Singapore decides framework for allocation of 235 MHz of additional spectrum and encourages 4th MNO

On the 18 February 2016, Singapore’s Infocomm Development Agency (IDApublished its decision on the framework for the allocation of an additional 235 MHz of spectrum. This follows their earlier consultations. Key points are set out below:

Two stage process to encourage market entry by new entrant (4th MNO)

The IDA wants to encourage market entry by a fourth mobile network operator (MNO), so has split the auction into two stages. First, a ‘new entrant’ spectrum auction for 60 MHz (comprising 2x 10 MHz in the 700 band, 2 x 10 MHz in the 900 MHz band and 20Mhz of the 2.3 GHz TDD band ) from which the existing MNOs are excluded, followed by a second auction of the remainder of the spectrum to the incumbent MNOs and new entrant (if any). The reserve price for the new entrant spectrum has been lowered from SGD 40 million to SGD 30 million. The process has been designed to limit market entry to only one additional MNO.

New entrant needs to pre-qualify

Any new entrant needs to pre-qualify for the auction. To pre-qualify a bidder must:

  • be an incorporated company;
  • not have rolled out or own any nationwide mobile system or network in Singapore; and
  • not be an associate of any incumbent MNO and/or of another qualified potential new entrant bidder.

The last condition means that any consortia will need to be formed prior to qualification for bidding.

In addition, pre-qualification will also require bidders to demonstrate:

  • their technical capabilities; and
  • financial capacity, including a bank guarantee and performance bond.

No other material regulatory assistance for new entrant

Apart from the spectrum allocation and price, there is no other regulatory assistance for the new entrant. The IDA has decided not to mandate wholesale roaming access for the new entrant, and is not proposing to relax any regulatory obligations.

Auction processes defined

The new entrant auction will be a simple ascending round auction, and the second auction a more complex ‘Clock Plus’ format.

Next steps

The IDA will make available a an information package for potential new entrants which will be available on 3 March. The IDA will issue further auction documents setting out more detail.

Singapore reserves spectrum for new entrant in 2013 4G auction

Following last year’s consultation, Singapore’s regulator announced on 16 January that  it would be auctioning 270 MHz of spectrum for 4G, comprising 150 MHz of spectrum in the 1800 MHz band and 120 MHz of spectrum in the 2.5 GHz band. The auction will be held in the middle of 2013, with licences taking effect on 1 July 2015 for spectrum in the 2.5 GHz band and 1 April 2017 for spectrum in the 1800 MHz band.

The IDA has decided to set aside 40 MHz of the spectrum in the 2.5 GHz band4 for any new mobile operator that wishes to enter the market, but will include this ‘set-aside’ amount in the main auction if there is no new entrant.

The key points to note are:

Spectrum for allocation and allocation approach

IDA will allocate the following spectrum via auction:

Spectrum band 1800 MHz 2.5 GHz
Amount to be allocated (MHz) 150 (2×75 MHz paired) 120* (2 x 60 MHz paired)* including 2 x 20 MHz set aside for a new entrant, which will be committed to the main auction should a new entrant not emerge.
Reserved (MHz) 70 (2 x 10 MHz paired and 50 MHz unpaired)

Reserve prices

The total reserve price for all the spectrum in the 1800 MHz and 2.5 GHz to be auctioned in this round amounts to S$360 million.

The reserve price is S$16 million per 2 x 5 MHz lot for the 1800 MHz band and S$10 million per 2 x 5 MHz lot for the 2.5 GHz band. Successful bidders will also be required to pay an annual spectrum management fee of S$26,400 per 2 x 5 MHz spectrum lot per year, and a one-time application and processing fee of S$5,400 per 2 x 5 MHz spectrum lot.

Commencement and duration of spectrum rights

Spectrum band 1800 MHz 2.5 GHz
Date of expiry 30 June 2030 30 June 2030
Spectrum right duration ≈ 13 years 15 years

Nationwide coverage requirements

  Nationwide coverage requirements (except MRT underground stations/lines and road tunnels) Coverage requirements for MRT underground stations/lines and road tunnels
Bidders which have been allocated at least 2 x 15 MHz of spectrum in the 2.5 GHz bands by 30 June 2016
(i.e., 12 months after the commencement of new spectrum rights in the 2.5 GHz
by 30 June 2018
(i.e., 36 months after the commencement of new spectrum rights in the 2.5 GHz band)
Bidders which have been allocated any other combination of spectrum in the 1800 MHz band and/or the 2.5 GHz band(E.g., spectrum in the 1800 MHz band only; or less than 2 x 15 MHz of spectrum in the 2.5 GHz band) by 31 March 2018
(i.e., 12 months after the commencement of new spectrum rights in the 1800 MHz band)
by 31 March 20201
(i.e., 36 months after the commencement of new spectrum rights in the 1800 MHz band)
New entrant acquiring ‘setaside’ spectrum by 30 June 2018
(i.e., 36 months after the commencement of new spectrum rights in the 2.5 GHz band)
by 30 June 2020
(i.e., 60 months after the commencement of new spectrum rights in the 2.5 GHz band)

1 This date has been corrected from 30 June 2020 as stated in the Consultation paper.

Spectrum caps

IDA will set an overall spectrum cap (2 x 55 MHz) and sub-cap for spectrum in the 1800 MHz band (2 x 30 MHz).

Schedule

Milestone Tentative timeframe
Issuance of draft Information Memorandum and Auction Rules and submission of written queries March/April 2013
Issuance of final Information Memorandum and Auction Rules April/May 2013
Binding Expression of Interest by New Entrant May/June 2013
Allocation of ‘set-aside’ spectrum to New Entrant (if any) May/June 2013
Submission of Initial Offer and Bank Guarantee for Main Auction May/June 2013
Announcement of whether Auction will proceed To be announced

Singapore IDA contemplates reserving spectrum for new entrant as it consults on 4G auctions

In a consultation published earlier this week, Singapore’s Info-Communications Development Agency (or IDA) published a consultation on auctioning and reserving spectrum in Singapore for 4G (LTE or WiMAX) use in the in 1800 MHz, 2.3 GHz and 2.5GHz bands. (As an aside, the 2.5GHz band from 2500 MHz to 2690MHz is also described as the 2.6 GHz range by some European regulators).

Although there is no definitive commitment to set aside spectrum for a new entrant, the IDA consultation indicates that it is prepared to reserve 2 x 20MHz in the 2.5 Ghz band for new entrants only, coupled with a relaxation of the national coverage timetable to the extent there is genuine interest from a credible new entrant. Any interested parties should respond to the consultation indicating their interest.

Key points of the consultation proposals are:

Spectrum to be auctioned / reserved

  • 2 x 70MHz paired spectrum in 1800Mhz band;
  • 30 MHz in the 2.3 GHz band; and
  • 2 x 60 MHz paired spectrum and 30MHz unpaired spectrum in the 2.5 GHz band.

In addition, spectrum will also be reserved for future allocation as follows:

  • 2 x 5 MHz paired spectrum in 1800Mhz band;
  • 20 MHz in the 2.3 GHz band; and
  • 2 x 10 MHz paired spectrum and 20MHz unpaired spectrum in the 2.5 GHz band.

The proposal is that the spectrum would be auctioned/ reserved in 10MHz blocks.

Licence conditions

The consultation proposes that licensees will be required to offer commercially available 4G services to retail end-users in Singapore. This obligation is a national obligation, although as Singapore is effectively a city-state this is rather less onerous than in other jurisdictions, although interestingly licensees holding more than 30MHz in the 2.3 or 2.5 GHz bands will be required to provide coverage in underground MRT stations / lines and road tunnels by 2018.

Auction format

The IDA is proposing to allocate spectrum by auction, using a “Clock-Plus” auction similar to those used in Sweden and India. Each of the bands will be a separate category with generic lots of 10 MHz.

In order to balance the conflicting requirements of giving operators as much spectrum as they would ideally like with the IDA’s need to have genuine competition to maximise long-term consumer welfare, the IDA is proposing an aggregate cap of 2 x 45 MHz paired spectrum (with no cap on unpaired spectrum).

The licences auctioned will run until 30 June 2030.

Next steps

Comments are due with the IDA by 8 May

UK delays 800 MHz and 2.6 GHz spectrum auctions until late 2012

On 7 October Ofcom announced that the already much delayed 800 MHz and 2.6 GHz Uk spectrum auctions would be delayed. This follows on from prior delays, but follows responses to Ofcom’s prior consultation that clearly raised significant issues.

The next stage will be a further consultation by the end of the year with a decision from Ofcom in summer 2012 and auctions to take place at the end of the year.

Ofcom start consultation on technical licence conditions for 800 MHz and 2.6 GHz spectrum auctions

Ofcom today published a consultation on technical licence conditions for 800 MHz and 2.6 GHz UK spectrum auctions, due to take place in 2012. This follows their earlier general consultation on the auctions. Responses are due by 28 July.

Ofcom is consulting in parallel on specific additional technical restrictions that may be needed for co-existence of new services in the 800 MHz band with adjacent DTT use in bands below 790 MHz.

The diagram below (taken from the Ofcom document) shows the harmonised frequency arrangement for the 800 MHz band (per  Commission Decision 2010/267/EU) of 2 x 30 MHz with a duplex gap of 11 MHz, based on a block size of 5 MHz, paired and with a guard band at 790-791 MHz. The Frequency Division Duplex (FDD) downlink starts at 791 MHz and FDD uplink starts at 832 MHz.

In relation to the 2.6 GHz band,the UK band plan is shown below, consistent with the CEPT band-plan in ECC Decision (05)05 which designates 2500 to 2570 MHz paired with 2620 to 2690 MHz for FDD use and 2570 to 2620 MHz for Time Division Duplex (TDD) use.

 

 

In relation to each of these bands, Ofcom sets out proposed technical conditions. I refer interested readers directly to the Ofcom document.

At the end of the consultation document these is a (not well flagged)  interesting section in which Ofcom consults on the possibility of making available, whether through competition in the auction or explicit reservation, a block of paired 2.6 GHz spectrum for low-power shared access, in which each licensee would have ’shared’ (non-exclusive) access to the spectrum. This can be used for applications including pico and femtocells, and it will be intriguing to see what response this section gets from industry.

UK Parliament launches inquiry into spectrum

The UK system of government and regulation can sometimes be confusing, with the Culture, Media and Sport Select Committee of the House of Commons this week announcing an inquiry into the use of spectrum in the UK and issuing a call for written evidence.

The Select Committee is neither the national regulatory authority with responsibility for spectrum (that being Ofcom), nor the relevant government department (that being the Department for Culture, Media and Sport – for details of how telecoms ended up there see this post). Instead the Select Committee provides parliamentary oversight and scrutiny, but has no power to set policy.

The issues being investigated include:

  • whether the proposed method of spectrum allocation promotes, or hinders, competition in the provision of mobile broadband services;
  • whether the upcoming auction can provide value for money for tax payers and how that should be balanced with benefits for consumers;
  • the potential for next generation mobile internet services offered by the forthcoming availability of spectrum;
  • whether the upcoming auction can deliver improved mobile broadband coverage in rural areas, as well as cities;
  • whether licence fees for mobile operators have previously been set at appropriate levels, and how this should be assessed;
  • how the position of the UK compares with other countries, with regards to the allocation and utilisation of mobile broadband spectrum;
  • the possible impact on alternative uses for spectrum.

Whilst the Committee has no formal power over Ofcom it is likely that Ofcom will take account of any finding or recommendations in the upcoming UK spectrum auctions of 800 MHz and 2.6 GHz spectrum.

Spectrum, broadband, customer switching and online piracy Ofcom’s telecoms priorities for 2011/12

I hope all readers noticed the date for Friday’s blog post (taken down on 2 April) and are not planning on bidding in the teleportation spectrum auction. Avoiding the obvious pitfall of announcing anything serious on 1 April, Ofcom today published its Annual Plan for 2011/12.

As a regular, if not avid, reader of such plans I am pleased to see that the shock of cost reduction has finally brought some focus to Ofcom’s activities.  This is the first plan from Ofcom since the UK Government’s post-global financial crisis October 2010 Spending Review. Ofcom has committed to a real-terms saving of over 28% over the next 4 years with much of the savings being delivered in the first year. Ofcom is reducing headcount by 170 and stopping some of its ‘fluffier’ activities such as encouraging digital participation, whilst paring down others (such as market research) to delivering what is needed, rather than what might be interesting or desirable.

Focusing on the telecoms priorities, these are:

There are, of course, other significant activities planned (details in chapter 4 of the Ofcom plan) from which I would highlight:

UK to auction 800 MHz and 2.6 GHz spectrum in 2012

Ofcom yesterday started a consultation on the rules for a proposed auction of 250 MHz  of spectrum in the 800 MHz (aka ‘digital dividend’) band and 2.6 GHz band in the first half of 2012. This is equivalent to 75% of existing mobile spectrum.

Whilst widely reported in the press as a ‘4G’ auction, apart from a proposed requirement in one of the 800 MHz lots of a 95% mobile broadband service obligation, there is no proposed technical use restriction or obligation to roll out LTE contained within Ofcom’s proposals.

Readers will recall the Watcher’s worry when Government published the Direction to Ofcom to carry out these auctions that the process was open to delay by means of litigation. Nothing in yesterday’s consultation allays that fear – if parties were to want to delay the auction there is  sufficient material within the proposals to mount an arguable challenge. However, this seems to me to be a very high stakes real-life example of the prisoner’s dilemma, and I can only hope that the real gains to be made by all parties (and the UK) from not delaying the auction will outweigh the potential relative advantages that could be gained by challenges by individual players.

For those who are interested, the legal constraints upon Ofcom are helpfully set out in Section 3 of the consultation, from which I would highlight Article 9 of the Framework Directive, which requires that:

‘spectrum allocation … based on objective, transparent, non-discriminatory and proportionate criteria.’

The consultation covers a number of areas, which are summarised below.

Mobile competition assessment

The first substantive section of the Consultation considers the state of competition in the UK mobile market, then goes on to consider what actions should be taken in the context of the auction to promote competition. Building on Ofcom’s December 2009 Mobile Sector Assessment, Ofcom conclude that an open auction would risk future competition, particularly at the wholesale level, and therefore propose two measures:

  • floors which are designed to ensure that at least four bidders will obtain a sufficient amount of spectrum to be able to operate as (at least) a credible national wholesale mobile network; and
  • safeguard caps designed to ensure that no one operator can obtain significantly more spectrum than their competitors. The proposed caps being consulted on are 2 x 27.5 MHz of sub-1GHz spectrum and 2x 105 MHz of mobile spectrum in total.

How to secure adequate mobile coverage

Ofcom want to ensure that there is a minimum coverage level, but feel that it is not proportionate to include coverage obligations in all licences. They are therefore proposing that only one 800 MHz lot will have a coverage obligation – no doubt that obligation will be reflected in a lower auction price. The proposed coverage obligation will be to:

  • deploy an electronic communications network that is capable of providing mobile electronic communications services;
  • with a sustained downlink speed or not less than 2MBits/s;
  • with a 90% probability of indoor reception; and
  • to an area within which at least 95% of the UK’s population lives.

For those with long memories, this proposal directly picks up on one of the previous Government’s Digital Britain proposals.

Design of combined award

Ofcom propose a combinatorial clock auction with generic lots for bidders to aggregate, so I predict plenty of work for the various economics consultancies on auction strategy.

Generic lots will comprise:

  • various categories of 2 x 5 MHz lots in 800 MHz band;
  • a single category of 2 x 10 MHz lots in 2.6 GHz band for individual high power use; and
  • a potential category for low-power use by concurrent licensees in 2.6GHz band.

Licence conditions

Ofcom will consult separately on technical licence conditions. So far as non-technical conditions are concerned they propose that the licences will:

  • be UK wide;
  • be technology and service neutral;
  • permit spectrum trading;
  • be of indefinite duration, with very limited powers for Ofcom to revoke during the first twenty years; and
  • contain an obligation on licensees to provide Ofcom with usage information.

Setting existing 900 and 1800 MHz fees post-auction

Ofcom propose to use the auction prices as the basis for revised fees for existing 900 and 1800 MHz licences.

Next steps

The consultation closes on 31 May 2011, and Ofcom will hold a series of meetings and workshops whilst the consultation is open. In parallel, Ofcom plan to publish proposals which will deal with protection of adjacent DTT spectrum and on the technical conditions relating to the auctioned spectrum.

Ofcom expect to reach a decision in the autumn and to proceed to auction as soon as possible thereafter – likely in 2012.