Efficiency, not profit, is goal, NBTC declares

Settapong, who is chairman of the NBTC’s telecom committee, said the policy was aimed at finding a balance between gaining revenue on the one hand, and achieving optimal efficiency in frequency allocation and preventing bid collusion on the other.
The watchdog’s 2.1GHz spectrum-management subcommittee will ask all major cellular operators this month for their opinions on the appropriate auction method and the spectrum bandwidth needed by the cellular industry.
The subcommittee is considering three main options for the auction method (see box). Currently, the NBTC owns a total of 45 megahertz of bandwidth on the 2.1GHz spectrum.
One option is to auction licences each containing 5MHz of bandwidth. The bidders would be allowed to bid for a maximum of either 20MHz or 15MHz of bandwidth in total.
Settapong said that under this method, bidders with large holdings of cash could go for maximum bandwidth from the outset. Those who feel they can’t compete for maximum bandwidth could switch to bidding for a smaller bandwidth.
Under this option, he said, bidders must have a firm idea of how much spectrum bandwidth they need to put together a sound bidding plan.
He said the watchdog would fine-tune the details of the final auction method later to ensure genuine competition.
A 2.1GHz subcommittee source said that of the three options, the least likely to be selected was auctioning three licences for 15MHz of bandwidth each. This option is seen as being unlikely to promote bidding competition, as only three telecom operators – Advanced Info Service, Total Access Communication (DTAC) and TrueMove – are expected to enter the bidding.
Settapong said the watchdog was expected to finalise a reserve price for the licences in May. The reserve price is the licence price the NBTC thinks is appropriate.
The auction details set by the NBTC would be different from those set by its predecessor, the National Tele-communications Commission (NTC) (see box), he said.
For example, the NBTC plan might drop the N-1 condition, which seems to contradict the Frequency Allocation Law’s goal of promoting equal opportunity to access spectra.
The N-1 condition means three licences will be auctioned if there are at least four bidders, two licences if three bidders, one licence if two bidders, with no auction being held if there is only one bidder.
The subcommittee will also work out what proportion of 3G bandwidth capacity the licence winners have to set aside for leasing to firms that want to provide 3G services on a mobile virtual network operator (MVNO) basis.
In the NTC’s auction plan, licence winners were required to set aside 40 per cent of 3G network capacity for leasing to MVNOs.
The NBTC’s spectrum-management, telecom and broadcasting master plans were all published in the Royal Gazette last week. The watchdog intends to auction the 2.1GHz licences in the third or fourth quarter.
Settapong said that the longer the NBTC keeps the 2.1GHz spectrum blocks, the further the spectrum value would decline, given that new blocks of other spectra will be available soon for auction.
The 2.1GHz subcommittee is still drafting regulations to support the auction and promote infrastructure sharing, mobile data quality service and network roaming.