Make the airwaves free and fair

Today, the National Telecommunications Commission (NTC) is scheduled to announce the method and the number of terms of conditions for awarding third-generation (3G) spectrum licences to telecom operators. The expected announcement has not only attracted the attention of interested telecom operators but also the public, for the terms and conditions will affect consumers and will relate to the benefits that the government should receive from the winning companies. After all, 3G is a promising sector that will almost certainly guarantee huge profits for the successful companies. Thus, the question is whether the NTC would come up with the terms and conditions that would not award the lump sum profits to the companies at the expense of the consumers.

Access to new technology is an essential element in helping enhance the country's competitiveness in the age of globalisation. Therefore, the government should help consumers gain access to new technology at fair prices.

NTC secretary general Suranan Wongvithayakamjorn earlier said the NTC's board would conclude its 3G spectrum licensing plan - including the appropriate number of licences, the spectrum bandwidth and the licensing methods - and then hold public hearings and accelerate the working process to enable it to award the 3G contracts in the third quarter instead of the fourth quarter as earlier expected.

The NTC expects the 2.1 GHz 3G service to commence early in 2010.

The criteria for choosing the winners has not yet been announced, and it is still unclear whether the NTC will use the auction method, a "beauty contest" or a combination of both. Also, it is not clear how many licences will be issued and whether the NTC will allow foreign companies to participate in the 3G operation in Thailand.

History has shown that regulators tend to be slower off the mark than the suppliers and users of technology, thus allowing telecom companies to make huge profits from the monopolies in the local telecom sector. Inadequate competition tends to allow operators to set service rates at a high level and thus gain massive profits. This has the effect of limiting the chances of some consumer groups to access the technology.

The NTC should try to ensure that the terms and regulations of the new 3G technology are of benefit to consumers, because accessibility should enable users to profit from what is also in use elsewhere in the world. Operators have fully expressed support for the 3G licensing because it is a promising field and there are tremendous business opportunities. For instance, the technology will enhance wireless broadband Internet. Besides, fair competition will help bring down the price of handsets to make them more affordable to ordinary people.

Somkiat Tangkitvanit, an economist at the Thailand Development and Research Institute (TDRI), recently urged the public to closely follow the NTC announcement. The first question is how the NTC chooses to select the winners. The "beauty contest" method can be viewed as subjective. The auction method might guarantee a high return for the government but the companies tend to argue that if they have to pay too high a licence fee, they might have to charge consumers high fees, too.

Somkiat said that the latter would not be the case if the government awards licences to a sufficient number of telecom operators and thus creates fair competition in the market.

The next question is how many licences will be issued? At present, three mobile phone operators command around 95 per cent of the market share. Thus, it is expected that the NTC will issue licences to a fourth or even fifth operator in order to promote competition and fair service prices. It was earlier estimated that if the NTC decides to issue four licences, the winners would be expected to spend a combined Bt50 billion to Bt60 billion on the 3G network, which would be a great boost to the economy.

But the NTC should also promote competition by allowing newcomers, regardless of their nationalities, to enter the market. Somkiat pointed out that some companies tend to "stir nationalism" at the expense of consumers. Besides, the country has to depend on foreign technology for 3G development anyway, and as a result there's nothing for the country to protect in terms of local industries.

The telecommunications industry in Thailand will continue to grow steadily in 2009 due to the growing demand for telecom services, and the 3G and WiMAX platforms will lead to applications that will create new business and investments in other industries.

The application of 3G will help companies survive during this difficult economic period because when they have to downsize their operations to reduce overheads, the need for cost-saving telecommunication technology rises in accordance.

The new technologies will help open up business opportunities for many companies. Therefore, the NTC has to come up with terms and conditions that ensure fair access at affordable prices. The terms and conditions should not be written to favour certain groups of operators and they should not incur the cost of a lost opportunity for the public in the long run.