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Mon, May 15, 2006 : Last updated 11:13 am (Thai local time)



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Home > Opinion > A level playing field for telecoms





EDITORIAL
A level playing field for telecoms

Interconnection charges would help end the mobile-phone call gridlock caused by heavy promotions

The ubiquitous mobile phone has increasingly become an indispensable part of everyday life. So much so that every time there is a hiccup in the country's mobile-phone network, those who have come to rely on these devices to keep their business and personal lives organised complain loudly, and service providers promise to upgrade their wireless switching and transmission equipment.

The latest problem that users have experienced in recent weeks - an inability to place calls during peak hours in the early evening - is attributed to networks being swamped by calls made by users taking advantage of new promotions offered by mobile-phone operators. Some promotion campaigns offer new subscribers virtually unlimited free air time after charging a basic rate only for the first few minutes.

With no price barriers or time limits, users take full advantage of such promotions by placing calls and staying connected for a long time, contributing to the jamming of inter-network links and making it difficult, if not impossible, for users to put through calls across networks run by different operators.

There are more than 30 million cell-phone users in Thailand, and the number continues to rise, compelling service providers to expand and upgrade networks continuously in all parts of the country.

The Consumer Protection Board says it will look into the matter to determine whether such marketing promotions and failure to deliver trouble-free service to subscribers constitute false advertisement, which is punishable under consumer-protection laws.

The National Telecommunications Commission (NTC), which regulates the telecom industry, says it will consider requiring these operators to submit their promotion plans for verification, to ascertain whether they have the actual capacity to provide reliable service as promised.

But such a requirement could be problematic, because there is no accurate method for predicting how consumers will react to promotional campaigns before they are launched. Besides, service providers regard their marketing plans as business secrets that must be tightly controlled.

As a stop-gap measure, Advanced Info Service Plc (AIS) and Total Access Communication (DTAC), the top two service providers, have already promised to increase the capacities of their direct network links to ease the problem of congestion at inter-network links. But there is no way of telling how much expansion is required to ensure smooth inter-network links among operators and reliable service to their users.

A better and lasting solution, which is gaining acceptance among service providers, is for the NTC to regulate interconnection charges. These are the fees that mobile-phone companies charge other carriers to terminate calls on their networks and are a significant input cost in providing retail service of land-line-to-mobile and mobile-to-mobile calls.

Unlike in many other countries, there is no mobile interconnection regime within the structure of Thailand's telecom industry.

That is too bad, because the regulation of mobile termination rates has the potential of creating a level playing field for the country's three main mobile-phone operators - AIS, DTAC and True Move - as well as rationalising the pricing environment for these operators.

Under the current structure, AIS pays TOT Corp Plc, its mobile-phone concession owner, a revenue share without paying for access charges, while smaller rivals DTAC and True Move pay CAT Telecom, their concession owner, both a revenue share and access charge. DTAC and True Move consider themselves at a disadvantage compared with AIS.

If the NTC decided to require all mobile-phone operators to pay interconnection rates and do away with access charges, it would not only ensure fair competition among operators, but also rationalise their marketing campaigns. Without interconnection, campaigns that give away free air time to subscribers cost service operators nothing.

But with the introduction of interconnection rates, a high volume of outgoing traffic will prove costly. To avoid this, operators are expected to focus more on quality and reliability of service than on senseless price wars. Ultimately most consumers - except perhaps cell-phone junkies who spend hours on end talking on their handsets - would gain from fair competition among operators.







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