NTC board to decide on number an size of 3G licences

This follows the board's decision that the 2.1 GHz mobile broadband spectrum licences would be awarded via auction.

The NTC has a total of 45 MHz of bandwidth in the 2.1 GHz spectrum. According to the proposal submitted to the board, there are two options for the number of licences.

The first is four licences, each with a 10-MHz bandwidth. The second is four licences, three with 10 MHz and one with 15 MHz.

In the first option, the NTC would keep the remaining 5 MHz of bandwidth, which would later be granted to a bid-winner who can prove after offering the service that they can efficiently operate the 3G spectrum and provide the best 3G service.

The proposal is an amalgam of recommendations from the NTC office, the NTC licensing consultant's conclusions, and the results of public hearings.

The NTC will discuss any remaining issues in the coming weeks.

The proposal recommends that all licences be auctioned at the same time on an open-bid basis.

Bidders will be required to pay |a reserve price for the targeted licences to demonstrate the seriousness of their intent to bid for the licenses and prove their financial strength.

The NTC's consultant suggested a reserve price of between US$100 million and $150 million per licence.

The board will also discuss whether qualified bidders should be required to have experience in offering mobile-phone services, as well as a total existing business value of at least Bt3 billion.

The NTC office suggests in its proposal that only Thai juristic entities be allowed to bid for licences. If the board permits consortiums to enter the bidding, they must be obliged to register to become juristic entities in the event that they win a licence, according to the proposal.

In addition, the proposal would require the board to mandate that bid-winners allow other telecom operators to lease the 3G networks.

The 3G licence winners will also be obliged to clearly separate their 2G business accounts, under state concessions, and their 3G accounts, under the NTC licences.

When it comes to the 3G network rollout requirements, there are two options in the proposal.

The first would make progress on network rollout and coverage dependant on actual market demand.

The second one is the universal access approach, which would require 3G operators to achieve extensive network coverage within a certain period. Those that fail to achieve the NTC's coverage targets would face punishment.

The proposal cites examples of this rollout requirement in other countries. One is Australia, which awarded 3G licences in 2000 to six bid-winners, who were required to establish networks covering 25 per cent of the population within three years.

In the UK, which awarded licences in 2000, winners were required to cover 80 per cent of the population by 2008, while Switzerland, which awarded licences the same year, mandated that winners cover 50 per cent of the population by late 2004.

The NTC proposal suggests licence terms of between 20 and 25 years.

Recently, Advanced Info Service and Total Access Communication each announced plans to spend between Bt5 billion and Bt10 billion per year during the initial stage on 3G network rollouts once they secure licences. CAT Telecom is also interested in bidding for licences.