What happens when you hold a 3G spectrum auction that fails? No, I’m not talking about the shenanigans going on in Thailand, this is the bastion of all that is good and proper in Asia, Singapore. Failure, the word used by the local press, may also be a little strong in this case. The story goes something like this.

The Infocomm Development Authority of Singapore (IDA) which doubles as the telecoms regulator decided to auction off some unused 3G spectrum left over from the last auction in 2001. At that time, four licenses were offered but only three were taken up by SingTel, StarHub and M1. In its wisdom, and despite appeals from the three players to allocate the remaining spectrum evenly to each, the IDA decided to proceed with the auction ostensibly to attract another operator and increase competition.

That might have been all well and good in a growing or developing market but Singapore with its 5 million population, small land mass and mobile penetration way over 100% the last thing the current operators needed was more competition. And who, in their right mind, would want to contemplate entering such a market where even MVNOs have failed to stake a foothold?

So, it was no surprise to anyone, except maybe the IDA, that the only three bidders were SingTel, StarHub and M1. It also appears they weren’t exactly keen about it because none of the bids for the three lots exceeded the SG$20 (US$15.25) million reserve. The IDA, left with no choice, fell back on the original plan mooted by the three and allocated the lots to them for the reserve price. Not a bad deal when you consider that at the last auction they paid 50 per cent more than that amount for equivalent spectrum! Needless to say, they were pretty happy with the outcome.

I wonder how many markets in the world have available 3G spectrum lowering in value? Singapore may have inadvertently achieved another first.