1,800MHz: Price may not exceed that of 2.1GHz
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The auction price for the 1,800MHz spectrum band may not be higher than that of the 2.1GHz band, which was auctioned last year, if the terms and conditions require the bid winners to use the spectrum to provide 2G voice service as well as 4G data service.
Jesada Sivarak, secretary to the National Broadcasting and Telecommunications Commis-sion’s (NBTC) vice chairman, Settapong Malisuwan, yesterday said the 1800MHz spectrum would be reclaimed from the existing 2G service providers.
Therefore, besides providing 4G broadband cellular service, the spectrum should also be used to continue serving current 2G consumers.
This factor will affect the auction price of the spectrum, given that the bid winners will have to invest in the costly 2G system while the 2G voice service will generate lower revenue when compared to data services.
He said the equivalent 1800MHz auction-winning prices in other countries were nearly always lower than the 2.1GHz final auction price.
For example, the auction of 1800MHz in Italy in 2011 saw an average winning price of US$0.073 per MHz of bandwidth per capita, while the average in Hong Kong in 2009 was $0.021, and the winning prices in Spain, Germany, the United Kingdom, Singapore and Norway were below these levels.
Only the 2011 auction in South Korea saw a final 1800MHz price at a high level, $0.48 per MHz per capita, because the spectrum was for the provision of 4G data service only.
The average winning price of the auction of 2.1GHz spectrum licences in Thailand last year was $0.233 per MHz per capita, which was in the same range as Singapore ($0.25) and Belgium ($0.279), but considerably lower than in Canada in 2008 ($1.395), France in 2010 ($0.594) and India in 2010 ($0.28), said Jesada.
The NBTC has already engaged the International Telecommunications Union to draw up the auction terms and regulations to auction the 1800MHz spectrum used by TrueMove and Digital Phone Co (DPC), whose concessions expire on September 15.
The two companies have some 17 million 2G subscribers combined. The NBTC expects to auction the spectrum in the third quarter of next year.
Jesada, who is a member of the NBTC’s subcommittee on the 1800MHz auction plan, expect more than 12 million subscribers of TrueMove and DPC will not migrate to other networks after September 15.
TrueMove holds the spectrum band from 1710MHz to 1722.6MHz, while DPC holds the 1747.9MHz-1760.5MHz range, giving each of them 12.5MHz of bandwidth.
Technical difficulty
Jesada acknowledged that it was technically very difficult to plan for the 1800MHz auction, since the two operators’ spectrum ranges were not adjacent.
The NBTC may auction only 20MHz of their combined bandwidth and leave 5MHz for the next round of bidding, when the 1800MHz concession of Total Access Communications (DTAC) expires in 2018, he said. DTAC holds 50MHz of spectrum bandwidth.
Another obstacle to auctioning the 1800MHz bandwidth of DPC and TrueMove is state agency CAT Telecom, which owns their concessions and wants to keep the spectrum it has granted to the two companies.
The NBTC today will send an official letter to CAT requesting it to prepare to return to the watchdog all spectra, post-concession expiry.
