Firms ready network suppliers before bid

If things go as planned, the National Broadcasting and Telecommunications Commission (NBTC) will auction the spectrum on October 16 and grant licences to the bid winners next January. But rumour has it that this week some parties plan to lodge a complaint at the watchdog that its auction terms and conditions appear to ease the way for three bidders to clinch spectrum slots without genuine competition.
Advanced Info Service (AIS), whose subsidiary Advanced Wireless Network (AWN) has applied to bid, is expected to select Nokia Siemens Network (NSN) and Huawei Technologies as key 3G network equipment suppliers.
Total Access Communication (DTAC), which is participating in the auction via its subsidiary DTAC Network, is expected to select Ericsson as the key supplier.
True Corp, whose subsidiary Real Future has joined the fray, is likely to select Huawei and ZTE.
The suppliers are upbeat about the prospect of clinching 3G network supply deals.
The NBTC vice chairman’s secretary, Jesada Sivaraks, expects the winning bidders to launch their 3G services within the first half of next year.
Backed by strong balance sheets, AIS and DTAC are each expected to spend at least Bt40 billion-Bt50 billion during the first three years of the 3G-network rollout. Both are also in talks to share 3G infrastructure in order to reduce capital expense and to speed up their network rollouts.
True is expected to roll out its network on an infrastructure-sharing basis with 7,000 cellular base stations of BFKT (Thailand), which is a subsidiary of Real Future. BFKT has leased these bases to CAT Telecom to generate wholesale 3G bandwidth capacity, using the 850-megahertz spectrum.
Given that the 2G concessions of TrueMove and AIS will end in September next year and in 2015, respectively, True Corp and AIS will have to speedily build up 3G networks to quickly migrate their customers from the concessions to the 3G networks. The NBTC also requires all spectrum winners to have their networks cover 80 per cent of the population within four years of licensing.
The telecom analyst expected only mild competition at the auction, as there is enough spectrum for all three bidders and the final up-front spectrum fee is unlikely to be very high. The analyst assumed that each of the three bidders would end up paying only Bt15 billion as a fee.
The NBTC has a total of 45MHz of bandwidth on the 2.1GHz spectrum. It will auction nine slots, each containing 5MHz of bandwidth at a reserve price of Bt4.5 billion each.
Each of the bidders can go for a maximum of 15MHz of bandwidth. This drew criticism from some telecom experts as paving the way for three bidders to grab the highly prized spectrum at low competition.
The watchdog argues that the bidders will fiercely compete to quote the highest price for the desired number of spectrum slots. Those quoting the highest price for the slots are eligible to be the first to select the desired spectrum ranges. The auction features two phases – bidding for the spectrum slot numbers first, and then choosing the spectrum ranges.
AWN, DTAC Network and Real Future submitted their applications to use the 2.1GHz spectrum last Friday. On that day, AIS’ share price surged 0.47 per cent to close at Bt214, while that of DTAC surged 0.54 per cent to close at Bt92.50. True’s share price rose 1.67 per cent to close at Bt6.10.