Big boys ready to roll up their sleeves ahead of 900MHz licence auction tomorrow

And as the countdown to the crucial auction gets nearer, the TOT board is expected to convene to determine if it will launch a court action to seek compensation from the National Broadcasting and Telecommunications Commission, if a report finds the telecom was affected by the auction.

The Office of the Ombudsman last week recommended the TOT chairman and the Finance Ministry permanent-secretary examine the legal aspects of whether NBTC’s 900MHz auction tomorrow will damage TOT. 

It also suggested that both consider filing a case against the auction at the Central Administrative Court, if it were found that the auction financially affected TOT. 

The Ombudsman’s opinion on the matter follows it receiving a complaint by the TOT labour union. 

The union wanted the 900MHz returned to TOT after the 900MHz concession TOT granted Advanced Info Service expired in September. However, the NBTC reclaimed the spectrum for reallocation via the auction.

The four bidders for the 900MHz licences are Advanced Wireless Network (AWN) of AIS, True Move H Universal Communication (TUC), DTAC TriNet of Total Access Communication (DTAC), and Jas Mobile Broadband of Jasmine International. They also bid at last month’s 1800MHz auction.

AWN and TUC each secured the 1800MHz licences by offering almost Bt41 billion and almost Bt40 billion, respectively. Jas offered a final price of almost Bt39 billion, while DTAC bid Bt17.5 billion.

AIS is determined to snatch a 900MHz licence to reinforce its data service capacity.

Unlike in 1800MHz bidding, this time AIS’s strategic partner Singapore Telecom will reportedly send SingTel’s chief financial officer to take part in the bidding. AIS board chairman Vithit Leenutaphong and vice chairman Somprasong Boonyachai, who both took part in the 1800MHz bid, will also be present. AIS reportedly plans to use 5MHz of this 900MHz to serve its existing two million 2G users and plans to use the rest to enhance AWN’s existing 3G service. Currently AWN has 15MHz of 2.1GHz and 15MHz of 1800MHz, which don’t appear to be enough to cater for its 45 million subscribers’ high demand for data services.

For Jas, Tuesday’s auction is its last chance to obtain a licence so it can enter the mobile phone service market. If it fails to do so, it would have to wait until 2018 for another chance. That is when DTAC’s 1800MHz concession ends and the will be auctioned.

SK Telecom of South Korea and Japan’s SoftBank are reportedly keen to be Jas’s partner, if it wins a licence. A telecom industry source said that if Jas wins a licence, it might join with AIS and TOT for an infrastructure-sharing network rollout.

Jas is expected to send 10 executives to the bid, after sending five to the 1800MHz auction. 

When TUC of True picked up the 1800MHz licence, it announced that it would fiercely pursue a 900MHz licence. A telecom analyst doubts that True’s financial status would be affected if it wins another pricey licence. 

True already has a huge bandwidth. It has 15MHz of 2.1GHz and 15MHz of 1800MHz under NBTC’s regime and has partnered with CAT Telecom to offer a 3G service on the state agency’s 15MHz of 850MHz.

A telecom industry observer said that True was keen to clinch the 900MHz as it did not want Jas to win the licence and become a new rival. It is also better for True to have its own short-range spectrum like 900MHz. 

The bid winners at the 900MHz auction will each pay Bt8.040 billion as an upfront instalment for the licences in the first year and Bt4.02 billion in the second, third year, and fourth year. 

For the 1800MHz payment, 50 per cent of the bid price is required in the first year and 25 per cent for each of the following two years.

Telecom industrialists doubt that DTAC will bid fiercely for a 900MHz licence. At the 1800MHz auction, it raised the price for just few rounds before stopping. 

However, NBTC secretary general Takorn Tantasith believes the four bidders will bid fiercely. 

Although DTAC has combined 70MHz of 2.1GHz, 1800MHz, and 850MHz, some 55MHz of the combined 1800MHz and 800MHz under the CAT concession will expire in 2018. 

A former telecom executive, who declined to be named, said that operators now focus more on capacity than coverage and DTAC already had enough coverage on 1800MHz. Therefore DTAC might not want to spend heavily to acquire a 900MHz licence, which is good to use when expanding coverage. He added that DTAC could save the money for the next round of auctions in 2018.