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Thailand 3G winners refute collusion claims

Publication Date : 30-10-2012


The three winners of slots at the recent 2.1GHz spectrum auction in Thailand yesterday publicly joined forces to refute allegations of bidding collusion, and urged the telecom watchdog to press ahead and grant much-needed licences to kick-start their massive investment in setting up third-generation cellular service.

The three cellular operators also said they were obligated to comply with the stated intention of the National Broadcasting and Telecommunications Commission (NBTC) to make it mandatory for them to offer low 3G service prices. As telecom operators, they had to comply with NBTC regulations, they said.

However, they could not yet say how much cheaper the fees would be, pending calculation of the actual overall costs each would face.

Executives of Advanced Info Service (AIS), Total Access Communication (DTAC) and True Corp said they had remained silent up to now about any allegations of bid collusion, as they were legally obliged to comply with the NBTC's silent-period rule.

However, now was the time to speak publicly about the matter, as the period had expired, they said, denying that the NBTC had forced them to hold a joint press conference to speak their minds.

It is believed that AIS and True first discussed the idea of speaking publicly on the issue, with DTAC then being invited to |join them in a three-way public presentation.

The three bid winners at the October 16 auction were AIS's Advanced Wireless Network, which paid a total of 14.63 billion baht (US$475 million) for three slots on the 2.1-gigahertz spectrum; DTAC Network, which paid 13.5 billion baht for three slots; and True Corp unit Real Future, which also paid 13.5 billion baht for three spectrum slots.

True vice chairman Athueck Asvanund insisted there had been no collusion among the bidders. "All of us are listed companies. If we break the law, we'll be put in jail," he said.

DTAC chief corporate affairs officer Darmp Sukonthasap said the company had waited for the auction to take place and was ready to compete with other bidders on the day.

The NBTC should now go ahead and issue the licences, he added.

AIS chief executive officer Wichian Mektrakarn said the NBTC was not "a used-car auction firm", so its role was not to mint as much as revenue as possible for the government, but primarily to regulate the industry, keep it healthy and ensure the utmost efficiency when it came to spectrum use.

The NBTC's telecom committee has yet to grant the three companies the essential spectrum licences, despite its official approval on October 18 of the outcome of the auction.

It set up a panel last week to probe alleged irregularities in the bidding in an apparent effort to stem mounting criticism of the lack of competition between the three bidders. The probe is scheduled to be completed in the next 15 days.

If no irregularity is found, the telecom committee will convene to consider granting the licences. Under the auction terms, it must grant the licences within 90 days of approving the bids.

Athueck said the NBTC auction process had been developed in accordance with regulations and followed a public hearing. He had thought there would be more than three bidders taking part in the auction.

True needs to acquire spectrum slots as TrueMove's 1,800-megahertz concession contract under CAT Telecom expires next September, he added.

When asked whether AIS had benefited the most from the auction, Wichian said that was perhaps the case, as the company is experiencing congestion on its 900MHz bandwidth, which it uses to serve more than 34 million customers.

At the recent auction, AIS selected the spectrum ranges adjacent to that of its concession owner, TOT. "We plan to join with TOT in the future," Wichian added, without elaboration.

Athueck said that while he could not tell who would benefit if the auction outcome were to be invalidated, consumers would certainly lose out. Should such a cancellation occur, it would be the second time the 3G auction process had failed.

"If this one also failed, who would take part in a new 3G spectrum auction?" he said.

The watchdog's predecessor, the National Telecommunications Commission, was set to hold a 2.1GHz spectrum auction in September 2010, before it was suspended by a Central Administrative Court injunction after CAT Telecom's legal challenge of the NTC's licensing authority.

Athueck said that if any bid collusion were to be found, then the outcome should be annulled. Like Darmp, he believes that competition among the three winners in providing 3G service will be crucial to their offering low fees to consumers.

The 3G auction on October 16 has been slammed by many parties, from telecom scholars to Finance Ministry officials, for letting the three cellular firms snap up the spectrum slots at low prices, because of the perceived lack of meaningful competition. The result is a major cost to the state coffers, they maintain.

Of the nine 2.1GHz slots available, six went for exactly the reserve price of 4.5 billion baht each.

Telecom academics said mistakes in the auction terms and conditions had allowed each bidder to secure the maximum of three slots apiece and, as the NBTC had also set a low reserve price, there was a subsequent failure to promote strong competition.

Last week, the National Anti-Corruption Commission (NACC) appointed a subcommittee to probe whether the NBTC telecom panel's approval of the bid results had breached the State Bidding Act. This followed a petition to the NACC by the Senate's corruption inquiry and good-governance committee on the matter.

In a further development, 10 senators and TOT's labour union yesterday filed separate petitions to the Office of the Auditor-General, requesting that it have the Administrative Court rule on the legality of the auction.

*US$1=30.7 baht


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