Will Thailand hold a 3G licence auction this year? Probably not. The Thai telecommunications regulator National Telecommunications Commission (NTC) is – again – planning to hold a 3G licence auction, this time in September. However, original issues that prevented the auction from going ahead last year have not yet been resolved, making it unlikely that the auction in September will actually take place.
The NTC plans to auction off 3G licences in the 2.1 GHz spectrum in September this year. The NTC will be auctioning off three licences, each with a 15-year term. The licences are in 15 MHz blocks and the starting price has been set at THB 12.8 billion. However, state-owned operators fear that the 3G licences may impact on their concession income from private operators.
There are two state-owned operators offering communications services in Thailand: TOT and CAT Telecom. Furthermore, there are several private operators that operate under a build-transfer-operate concession using TOT's and CAT's spectrum, namely TrueMove, DTAC, and Advanced Info Service (AIS). Under the concession agreements, the private operators share 20 to 25 percent of their revenues with TOT and CAT, who rely heavily on this income. Problems with the complicated concession scheme have been highlighted with the recent supreme court ruling in the Thaksin Shinawatra asset-seizure case. The supreme court found that ousted prime minister Shinawatra continued to hold shares in Shin Corp while he was prime minister between 2001 and 2006 and that he abused his authority to enact policies that benefited the company and its subsidiaries. A point in the case involves the 2001 amendment of AIS's concession by its concession-owner, TOT, to allow AIS to reduce the share of its prepaid phone revenue paid to TOT to a flat rate of 20 percent for the rest of its life, from 25 to 30 percent originally. A panel is studying the amendments of several companies, including AIS, however progress has been slow due to the frequent changes in panel members.
The state-owned operators fear that the private operators will move their 2G customers to their 3G networks to save on revenue-sharing payments, which would not apply to the 3G network. However, the finance ministry – which owns TOT and CAT Telecom – and the ICT ministry have jointly decided that the 2G concession agreements will be converted to a licensing scheme, similar to the planned 3G licences. Prime minister Abhisit Vejjajiva is supporting the NTC's 3G plans but has said the concession issue needs to be resolved first. A joint committee made up of representatives of the ICT ministry and finance ministry are looking into the legal issues surrounding the conversion plan which is expected to take at least one month, Abhisit said on 25 July.
The 2G concession conversion is not the only issue plaguing the NTC's auction plan. As 3G can be used for communications and broadcasting applications, a new regulator is supposed to be formed called the National Broadcasting and Telecommunications Commission (NBTC), which would combine the NTC and the National Broadcasting Committee. The house of representatives approved the bill on the establishment of the NBTC in March this year and the senate in April, before sending it to a 35-member panel for further study. The bill is expected to be returned to parliament in August for passage. The bill passed by the house called for eleven NBTC members but the senate has recommended fifteen members – a move which has been criticised as this would make the Commission unwieldy. Commission members will be sought with backgrounds in security, public administration, religion, social development, telecommunications sector, law, economics, education or culture, and consumer protection.
The members would be selected from 44 candidates in two stages. First, various organisations will select 22 candidates. Second, a panel government, academia, and consumer panel will select another 22 candidates. Altogether, 44 candidates will be nominated to the senate, which will then have 180 days to name the fifteen Commission members. Importantly, members of the NBTC must not be, or have been, executives, employees, consultants or shareholders in telecommunications or broadcasting businesses for at least one year to eliminate potential conflicts of interest. However, this is expected to make it difficult to find qualified candidates.
The timing of establishing the NBTC and the 3G spectrum auction is tight, to say the least. It seems unlikely that the finance ministry, the ICT ministry and operators will be able to navigate the legal quagmire that is Thailand's concession scheme before the planned 3G auction in September. It also seems unlikely that the new regulatory body, the NBTC, will be up and running before September. Furthermore, since the establishment of the new regulator is now so close, it is likely the government will ask the NTC to wait with issuing 3G licences until the combined regulator has been set-up and commissioners appointed. All in all, it is unlikely that Thailand will issue 3G licences in September, or indeed, this year.
