3G licence auction preserves telecom status quo

The 3G licence auction turned highly controversial last week when the National Broadcasting and Telecommunications Commission (NBTC) was criticised by some quarters in society as providing too generous terms and conditions for the bidders, resulting in low bid prices.

It may be too late to reverse the result of the bidding. The questions and controversy surrounding the 3G bidding process should nonetheless provide lessons for Thailand and those involved in telecommunications licensing in the future. 

In years to come, licences for more-advanced telecommunications networks, such as one incorporating 4G technology, will be put on the table by the state.

The NBTC, the Finance Ministry and consumer groups have argued over whether the three 3G winners were allowed to pay too low a bidding price, at the expense of the public. But the fundamental question here is how the government can ensure a free and fair competitive environment that allows more potential bidders to participate in the process.

The argument over the sum of money that the government should have received has distracted attention from the fact that the telecom business environment in Thailand is not conducive to market competition. 

The advent of new technology in Thailand should create new opportunities for consumers, who should be able to utilise the platforms to enhance their creativity and innovation. The introduction of the advanced technology should also bring about new players in the market. And it is undeniable that foreign players have potential to help upgrade technology in Thailand, thanks to their capital and know-how.

However, the recent 3G auction saw the same old players participating in the bidding, partly because of regulations that do not encourage the participation of foreigners. The Telecom Law and the Foreign Business Law do not allow foreigners to hold more than 49 per cent in telecom companies, thus discouraging many international companies from participating in the competition in Thailand. 

 

Same old players

No one was surprised that this time the winners were Advanced Wireless Network of Advanced Info Service (AIS); DTAC Network of Total Access Communication (DTAC); and True Corp’s Real Future – three very familiar faces. 

Some tend to play the nationalism card in a bid to protect their own interests at the expense of consumers, who should be benefiting from a fairer competitive environment in the telecommunications market in Thailand.

The heated debate over the auction prices simply reflects the non-competitive environment in the telecom business in Thailand, where the same old players, who are politically connected, tend to have an influence on the decision-making process, directly or indirectly. 

The limits on players – via limitations on stakeholders, for instance – comes at the expense of consumers, who should be able to enjoy the latest technology to advance their innovations and communications.

The number of slots given to each winner is not as important as the level playing field of the telecommunications industry in Thailand. The widespread debate over the 3G bidding shows that the public is highly interested in and anxious to use the new technology.

The watchdog must ensure a level playing field to encourage competition, facilitating the entry of players with high technology into the local telecom industry. Such transfer of know-how is essential to Thailand’s technological development. 

At the same time, the regulators should ensure that telecom operators do not deprive consumers by failing to provide the best services. After all, the network frequency is considered a national resource that should serve the best interest of Thais. It should not be exploited by particular groups of investors.

The regulators should ensure a level playing field in the market to promote active participation and protect the interests of customers after licences are issued. 

In short, Thais should receive world-class service from international players, with accessible coverage and affordable service fees. They deserve no less.