do not want another telco. We want a telco that can bring innovation to the market, and therefore, cause the existing incumbents to also innovate. We want to spur competition. Certainly, we will bear all these factors in mind to ensure that it will spur growth to benefit the consumers.

Mdm Speaker: Mr Cristopher de Souza.

Mr Christopher de Souza (Holland-Bukit Timah): I think there might be a Question 10 before my Question, Mdm Speaker.

Mdm Speaker: My apologies. Mr Baey Yam Keng.