Singapore’s November 3G spectrum auction paves way for fourth mobile telephony operator but new entrant unlikely as market already saturated, says Citigroup.

“Given the small size of the Singapore market and saturation levels, it would be very difficult for any new player to profitably come in at such a late stage and build relevant infrastructure,” says Citi.

Research house adds companies that plan to use spectrum for wireless broadband will find it difficult without economies of scale offered by voice usage. Notes Virgin Mobile, Singapore’s 4th operator in 2002, eventually pulled out after failing to gain market share.

Says $20 million reserve price for each spectrum lot (3 lots up for grabs) may result in higher capex for SingTel (Z74.SG), Starhub (CC3.SG), M1 (B2F.SG). Notes all 3 had initially pushed for spare spectrum to be allocated among themselves, but now face prospect of having to bid for frequency.