Low fees may be condition of 3G licences

Takorn Tantasit, secretary-general of the NBTC, said yesterday that the committee would convene tomorrow to study Monday’s ruling by the Central Administrative Court dismissing the petition of the Ombudsman against the October auction for bandwidth on the 2.1GHz spectrum. It will also examine the conclusion of its panel tasked to probe possible collusion among the three winning bidders for slots on the spectrum. The panel found no evidence of such collusion.
The telecom committee will decide tomorrow whether it should go ahead and grant the 2.1GHz licences to the bid winners. If this is approved, the committee will convene again on Friday to consider including with the licences the condition that 3G service tariffs must be 15 per cent lower than the present average.
Takorn said that before the three telecoms started offering 3G service, they would have to advise the NBTC what they intend to charge customers.
The three winners of the spectrum slots have reiterated that market forces are the most effective way to motivate telecom operators to compete by offering low service fees.
The NBTC has had informal talks with the three firms on possible network-interconnection charges to be used among them. The appropriate rate should be 50 satang per minute per call. The interconnection fee is the amount callers pay to the networks of the call receivers.
A telecom analyst has warned that there is still a pending investigation of the NBTC by the National Anti-Corruption Commission regarding the 2.1GHz auction, and this probe could drag on for years.
An NACC subcommittee is probing whether the telecom committee’s approval of the 2.1GHz bid outcome on October 18 breached the State Bidding Act.

DTAC BIG WINNER
Total Access Communication (DTAC) stands to benefit the most from the 3G licensing after Monday’s court ruling, Asia Plus Securities said in a research note. DTAC’s year-on-year net-profit growth in 2013 is projected at 18 per cent, as 30 per cent of the company’s income currently goes to income-sharing arrangements.
Meanwhile, Advanced Info Service (AIS) will see less benefit because its current income sharing is lower, at 25 per cent. Its net-profit growth in 2013 is estimated at only 12 per cent.
Monday’s court decision came as a boost to the information and communications technology sector, as it clears the way for the NBTC to grant the 2.1GHz-3G licences to mobile operators by the end of this month, Asia Plus said.
Network installation will then be conducted, followed by commencement of 3G services in Bangkok and other big cities from the second quarter of next year, which will enhance efficiency and capacity of data service. The current concessions have limited 3G capacity.
Moreover, under the new licensing regime, operators’ service costs will decrease significantly because of the drop in income sharing from 25-30 per cent of total service income to just 10-15 per cent (licence cost included), it said.
After the 3G service starts, there will be continuous migration of 3G customers to the new licence-holders, which carry lower costs, on the assumption that the operators will be able to carry migration of wealthy customers (10 per cent of the total) to the new licences in 2013.
Asia Plus noted that while the court’s dismissal of the case guarantees that the new 3G service will be provided by 2013, prices of some stocks in the sector have already factored in the news, especially AIS, whose upside is limited to 13.6 per cent.