NBTC panel yet to settle licence auction issues
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Members of the telecom regulator's 2.1-gigahertz management subcommittee still have conflicting views on the spectrum reserve price, the number of licences to be made available at one time, and whether the so-called N-1 rule should apply in the upcoming
Some members of the National Broadcasting and Telecommunica-tions Commission (NBTC)’s 2.1GHz committee believe the reserve price should be lower than Bt12.8 billion, the level set by the now defunct National Telecommunications Com-mission (NTC) in 2010 in its licence auction plan. The reserve price is the minimum level the NBTC deems appropriate for the winning bid.
An NBTC source said these members reasoned that the reserve price should not be high. Unlike in the NTC era, all cellular operators now offer cellular broadband services, using their own spectra. Moreover, the NBTC will make more spectra choices available when the private cellular operators’ concessions expire and their spectra are returned to the NBTC for reallocation.
The members said that in the new auction plan, the N-1 condition should be replaced by other measures. They also want to see three licences auctioned at a time.
The N-1 condition means three licences will be made available if there are four prospective bidders, two licences if there are three bidders, one licence if there are two bidders, and no auction if there is one bidder.
“They reasoned that even with the N-1 condition, the bidders could collude to set up nominees to join the bidding to enable them to get the desired licence numbers. So the 2.1GHz subcommittee should create other measures instead to ensure genuine competition,” the source explained.
Some subcommittee members suggested that the NBTC auction off only one licence first. If the licence fetched a high price, the NBTC would then surprise the losing bidders by telling them that they would get the remaining licences if they agree to pay the same licence price that the bid winner paid for the first licence.
But some subcommittee members want to maintain the reserve price at Bt12.8 billion or raise it even higher, and want to put the N-1 condition in the auction plan. They questioned how the NBTC could give a satisfactory explanation to society if it lowers the reserve price without the N-1 condition.
The NBTC’s telecom committee is expected to hire US consultant Nera to be its auction adviser and evaluate the reserve price. The NTC used Nera as adviser in its auction plan, which was suspended by the Central Administrative Court’s injunction in September 2010, following CAT Telecom’s challenge to NTC’s licensing authority.
The NBTC intends to auction the licences in the third quarter. Under its timetable, it will conclude the licence numbers and begin work on the licence price next month, and finish auction rules, infrastructure sharing and national network roaming regulations in April.
According to CIMB Securities (Thailand), the NBTC’s guidance of the 3G spectrum auction taking place in the third quarter is an optimistic scenario, particularly after the NBTC’s recent announcement encouraging new players, both domestic and international, to participate in the bid. The NBTC will revisit regulations, such as the Foreign Dominance notification, that would encourage foreign telcos to join the licence auction. On top of that, the NBTC would have only 4-5 months to complete the whole regulatory process. That would be a tight schedule in CIMB’s view.
