The government yesterday quickly approved a nationwide 3G-network roll-out by state-owned TOT, following the court-ordered suspension last week of an auction of third-generation licences.
Private telecom firms, which had earlier planned to bid for new licences from the national telecom regulator, cried foul, suggesting it was unfair competition. Yet, they will have no better choice but to join the state bandwagon via partnerships with TOT.
The TOT project will cost Bt19.98 billion. According to the Cabinet resolution, the Finance Ministry will not guarantee any loan for the project, while TOT will set up a new subsidiary to handle investment in partnership with the private sector. TOT is expected to start the bid to procure the network within three months.
Thana Thienachariya, head of corporate affairs and strategy at Total Access Communication (DTAC), said the TOT move was unfair to other private operators.
TOT got the 3G-2.1GHz licence without bidding. Analysts said it had gained a huge concession fee from private telecom operators and now it is allowed to go ahead with the 3G service nationwide. Private telecom firms still have to wait for 3G licences from either the National Telecommuni-cations Commission (NTC) or its would-be successor, the National Broadcasting and Telecommuni-cations Commission (NBTC).
The now-defunct State Frequency Allocation panel granted the 1,900 MHz spectrum band, of which the 2.1GHz spectrum is a part, to be jointly owned by TOT and CAT in 2000. Subsequently, TOT took over the spectrum rights from CAT to become sole spectrum owner. It now uses the 2.1GHz spectrum to provide the service on its existing Greater Bangkok network.
TrueMove chief Supachai Cheara-vanont said the country should quickly start the 3G-2.1GHz service but the government and NTC had to ensure fairness to private operators as far as roaming and other shared use of the new 3G network were concerned.
Wichien Mektrakarn, chief executive of Advanced Info Service (AIS), said that since the NTC 3G licensing has been delayed, AIS would push its plan to have its maximum 500,000 subscribers roam with TOT's existing 3G network for data service. Both parties had had discussions though a deal was yet to be signed.
AIS would also hold talks with TOT to become its mobile virtual network operator (MVNO) on the planned nationwide network, he said.
The MVNO had no network and would lease networks of the major telecom operators to provide the service.
As a TOT concession holder with "good long-term relations", AIS hoped it could take part in helping TOT develop the 3G service in the future. He denied that AIS would be the only one to benefit from the TOT 3G network.
Watchai Vilailuck, president of Samart Corp, said yesterday the company was interested in providing and installing the network for TOT.
ICT Minister Chuti Krairiksh said the roll-out would cover 12 provinces for Greater Bangkok, to reach 50 per cent of total handset users. The Cabinet also told TOT to allow foreign network suppliers without offices in Thailand to bid for the project.
HIGH COST
TOT president Varut Suvakorn said yesterday that TOT would rush to find a consultant to get a loan for the project. He admitted the financial cost would be high because the Finance Ministry had refused to guarantee the loans. He said lenders could be Thai or foreign banks, including Krung Thai Bank, depending on who offered the best terms.
TOT would also rush to seek a consultant to draw up a business plan, including an MVNO plan, and a plan to set up the 3G subsidiary. It would hasten to draw up terms of reference (TOR) to procure the network and present it to the board on October 14.
"All of these things will be completed within three months," he said.
Of the total Bt19.9-billion budget, Bt17.44 billion would be for procuring the network equipment and the rest to pay suppliers for expanding its existing 3G network in Greater Bangkok. Of the total Bt17 billion, Bt15 billion would be raised through bank loans and the rest would come from TOT's cash-flow.
TOT intended to finish the roll-out of 4,772 base stations of the planned 5,320 base stations within 360 days of signing the network procurement and installation contracts.
After the nationwide roll-out was done, TOT would seek partners for the planned 3G subsidiary and it was possible the partners could be the existing telecom operators, Varut said. The network targets 7.4 million subscribers by 2015, when it expects to have an 8-per-cent market share. It expects to break even within seven years.
TOT's existing 3G-2.1GHz network in Greater Bangkok made its debut last December. It has selected five companies to provide 3G services on its network on an MVNO basis. Currently the network has around 140,000 active subscribers.