DTAC urges NBTC to revisit rules for 1800MHz spectrum auction ‘to benefit all’

Rajiv Bawa, corporate affairs chief and business development officer at the listed company, said its subsidiary DTAC Trinet (DTN) “would like to draw the NBTC’s attention to our proposals as per our referenced letter to NBTC on April 9, 2018. 
“We strongly believe that the proposed original draft auction rules for the 1800 MHz spectrum need substantial improvement if the NBTC is to conduct a successful auction and maximise the benefit for industry, consumers and the ambition of Thailand 4.0”.
In this regard, DTN has made four proposals, as follows:

1. Reserve price: “We maintain our view that the reserve price based on the winning price of the last 1800MHz auction is not a proper practice as it was driven by the bidder who was unable to pay for the licence. As such, the proposed reserve price is excessively high. If spectrum is sold at all at that price level, it will likely cause a financial problem for the winner to pay the auction price as it has already happened.
“The government should not set reserve prices at levels which are certain to leave spectrum unsold and unused. Prices need to fall to permit the industry to use more frequencies to the benefit of Thai subscribers and society as a whole. Recent mistakes by governments and regulators in India and Bangladesh need not be repeated in Thailand,” the letter stated.
2. Licence block size: “The proposed three licences of 2x15MHz are not practical taking into account the different demands for spectrum of the potential bidders. The fixed 2x15MHz block size will likely leave spectrum unsold in the auction. 
“A 2x5MHz block size will offer more flexibility for the bidders to buy the spectrum at the amount best serving their real demands based on their specific spectrum inventory, business plan and financial status. The smaller block size will also incentivise new entrants as the barrier to entry will be less. 
“As the latest wireless technologies are designed to apply for the spectrum of 2x5MHz for highest efficiency, most countries put forward the auction of 2x5MHz block size; recent examples of this approach include spectrum auctions in Malaysia, Myanmar, Bangladesh, Australia, Germany and the US,” the letter reasoned. 
3. N-1 rule: “DTN strongly disagrees with the proposed N-1 rule for the 1800MHz auction. It is widely known that Thailand needs to increase spectrum availability significantly in order to catch up with other countries. Contrary to this notion, the N-1 rule will increase scarcity of spectrum as the number of licences sold will be less than the number of bidders. 
“Apart from the negative impact on the industry and the country, this is a new rule which has never been applied before in any auction and is considered unfair to the bidders,” it argued.
4. Payment terms: “Both Tru [TrueMove] and AIS [Advanced Info Service] have asked the NCPO [National Council for Peace and Order] for relief in payment terms two years after the 2015 auctions. This is clear evidence that the financial pressure on the operators is extremely high. The NBTC should relook at the payment terms in the upcoming auctions and make sure that the payment terms are established in a rational way,” the letter concluded.