NBTC vows limits on 3G fees soon

NBTC secretary-general Takorn Tantasit made the remark yesterday during a ceremony to hand letters to the three bid winners – Advanced Wireless Network of Advanced Info Service (AIS); DTAC Network of Total Access Communication (DTAC); and True Corp’s Real Future – officially approving the results of their bids at Tuesday’s auction of 2.1-gigahertz (GHz) spectrum slots.
Jesada Sivaraks, the secretary to the NBTC’s vice chairman, said the watchdog was urgently drawing up a condition to be attached to the licences stating that fees cannot exceed a certain ceiling, which the watchdog is in the process of determining. In parallel, the NBTC is drafting the main regulations that will permanently establish the charge ceiling for voice and data services for 3G licence holders.
Takorn added that average airtime tariffs for 2G mobile-phone voice services should also be lower than the present 99 satang per minute.
Duenden Nikomborirak, a scholar at the Thailand Development Research Institute and a member of the NBTC consumer protection subcommittee, said the NBTC must issue all key regulations quickly to ensure consumers get better services and fair prices from 3G licence holders. She noted that despite the market liberalisation via 3G licensing, the bid winners were the existing major players.

NO TIMEFRAME
Executives of the three operators yesterday said they want to launch their 3G services as soon as possible but declined to specify a timeframe as they first want to ensure service quality and that the watchdog has completed drawing up its regulations.
Advanced Wireless Network became the first bid winner to pay the required 50 per cent of the final up-front spectrum fee, plus VAT, to the NBTC. It yesterday handed over a cashier’s cheque worth over Bt7.824 billion issued by Bangkok Bank. It also produced for the NBTC guarantees from Bangkok Bank, Kasikornbank, Bank of Ayudhya, TMB Bank and Thanachart Bank to show that it can pay another 25 per cent of the fee in the second year and the remainder in the third year as required by the auction terms.
Each of the three are required to pay 50 per cent of the total spectrum fee up-front, plus VAT, within 90 days from yesterday, another 25 per cent in the second year of operation and the remaining 25 per cent in the third year. The NBTC will immediately transfer the amount to the state coffers.
Real Future will pay 50 per cent of its fee on Monday, while DTAC Network is expected to pay sometime next week. The NBTC’s telecom committee is expected to grant licences to Advanced Wireless Network and Real Future by the end of this month.
Advanced Wireless Network paid a total of Bt14.625 billion for three slots, while DTAC Network and Real Future both paid Bt13.5 billion for the three slots they each acquired.
AIS has set aside a budget of Bt50 billion to cover both the 2.1GHz spectrum fee bid and the 3G network rollout during the first three years. DTAC has allocated Bt40 billion for its spectrum bid and three-year rollout.
True chief financial officer Noppadol Dej-udom said the firm would spend Bt20 billion on network rollout in the initial phase.
“True will also seek a strategic partner to strengthen our 3G business,” he added.
The NBTC yesterday sent a letter to the Finance Ministry urging it to take action against its deputy permanent secretary, Supa Piyajitti, who sent a letter warning the watchdog that its spectrum auction on Tuesday did not comply with the ministry’s e-auction rules and could be deemed as having helped private bidders grab the precious national resource at a low price at the state’s expense. In an individual capacity, Supa also sent a letter to the National Anti-Corruption Commission asking it to probe whether the auction breached the State Bidding Act 1999.
In its letter, the NBTC claimed Supa’s action could damage the watchdog’s reputation and create misunderstanding among the public. It said that she had to show responsibility for her actions.
Takorn said the 2.1GHz spectrum auction on Tuesday was not a case of procurement, thus it was not subject to state procurement regulations. He also cited Article 45 of the 2010 frequency allocation law, which obliges the NBTC to grant the spectra by means of auction only.
Meanwhile, major ratings agency Standard & Poor’s said it believed the 2.1GHz spectrum auction was a positive development for Thailand’s telecom industry.
“The auction will help improve our assessment of above-average regulatory and industry risk in Thailand. It will help telecom companies grow and improve their profitability in the next three to four years. This is because they can provide higher-value 3G services; the licence fee for 3G is about 6 per cent of revenues compared with the existing concession fee of about 25 per cent of revenues,” the rating agency said.