Thursday, October 1, 2009

Thailand's 3G auction may be held on Dec 8

The national telecom regulator has set December 8 as the tentative date for the auction of four 3G-2.1GH licences, commissioner Sethaporn Cusripituck said yesterday.

A source at the National Telecommunica-tions Commission said the NTC expected to finalise the range of the reserve price for each licence at between US$150 million and $200 million (Bt5 billion-Bt6.7 billion).

The reserve price is the minimum amount the NTC expects to gain from each licence auction.

The watchdog will hold a board meeting next Wednesday to finalise the details, including the auction date, reserve price and bid starting price.

Sethaporn said the board would discuss whether it would reveal the reserve price, and whether the reserve price and the starting bid price should be the same.

The meeting will also see the watchdog finalising the contingency plan in the event of the number of those qualified to bid for the four licences being the same as or lower than the actual number of licences.

The NTC is concerned that if this were to be the case, there would be no genuine competition in the bidding.

Sethaporn said that if this were to happen, the NTC might not inform the qualified bidders of the number of bidders they are contending with. It might also surprise them by putting up fewer than four licences in the auction, in order to promote competition.

NTC secretary-general Suranan Wongvithayakamjorn said investors from India, Malaysia and Indonesia had asked the NTC for details of the auction, but he declined to specify their names.

NTC member Sudharma Yoonaidharma said he was opposed to holding the 3G licence auction so soon, as the national regulator had yet to come up with much crucial information for potential bidders.

He said that before the auction, the NTC should provide a comprehensive map of the details of all telecom networks in Thailand, so that those who are not current operators could clearly ascertain where they could roll out networks should they be awarded a licence.

He added that the NTC auction plan seemed to favour incumbent operators. Moreover, it seems the NTC's granting of the 3G licences has been publicly perceived as a way for the private telecom concession |holders to move customers from the concessions to the 3G licences in order to reduce their costs.

The private mobile-phone concession holders have to pay an average of 20 per cent of their revenue to one of the state concession owners, TOT and CAT Telecom. A 3G licence, however, is expected to cost them 6 per cent of their revenue per year.

Sudharma said he wanted to see Thai companies having a chance to win or share in the benefits from the 3G licences. He stressed that he did not mean True Corp, as True is a giant Thai telecom operator, but rather the smaller domestic companies.

In the NTC's public hearing on 3G licence and auction conditions this past Monday, True strongly opposed many points, including licences being granted via the auction process, citing that the method favoured large companies over smaller operators.

Senator Anan Woratitipong yesterday said the 3G licence auction would stimulate economic growth, given that it would lead to huge investment by bid winners in terms of licence payment and then network roll-out, which would create jobs.

Anan does not expect the auction bidding to rise too high.

The NTC, which marked its fifth anniversary yesterday, has invited Prime Minister Abhisit Vejjajiva to give a speech on Monday on the role of the independent regulator in the country's development.

Meanwhile, the watchdog returns money to the state coffers every year after deducting expenses from the regulatory fees it collects.

NTC deputy-secretary-general Takorn Tantansit said it had returned Bt158 million in the first year of establishment, Bt839 million in the second year, Bt795 million in the third and Bt2.6 billion last year.

It is expected to return Bt1.3 billion to the government this year.

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