Singapore has suspended a telco licence in the past, but will Simba be next?

SINGAPORE - A Nov 16 deadline looms for Singapore’s fourth full-fledged telco Simba Telecom as it prepares to contest fresh allegations into its unauthorised use of radio frequency bands.

In a “show cause notice”, Singapore’s telecoms regulator the Infocomm Media Development Authority (IMDA) alleged that Simba’s unauthorised spectrum use was intentional and approved by the firm’s senior management.

If Simba fails to explain itself by Nov 16, it could face fines or lose its licence to operate, the telco’s parent company Tuas Limited said in an Australian Securities Exchange filing on Oct 26.

IMDA’s ongoing probe, first announced in May, had derailed Simba’s proposed $1.4 billion acquisition of M1.

How serious is a show cause notice? How badly will Simba’s over 1.4 million mobile subscribers be affected if the telco loses its licence? The Straits Times answers these questions and more.

1. What has IMDA accused Simba of?

Simba is said to have made unauthorised use of radio frequency bands, or spectrum, which are invisible air waves that carry the signals communication systems rely on.

IMDA assigns spectrum frequencies to mobile operators in Singapore, and telcos are allowed to use only the spectrum frequency assigned to them.

The regulator alleges that Simba deployed dynamic spectrum-sharing to about 133 sites intermittently in 2022 and 2023, allowing the use of 2,100 megahertz (MHz) band spectrum for both 4G and 5G. However, Simba was authorised to use only the 2,100 MHz band spectrum for 5G.

The telco is also accused of having used the 2,340 MHz to 2,360 MHz band spectrum without authorisation at about 92 sites intermittently between 2023 and 2026.

These instances are alleged to have been intentional and approved by Simba’s senior management.

IMDA also accused Simba for not getting authorisation to deploy 5G network equipment at two locations in 2023, leading to concerns about deficiencies in Simba’s governance and compliance culture.

2. What actions could the regulator take against Simba?

Simba’s spectrum rights could be suspended or cancelled. The telco might be fined of up to $1 million or 10% of its annual Singapore revenue, whichever is higher.

The regulator could also cancel or suspend Simba’s telco licence, or a part of it, or cut the duration of its licence.

Simba could be directed to take other actions to protect consumers.

3. Have companies gotten into trouble over radio frequencies in the past?

Yes. In 1997, M1 was fined $5,000 by the telecoms regulator - the maximum amount then - for transmitting on a mobile network channel without getting approval. M1 also paid an additional $550 fee for the period of unauthorised use.

Separately, Singtel was fined $5,000 in 1997 for interfering with the signals of M1 during the former’s trials for a cellular phone technology. Singtel’s base station had transmitted signals which interfered with M1’s signals.

Norvin Chan, an associate director at law firm Osborne Clarke Singapore, added that based on enforcement decisions published by the telecoms regulator, it had fined an unnamed party in 2009 for using radio frequencies not stipulated under the party’s network licence.

4. How serious is a show cause notice?

Issuing a show cause notice is considered a serious step taken by the regulator, said Bryan Tan, managing consultant at advisory firm Benhke SGS. He added that such notices are likely to have been issued in past cases.

Chan said: “It generally suggests that IMDA has moved beyond a preliminary inquiry and is considering whether grounds exist for adverse action. It does not, however, mean the allegations have been conclusively established to be true yet.”

Generally, if a telco does not cooperate, it could worsen the company’s position in the case and be counted as an aggravating factor against the firm.

Tuas has said that Simba intends to respond to the IMDA notice by the Nov 16 deadline.

5. What happens to Simba’s 1.4 million mobile subscribers if the telco loses its licence, or is hit by restrictions?

Losing a licence to operate is akin to a death sentence, said Tan.

A large proportion of Simba’s customers make advance payments for their mobile plans. So, a forced migration of subscribers to another telco would mean that refunds must be made.

But if a forced migration happens, Tan said that IMDA will be concerned with consumers being left high and dry, so it will likely direct Simba to facilitate an orderly transfer of subscribers.

Tan said that protecting customers is a key public interest aim of the regulator. “So, it would likely not favour a move that causes a forced migration of many customers.”

Other sanctions may prevent Simba from taking on new customers, while existing customers continue to be served by the company. The telco will likely also be required to stop using the radio frequencies it was not approved to use.

In 2020, the authorities suspended the operating licence of virtual telco Zero Mobile and worked with the company to ensure affected customers’ numbers were ported to other telcos.

Zero Mobile’s licence was suspended over outstanding billing disputes with former subscribers after the firm ceased service plans. About 230 former subscribers were affected.