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Thailand to go ahead with 3G auction today

Publication Date : 16-10-2012

 

Thailand's long-awaited auction of the 2.1-gigahertz spectrum slots will go ahead as scheduled today after the Central Administrative Court rejected telecom scholar Anupap Tiralap's petition for an injunction to suspend the bidding.

However, the National Broad-casting and Telecommunications Commission (NBTC) is getting ready to deal with possible lawsuits stemming from its decision to go ahead, NBTC secretary-general Takorn Tantasit said. He added that people could take cases to the Office of the Auditor-General, the National Anti-Corruption Commission or to court if they believed the auction's outcome would affect public interest.

The auction will be closely monitored to see if it is competitive because many fear it may attract few bids and that this will result in a lower net return.

A telecom analyst estimated that the three bidders - Advanced Info Service's subsidiary Advanced Wireless Network, Total Access Communication's DTAC Network and True Corp's Real Future - would end up offering only 15 billion baht (US$488 million) to grab the maximum three slots allowed, given that there are enough slots available. Proceeds from the auction are meant for state coffers.

The auction is expected to set in motion further liberalisation of the telecom industry from state concessions via the granting of the 2.1GHz spectrum and licences to private operators. If the operators can grab a licence, they can be ensured of being able to continue with the business even after their concession comes to an end.

Each of the three bidders is expected to spend between 40 billion and 50 billion baht to establish third-generation cellular networks in the first three years. They are expected to start service in the first half of next year once the NBTC grants licences in January. Telecom operators have been waiting for the allocation of 2.1GHz spectrum for almost a decade since the National Telecommunications Commission was established.

Anupap wanted the court to suspend the auction on grounds that the terms and conditions lacked measures defining 3G quality standards, a cap on 3G data-service fees, guarantee of equal 3G access to all Thais and an explanation of how the auction's proceeds will be used to benefit the public.

The Administrative Court yesterday ruled that the complainant was not the damaged party yet, because the expected damages had not actually taken place. The court suggested he file a petition with the Ombudsman's Office if he believed that the NBTC failed to follow the Constitution and relevant laws. It said the Ombudsman's Office could decide to take the case to court if there were enough grounds.

The court yesterday also dismissed a request for urgent inquiry filed by political activist Suriyasai Katasila, saying it would decide later whether the case was worth considering further.

Suriyasai, from the Green Politics group, sought to suspend the auction over concerns of possible bid collusion and a very low reserve price for the auction. He feared that if the auction goes ahead, it will see low competition in the bidding process and could cost the country several billion baht.

His assumption is based on the difference of the reserve price of 4.5 billion baht per slot of 5 megahertz bandwidth and 6.4 billion baht set as the full price.

Meanwhile, share prices of AIS, DTAC and True dropped during yesterday's morning trading session before rebounding in the wake of the court's decision in the afternoon. AIS shares yesterday closed at 202 baht, unchanged from Friday, while DTAC shares closed at 88.25 baht, up 1.4 per cent. True's shares remained unchanged, closing at 5.60 baht.

The NBTC will put nine spectrum slots, each containing 5MHz bandwidth, up for auction at a reserve price of 4.5 billion baht. Each bidder is allowed to grab a maximum three slots or a total of 15MHz bandwidth. The auction will be divided in two phases - selecting the desired spectrum slots and allowing the bidder offering the highest price to be the first to choose the desired slots.

*US$1=30.7 baht

 

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