ITU suggests 3 options for spectra auction

 The NBTC’s telecom committee hired the ITU to study the matter, including the auction’s design, valuation of the 1,800- and 900-megahertz spectra, starting prices, options for packaging spectra to be sold at the auction, and licensing conditions.
The ITU will submit the complete study to the NBTC in December, said Settapong Malisuwan, chairman of the telecom committee.
After that, the commission will start drafting the auction regulations and holding public hearings and a mock-up auction between January and May next year. He said the NBTC planned to kick off the spectrum auction next September.
While he declined to elaborate on the preliminary results of the ITU study, there appear to be three main options for the spectrum allocation.
The first option is sequential allocation – three separate auctions would be held as (or before) the current telecom concessions expire.
Thus the first 1,800MHz auction, for the concession contracts that ended this month, would be held in 2014. The first 900MHz auction would be held before the current contract ends in 2015, preferably next year.
The third auction for the remaining bands of the 1,800MHz spectrum, whose contract ends in September 2018, would be held in 2017 or 2018. The 1,800MHz concessions of TrueMove and Digital Phone Co ended on September 15, while the 900MHz concession of Advanced Info Service (AIS) will expire in March 2015 and the 1,800MHz contract of Total Access Communication (DTAC) will expire in 2018.
The second option is band-by-band auctions: Two separate auctions would be held.
The first, for all 1,800MHz bands, regardless of the contract end date, would be held in 2014. The second auction for the 900MHz spectrum would be held in 2014 or early 2015.
The last option is a combined auction: A single auction of the 1,800MHz and 900MHz bands would be held next year.
The ITU noted that these three options had different advantages and disadvantages. The sequential approach would be relatively simple to design.
It would also most closely match the date of the auction with the availability of the spectra.
This approach might also lead to the highest revenue outcome, as bidders might bid up prices in the first auction as they seek certainty and a first-mover advantage. Even if there were no new entrants, the existing concessionaires might compete strongly with one another in the first auction.
But the disadvantage is that the bidders might see this approach as the NBTC’s attempt artificially to constrain spectrum availability to force up the price in the first auction. Spreading out the auction over several years would make it more difficult for them to plan their networks and reduce certainty for the industry.
The band-by-band approach involving two auctions would have similar advantages and disadvantages to those in the first approach.
In the last option, the main advantage of the single combined auction of both bands is that it would provide flexibility and choices for bidders and maximise the spectrum availability in one auction.
 The greater availability would likely lead to improved efficiency of spectrum use and better planning of the networks and services. It might be easier for the NBTC to reserve spectra for new operators, as there would be a lot of bandwidth on the market at one time.
However, this approach would likely lead to lower revenue – the availability of a large amount of bandwidth at one time might see less intense competition among the bidders. In addition, the winners of the spectrum bands that will not become available until 2018 would face a long wait, despite perhaps having to pay up-front at the time of auction.