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Winning 3G bids in Thailand approved

Publication Date : 19-10-2012


Unfazed by a series of legal challenges, the national broadcasting and telecom watchdog yesterday officially approved the winners of Tuesday's 2.1-gigahertz (GHz) spectrum auction in Thailand and will hurry to grant licences to the three bid winners.

At the same time, the Finance Ministry sent a letter warning the watchdog that its spectrum auction did not comply with the ministry's e-auction rules and could be deemed as having helping private bidders grab the precious national resource at a low price at the state's expense.

Today, the three bid winners - Advanced Wireless Network of Advanced Info Service; DTAC Network of Total Access Communication; and True Corp's Real Future - are all expected to pick up letters to be issued by the National Broadcasting and Telecommunications Commission (NBTC) approving them as bid winners. They are also expected to quickly pay their up-front spectrum fees to the watchdog in order to obtain the licences and launch their 3G businesses as fast as possible. AIS has informed the NBTC that its subsidiary will pay 50 per cent of the fee today.

Finance Ministry deputy permanent secretary Supa Piyajitti said that under the ministry's rules, e-auctions must promote competition. As the Finance Ministry oversees the state procurement regulations, it must warn the watchdog on the matter, Supa said.

In an individual capacity, she also sent a letter to the National Anti-Corruption Commission (NACC) asking it to probe whether the auction breached the State Bidding Act 1999.

NBTC commissioner Prasert Silphiphat said the agency is ready to clarify all cases.

Commissioner Prawit Leesatapornwongsa said he remained concerned that collusion had occurred. If his suspicions are proven, he would file a petition with the NACC, he said.

Yesterday, four out of five members of the NBTC's telecom committee voted to approve the outcome of the spectrum auction. Those voting in favour of the bid result were telecom committee chairman Settapong Malisuwan, Suthiphon Thaveechaiyagarn, Prasert and Sukit Khamasundara, while Prawit voted against approving the result. The committee does not need the 11-member NBTC board to approve the result, as it is the duty of the telecom committee to grant the licences.

Prasert said that once the winners have obtained their letters from the NBTC, paid half of the spectrum fee and provided a financial guarantee that they can pay the outstanding amount, the watchdog will grant them the licence within seven days. The licence period of 15 years will commence on the date they pick up the licence.

Under the auction's terms, they can pay 50-per-cent of the up-front spectrum fee within 90 days after receiving the letter approving their successful bid, 25 per cent in the second year and the remainder in the third year.

Advanced Wireless Network paid a total of 14.625 billion baht (US$476 million) for three slots, while DTAC Network and Real Future both paid 13.5 billion baht for the three slots they each acquired.

"The 3G service fee will be low as required by consumers. In the next step, the committee will hurry to consider three draft regulations, infrastructure sharing, network roaming and the mobile virtual network operator [MVNO] system, which all passed public hearings. These regulations will enable the winners to offer the 3G service better and cheaper," Prasert added.

Also yesterday, the Administrative Court rejected two petitions against the NBTC filed separately by two groups over the 3G auction. The court argued that the plaintiffs were not the damaged party. The cases were brought to court by the Consumer Rights Protection Association, activist Admiral Chai Suwannaphap and others, who claimed that the lack of competition in the bidding would put consumers at a disadvantage.

The NBTC has faced mounting public pressure to guarantee reasonably priced 3G service, given the three bidders snatched the prized spectrum slots cheaply amid low competition, according to critics.

The telecom committee's meeting to vote to approve the outcome of the 2.1GHz spectrum auction saw a fierce argument pitting Prawit against the four commissioners who approved the result. Prawit argued that the committee should have increased the reserve price amid the potentially low competition. But his colleagues said it was time for the NBTC to move on, instead of wasting time talking about the price. Settapong allowed an audio broadcast of the meeting to be carried in the pressroom, citing transparency.

At the meeting, the committee had its legal team clarify point by point whether the auction breached any law or regulation, especially the law against bid collusion, which many parties claimed had been violated.

The legal team said the law focuses on whether there are attempts by bidders to block others from taking part in the price proposals, while the NBTC auction gave chances to all potential bidders to take part. Therefore, the auction did not breach this law, the team said.

NBTC auction design adviser Pacharasut Sujarittanonta added that there was no sign of any collusion during the auction.

The NBTC made available nine spectrum slots in the auction, each containing 5 megahertz of bandwidth at a reserve price of 4.5 billion baht. Each bidder could grab a maximum of three slots.

Out of nine slots available, six were grabbed at price at 4.5 billion baht each, unchanged from the reserve price of 4.5 billion baht. Telecom scholars have claimed that mistakes in the auction's terms and conditions allowed the three bidders to grab the maximum three slots each, and had created a low reserve price, thereby failing to promote strong competition.

*US$1=30.6 baht


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