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Telecom operators keen for next spectrum auction, 4G service

The telecom sector is anticipating the auction of the 1,800-megahertz spectrum some time this year, which if successful will bring a new choice to the mobile data superhighway in addition to the existing third-generation wireless broadband service.

The three private telecom operators and state agency CAT Telecom are all keen to bid for additional bandwidth, not only to enhance their 3G services but to offer fourth-generation service using LTE (long term-evolution) technology.

Settapong Malisuwan, vice chairman of the National Broadcasting and Telecommunications Commission, said that if possible, the NBTC's telecom committee wanted to hold the auction in the third quarter of this year, so the successful bidders could start setting up their networks before the end of 2014.

The NBTC will auction bandwidth of the 1,800MHz spectrum held by TrueMove and Digital Phone Co (DPC), whose concessions expired last September. At that time, the watchdog permitted them to continue serving existing customers for one more year to provide time for customers to migrate to other networks.

The regulator hired the International Telecommunication Union to conduct a study on the licensing of the 1,800MHz and other spectra under the state concessions. The study will be the NBTC's platform to draw up the auction plan.

A matter of concern

It remains to be seen if this upcoming auction will experience similar criticisms to those surrounding the auction of licences for the 2.1-gigahertz spectrum, which took place in October 2012 - the country's first spectrum auction. Several parties alleged a lack of meaningful competition among the three successful bidder - Advanced Wireless Network of Advanced Info Service DTAC TriNet of Total Access Communication, and Real Future of the True Corp group.

NBTC commissioner Prawit Leesatapornwongsa said the keys to ensuring proper competition included an appropriate reserve price and setting a maximum of the amount of bandwidth each bidders would be allowed to grab at the auction.

Jesada Sivarak, secretary to Settapong, said the price of 1,800MHz licences should be higher than for those on the 2.1GHz spectrum, as the cost of the 1,800MHz network roll-out would be considerably lower. Setting up the 900MHz network cost about half that of 2.1GHz.

What Jesada is concerned about right now is whether TrueMove and DPC will succeed in migrating their customers to other networks within the mandated one-year period set last September. If they fail do so, it will be difficult to formulate the auction plan. He added that in such a scenario, the NBTC would have to require the winners of 1,800MHz licences temporarily to oversee TrueMove and DPC customers who had failed to move to other networks.

At present, TrueMove still has about 13 million customers using its network, and DPC about 20,000.

Potential 4G demand

Real Future is the first and currently the only provider of commercial 4G service in Thailand. It introduced both 3G and 4G service commercially last May, using its 2.1GHz spectrum.

DTAC has said there is broad demand from its subscribers for 4G service, which promises enhanced mobile Web access, Internet-protocol telephony, high-definition and three-dimensional TV and other improvements over 3G. DTAC projected the number of its subscribers with 4G-capable devices to reach about a million by last month, and the company wants to respond to this pent-up demand.

A recent joint survey by CAT and South Korea's SK Telecom also found significant demand for 4G, especially among young urbanites.

LTE is the global standard for 4G, supported by all major players in the industry. LTE makes it two or three times as fast for mobile-phone users to make large downloads than on a 3G network.

LTE can also be deployed in many frequency bands ranging from 2,600MHz to 700MHz.

There were about 150 million LTE subscriptions worldwide in the third quarter of last year, a number expected to reach around 2.6 billion by 2019, according to a recent "Ericsson Mobility Report".

According to Bunyati Kirdniyom, head of communications and regulatory affairs at Ericsson Thailand, the 1,800MHz band is the most widely deployed in the world for LTE, used in more than 44 per cent of the LTE networks run by 108 telecom operators across 92 countries. This is the largest LTE-4G device ecosystem, which translates into economy of scale and a very high level of device affordability, which should directly benefit Thai consumers.

The Ericsson Mobility Report also anticipated the total number of mobile subscriptions worldwide to reach around 6.6 billion in 2013, and expected the number to hit 9.3 billion by 2019. Global mobile broadband subscriptions passed 2 billion last year, and are predicted to grow fourfold by 2019, reaching 8 billion.

The same report showed 80-per-cent growth in mobile data traffic between the third quarter of 2012 to the same quarter of last year, and this was expected to grow by 10 times between 2013 and 2019, driven mainly by video.

"Thai consumers and operators have already experienced similar data growth," Bunyati said. "With such enormous data growth, we can say that without additional spectra, operators may face challenges in planning, expanding and managing their networks to ensure affordable mobile broadband services to Thai society, especially in [densely populated] areas with heavy mobile broadband usage."

Many operators in developed markets for information and communications technology have multiple frequency bands, allowing them to build and operate a cost-efficient network infrastructure to assure affordable mobile broadband services for all, he said.


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