3G bid winners get down to competing on services

The race for 3G supremacy has begun. Despite differences in their balance sheets and partners, all will launch their services in the equal regulatory landscape created by the licensing regime.
National Broadcasting and Telecom-munications Commission (NBTC) deputy secretary-general Pitjapol Jantanasaro said the three cellular operators have already begun talks on jointly expanding their mobile-number portability capacity, which currently caters to 4,000 customers per day. This will enable them to achieve quick migration of a large number of existing customers from the state concessions to their upcoming 3G licences. Mobile-phone number porting enables subscribers to their use existing numbers with the new networks they switch to.
Advanced Wireless Network of Advanced Info Service (AIS); DTAC Network of Total Access Communica-tion (DTAC); and True Corp’s Real Future each won three spectrum slots in the auction last Tuesday. AIS has more than 34.8 million subscribers, while DTAC has over 23.9 million and TrueMove about 17 million. AIS subsidiary Digital Phone Co (DPC) has about 80,000 subscribers.

TRUE FUTURE
“We’ll rename Real Future as ‘True Future’,” said True chief financial officer Noppadol Dej-udom. True group has also considered restructuring its business group to prepare for the launch of the 3G-2.1GHz service. True is also seeking a possible strategic partnership to foster the 3G service.
Recently, True chief executive officer Suphachai Chearavanont said True would also use Real Future’s existing 850-megahertz (MHz) cellular base stations nationwide to provide data and voice roaming to prospective 2.1GHz subscribers during the rollout of its 2.1GHz network.
A CAT Telecom source said that True and CAT might resume talks on a possible MoU signing to jointly use the network assets of TrueMove and CAT. This would serve True’s plan to roll out the 3G network on an infrastructure-sharing basis. TrueMove is a True subsidiary. CAT owns TrueMove’s concession and network assets. CAT and True have a combined 13,500 telecom towers, of which 7,000 are TrueMove base stations under the concession.
AIS has around 21,000 sites with 900MHz telecom towers under TOT concessions, while DTAC has around 10,000 sites with 1,800MHz towers under CAT. AIS and DTAC are also expected to resume talks on possible network infrastructure sharing for the rollout of their 3G networks.
A highly placed NBTC source said AIS and TOT are in talks about possible joint use of AIS’ 5MHz bandwidth of 2.1GHz spectrum and 5MHz bandwidth of TOT on the same spectrum to provide 4G service. Last year they jointly tested providing the 4G service on the state agency’s 2.3-gigahertz spectrum.
Responding to speculation of a possible AIS-TOT partnership on the 3G network rollout, and even possible 4G service collaboration, AIS chief executive officer Wichian Mektrakarn recently said that at the moment AIS is focused on standing on its own.

SUPPLIERS READY
Some foreign telecom network equipment suppliers have already brought the 3G equipment to Thailand ordered by the three spectrum winners. They are waiting for the NBTC to grant them import permits. AIS is expected to use a network of Huawei Technologies and Nokia Siemens Networks (NSN), while DTAC will use that of Ericsson, and True that of Huawei and ZTE.
However, the bid winners’ rollout of the new 3G networks in new locations might be a little bit slow. The NBTC’s right-of-way regulations require cellular operators to hold a public hearing in the community every time they set up a large new base station.
Executives of the three cellular operators last week declined to specify when they would debut the 3G service, saying only that it would be as soon as possible. They all want to make sure that when they launch, consumers will get the best service quality. Rating agency Standard & Poor’s said late last week its rating on AIS (A-/Stable/--; axAA/--) is not affected by the company’s bid for three slots of 2.1GHz spectrum, and the associated capital expenditure. It believed AIS’ financial ratios will not deteriorate materially and its debt-to-EBITDA (earnings before interest, depreciation and amortisation) ratio will remain less than 1 time.
Its rating on TrueMove (B/Stable/--) was not affected by Real Future’s Bt13.5 billion bid for three slots of 2.1GHz spectrum. The bid, combined with an increase in capital expenditure, will put pressure on True’s already weak credit profile. Nevertheless, Charoen Pokphand Group, which owns 65 per cent of True , is expected to continue supporting True to help maintain the company’s credit profile.