Telco operators air concerns

Operators are expected to voice these opinions at the National Broadcasting and Telecommun-ications Commission’s public hearing on the draft rules in Chiang Mai today.

The NBTC tentatively plans to auction two 1,800MHz licences on the morning of November 11 and two licences on the 900MHz spectrum in the afternoon.

Meanwhile, CAT Telecom will remind the NBTC soon that potential bidders should be informed that the Central Administrative Court is still considering CAT’s petition against the commission’s move to reclaim its part of the 1,800MHz spectrum for the auction.

As things currently stand, there will be two licences on the 1,800MHz spectrum up for grabs, each for a pair of 12.5MHz bands, one for downlink and one for uplink. The minimum bid is Bt11.6 billion per licence.

CAT is in the process of transferring an idle 5MHz of bandwidth on 1,800MHz, currently held by Total Access Communication (DTAC), to the NBTC for auction. If the state agency successfully transfers this bandwidth, the NBTC will have 30MHz of 1,800MHz for auction, up from the present 25MHz. The 30MHz will be divided into two licences, each featuring a pair of 15MHz bands.

A telecom-industry source said the split of the 1,800MHz spectrum into costly big blocks, instead of a pair of 5MHz bands, had dimmed the chance of small bidders being able to afford a licence. Given that only the three big telecom operators could afford the licences, the auction rules should be drafted in a way that supports the entry of new small players to the market, the source said.

He was also concerned that auctioning the 1,800MHz and 900MHz spectra on the same day might favour bid collusion. The bidders might make a deal on which of them would go for a 1,800MHz licence and which for 900MHz.

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He suggested that the regulator should hold the 1,800MHz auction first and the one for 900MHz months later.

Spectrum cap

"In this way, the bidders would compete for the 1,800MHz spectrum. They would not take the risk of waiting to grab bandwidth on 900MHz, as they would not know what would happen before the 900MHz auction comes up," he said.

He also questioned the auction rule requiring the licence awardees to cover 40 per cent of the population with their 1,800MHz network within the lengthy period of four years. The slower they establish the network, the slower the country would benefit.

According to the NBTC, there is no need to quickly roll out a fourth-generation network on 1,800MHz because, unlike 3G, 4G technology is mainly for data service, not for both voice and data, and the demand is expected to be concentrated in urban areas.

When the NBTC granted the 2.1-gigahertz licences in late 2012, it obliged the bid winners to cover 50 per cent of the population within just one year.

DTAC chief executive officer Lars-Ake Norling said his company had a strong interest in the spectrum auctions for both 1,800MHz and 900MHz frequencies.

He thinks both auctions should be held simultaneously – to allow participants to bid according to their strategy and budget. Dividing the spectrum into pairs of 5MHz each would provide more flexibility and give small operators a better chance to win a licence. It would also ensure there would be more than two winning bidders, hence boosting competition in the market.

"We are confident [of being able] to roll out the 4G service on the new spectrum within the timeframe set by the NBTC. Our 3G network roll-out on the 2,100MHz spectrum was completed ahead of the required schedule," he said.

Advanced Info Service has criticised the auction rule that caps the total bandwidth each telecom operator can own at 60MHz. The rule also requires the bid winners to hand over part of their bandwidth if they end up exceeding the maximum after the auction. The excess will be transferred to the NBTC or the state telecom agencies, depending on which of them issued the bandwidth in question.

AIS is concerned that if DTAC, which now owns the most bandwidth at 75MHz, wins a licence and then has to hand over the excess to CAT Telecom, its concession holder, the failed bidders could partner with CAT to use this bandwidth at a comparatively low cost. This would create unfair competition in the market, AIS believes. The aim of this cap to prevent spectrum hoarding.

According to True Corp, the NBTC should made it clear how excess bandwidth would be transferred and what the NBTC could do if a telecom firm declined to transfer it.