Govt offers to mediate disputes over 4G auction

Corporate March 20, 2015 01:00

By Usanee Mongkolporn,

Sirivis

2,850 Viewed

The government will act as a mediator in the dispute between the National Broadcasting and Telecommunications Commission (NBTC) and some state enterprises over whether they can transfer frequencies to the spectrum licensing body for auctioning.



Information and Communications Technology Minister Pornchai Rujiprapa said yesterday that if the state enterprises agree to let go of their spectra before expiry of their concession contracts, they should be compensated.

However, some state enterprises should be allowed to keep part of their bandwidth to provide public services.

Telecom operators say they are ready to bid for all bands.

Pornchai said that first, the NBTC would have to provide to the ad hoc National Digital Economy Committee all the details of potential spectrum auction and any problems they were facing. Then the NBTC could go ahead and tender the spectrum bands that have no such problems.

For the spectra that the state holders do not want to relinquish early, the government will step in to mediate a solution.

Some frequencies, such as TOT’s 900-megahertz spectrum, by law have to be transferred to the NBTC after a concession ends. However, if the government finds that TOT needs to keep the band to provide public service in remote areas, it might let TOT keep part of it and relinquish the rest for auction.

Then the government will make up the difference for the NBTC by asking other state enterprises to give up their spectra early, such as the 2.6-gigahertz bands, to the commission for auction in return for compensation.

The ad hoc committee on Wednesday instructed the NBTC to resume planning for the auction of spectrum licences and to complete the process in August.

The NBTC can auction any frequencies ranging from 900MHz-1,800MHz and 2.6GHz. It also has to submit the progress of the auction plan for the committee’s consideration every month.

The NBTC had intended to open bidding for the 1,800MHz bands of TrueMove and Digital Phone Co in the middle of last year, followed by 900MHz of Advanced Info Service (AIS) in the same year. But in July, the junta ordered the NBTC to hold off the auction for one year, pending thorough clarification of the auction plan.

These spectra can be used for fourth-generation wireless broadband service.

On Wednesday, Takorn Tantasith, secretary-general of the NBTC, said the commission was ready to start the auction in five months.

However, an NBTC source said there could be a delay if the auction plan is not approved by the ad hoc committee and needs to be revised.

Sigve Brekke, interim chief executive officer of Total Access Communication (DTAC), said his telecom was interested in both 1,800MHz and 900MHz. He is happy that the government has finally decided to go forward with the auction this year.

"Customers demand more data services and the industry is ready to invest," he said.

Pratthana Leelapanang, an executive vice president for AIS, said the decision of the ad hoc committee on Wednesday was good news and AIS is ready to bid for all spectra to be put on the block.

A telecom analyst said that if the auction really takes place and AIS can grab a licence, True Corp would risk losing its current large competitive advantage in bandwidth.

If the auction does not take place this year, without additional bandwidth, AIS is expected to face a shortage that should erode its service quality by early next year.

AIS stock yesterday closed up 1.21 per cent at Bt251, while DTAC surged 3.56 per cent to Bt87.25 and True was unchanged at Bt13.

Somkiat Tangkitvanich, chairman of the Thailand Development Research Institute, said the military regime might come up with a surprise later after giving the nod to the 4G spectrum licences on Wednesday.

For example, last year, when the NBTC was preparing the auction plan, the junta ordered the commission to suspend it.

The government should be closely watched for how it will proceed to reclaim spectra from some state enterprises, such as the 2.6GHz frequency from MCOT, which is listed on the Stock Exchange of Thailand, in a manner that will not derail the auction plan.

The regime should think carefully before making any decision or it would throw off investor confidence, Somkiat said.

It is unclear whether the NBTC would still have the power to hold the auction if the laws promoting the digital economy, including the new NBTC Act, take effect before August.

It is also doubtful that the auction would see meaningful competition, since there would likely be only three telecom operators participating, just like for the auction of the 3G licences, he said.