NBTC panel to consider two optionsfor 2.1-gigahertz spectrum

The working team of the NBTC telecom committee will propose the price options for the committee’s consideration in its meeting next week.

The proposal is part of the working team’s conclusion after receiving all opinions at last month’s public hearing on the NBTC’s 2.1GHz spectrum licensing terms and conditions.

As part of the proposal, the maximum 2.1GHz spectrum bandwidth each of the contenders will be allowed to bid for in the auction would be changed to 15MHz, instead of the 20MHz in the existing licensing draft.

The reserve price of each of the spectrum slots should be either maintained at Bt4.5 billion per slot of 5MHz bandwidth as in the existing draft or raised to Bt5.2 billion. The Bt5.2 billion price is equal to 80 per cent of the market price of 5MHz bandwidth of the 2.1GHz spectrum, which was initially valued at about Bt6.44 billion.

Some NBTC commissioners mentioned earlier that if the watchdog decides to change the maximum bandwidth, each bidder can bid for up to 15MHz bandwidth, this might lessen competition among the three potential bidders in the auction. Therefore, it should increase the reserve price to offset the possible low competition in the auction. If not, it will risk facing criticism of favouring bidders.

While some telecom operators proposed in the hearing that the telecom committee extend the install payment period of the price of the spectrum for the bid winners to five years instead of three years in the existing licensing draft, the working team will propose the telecom committee to maintain the original period of three years.

Under the existing licensing draft, the NBTC will call the auction of nine slots of the 2.1GHz spectrum, each containing 5MHz bandwidth and with a reserve price of Bt4.5 billion per slot. The bidders can bid for a maximum of 20MHz bandwidth.

Many parties have complained that the 20MHz maximum would pave the way for only cash-rich bidders to win huge amounts of bandwidth at the expense of smaller bidders.

NBTC vice chairman Settapong Malisuwan said yesterday that the watchdog’s plan to auction the 2.1GHz spectrum in mid-October was "on track". He made the remark at a seminar on the future in Thailand of third-generation wireless broadband, co-hosted by the NBTC and the Senate’s science, technology and communications committee.

The telecom committee will submit the final licensing draft for the NBTC board’s approval on August 22. The final draft is expected to be published in the Royal Gazette at the end of this month. Then the watchdog will call the spectrum bidding in mid-October and award the spectrum to the winners in November.

If things go as planned, the bid winners are expected to launch the 3G service in major cities in May or April next year.

Settapong said that there is no need to hold the hearing again on the licensing draft if the telecom committee does not make a ‘significant change’ in the draft. If it decides to reduce the maximum spectrum bandwidth each bidder can bid for to 15 MHz bandwidth, it has no need to do hearing on the issue.

When asked whether the telecom committee had to hold the hearing again on the licensing draft if it decides to change the spectrum reserve price, Settapong said the price change could be deemed a significant issue. If need be, the watchdog could hold a quick hearing on any specific issue.

Chaiyan Puengkiatpairoj, the Information and Communications Technology Ministry’s deputy permanent secretary, said at the seminar that the NBTC should not focus only on 3G but also on improving the quality of the existing second-generation conventional cellular service.

Total Access Communication’s chief corporate affairs officer, Darm Sukontasap, said at the seminar that DTAC was eager to participate in the spectrum auction. He denied concerns of a possible collusion among the three major telecom operators in the auction.