Singapore Telecommunications, Starhub and M1 declined in Singapore trading as the government sought bids for its remaining high-speed wireless spectrum, sparking concern more competitors may enter the market.

SingTel, as Southeast Asia’s biggest phone company is known, dropped 1.6%t to $3.06 at the end of Singapore’s morning session. Starhub, Singapore’s second-biggest phone company, fell 2.8%, the most since May 20, to $2.42. M1, the smallest of the three operators, slipped 1.3% to $2.23. The benchmark Straits Times Index fell 0.3%.

 

“The auction of the additional 3G spectrum reaffirms our ‘neutral’ rating on the sector as we expect competition to further intensify,” DMG & Partners Securities Pte. wrote in a note to clients today. “We question the rational of a fresh auction as the additional spectrum could otherwise be more equitably distributed among existing operators. Singapore’s telecommunications market is saturated.”

 

The InfoComm Development Authority of Singapore is seeking bids for three lots of radio frequencies allocated for so-called third-generation, or 3G, mobile services, according to a copy of auction rules published by the regulator on its website on Sept. 3. The government agency said it will accept minimum bids of $20 million for each radio frequency bandwidth at an auction set for Nov. 15. Bidders will not be limited to the three existing phone companies, the agency said.

 

The decline in the share of Singapore’s three phone companies today “seems overdone,” James Sullivan, an analyst at JPMorgan Chase & Co. said by phone.

 

“It’s unlikely that a greenfield player will bid for the spectrum given that Singapore is a small market with high penetration,” Sullivan said.

 

There were 7 million mobile subscriptions in Singapore as of June this year, boosting the penetration rate to 141%, government data showed. That compares with subscriptions of 6.9 million in January and penetration rate of 138%.