Regulator has work to do before holding 2.1ghz licence auction

 
  
 NBTC telecom committee chairman Settapong Malisuwan said the auction plan had made “40-per-cent” progress.
Last week its subcommittee made the long-awaited decision to select the simultaneous ascending bid method to auction the licences. The total 45 megahertz of bandwidth will be put up for grab in nine slots, each containing 5MHz of bandwidth. The maximum bandwidth a bidder can bid for is capped at 20MHz.
But the watchdog still has a long way to go, with many tasks still not completed, from setting the licence reserve price to finalising the anti-collusion rules (see table).
“We’re also mulling the announcement after the 1,800MHz spectrum auction a maximum bandwidth from all spectra that one licensee can hold. Under international practice, one licensee is typically allowed to hold no more than 50MHz bandwidth of combined spectra,” Settapong said.
The regulator is expected to auction the 2.1GHz licences in October. For private telecom operators, the licences mean lower regulatory costs and an opportunity to generate revenue from providing better telecom services on a bigger bandwidth.

MATTER OF LIFE AND DEATH
Industry players believe that only Advanced Info Service (AIS) and Total Access Communication (DTAC), which sit atop large cash piles, could afford to bid for 20MHz bandwidth each. If that is the case, AIS and DTAC will dominate the 3G market.
Settapong said the cap could be revised, pending the outcome of the upcoming public hearing on the auction method. “The present cap was just announced to float the idea,” Settapong said.
A telecom analyst said that a financially constrained telecom operator might raise a legal challenge to delay the auction, if the cap is not revised.
“In terms of competitiveness, it’s a matter of ‘life and death’ between holding 20MHz bandwidth and holding only 5MHz of bandwidth,” the analyst said.
Settapong said the winner of the smaller bandwidth could wait to bid for the 1,800MHz blocks to enhance their capacity to offer either 3G or 4G services. Earlier, he said the NBTC intended to auction the 1,800MHz blocks six months after the 2.1GHz licensing.
Earlier, TrueMove recommended the NBTC cap the maximum 2.1GHz bandwidth one can bid for at 15MHz.
But the NBTC is worried that if there are only three potential bidders, a 15MHz cap would encourage collusion among them to bid for 15MHz each.
True group has been pressured by business factors to join the bid and to aim for large bandwidth to stay afloat in the industry.
The concessions of its cellular flagship TrueMove will end next September, while the attempt to quickly migrate TrueMove’s 18 million subscribers to its 3G service provider Real Move has faced obstacles.
The legality of the CAT-True 3G service partnership deals under which Real Move has provided the service are also being probed by authorities.
Andreas von Maltzahn, principal at global telecom, media and technology advisory and investment firm Delta Partners, said that the 3G-2.1GHz service has growth potential in Thailand as people are hungry for mobile Internet and other data services, like anywhere else in the word.
He made the remark at the release of the joint white paper “D-20: Rising stars in the telecom space” by global major graduate business school INSEAD and Delta Partners last Monday in Singapore.
The paper profiles 20 countries, including Thailand, which represent the highest opportunities for the mobile telecom industry in the next five years.
He added that the investors and analysts are looking closely at what is happening in Thailand, and the 3G-2.1GHz service will add extra business value to the 3G operators after the launch. But initially the operators need to spend millions of US dollars on spectrum licences, the 3G network rollout and handset subsidies.
He said that Thailand’s mobile telecom sector was projected to continue to grow in the next five years. He said its revenue was estimated at about US$7 billion (Bt219.5 billion) in 2011 and projected to grow to about $10 billion by 2016 – a 6- to 8-per-cent annual growth rate.
Besides Thailand, the other D-20 countries are Argentina, Bangladesh, Brazil, China, Egypt, India, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Poland, Russia, Saudi Arabia, South Africa, South Korea, Turkey and Vietnam.
These markets are expected to add over 1 billion new mobile phone users by 2015.