NTC backs 2G plan; 3G auction remains on track for September

22 Jul 2010

The Thai government’s plan to convert the country’s three privately-owned mobile network operators’ build-transfer-operate (BTO) revenue-sharing concessions into full licences by the end of this year has received backing from the sector regulator, the National Telecommunications Commission (NTC). The Bangkok Post reports that the support came after talks were held yesterday between Prime Minister Abhisit Vejjajiva and the NTC’s seven board members to discuss the conversion proposal by Finance Minister Korn Chatikavanij and the Council of Economic Ministers, announced at the start of the week. The swift resolution followed Tuesday’s cabinet approval of proposals to set up a joint committee to look into the best way to convert the BTO concession contracts issued by state-run telcos TOT (to cellular market leader AIS, expiring in 2015) and CAT Telecom (to DTAC and True Move, expiring in 2018 and 2013 respectively).

The NTC’s compliance in the 2G scheme suggests that it will go along with the government’s plan to set 3G licence fees at 12.5% of operators’ revenues, the same level as that proposed for 2G concessions, which would replace the watchdog’s previous proposal of 6%. It has been feared that potential disagreement over this issue could delay the NTC’s auction for three 2100MHz full licences scheduled for the third week in September. The prime minister said after the meeting that the NTC board agrees with the proposal that was formally approved on Monday by the economic ministers, and that the commission will go ahead with its 3G auction in September. The NTC has submitted the 3G auction rules for publication in the Royal Gazette; Mr Abhisit said there is a time frame of 30 to 45 days for private operators to decide whether to enter a bid after publication.

On Tuesday the staff union of TOT (which stands to lose a large part of its earnings accounted for by BTO revenue-sharing, currently 30% of AIS’ sales) registered its opposition to the proposals, giving the reason that they ‘unfairly favoured mobile operators whose concessions will expire soon.’ The PM responded by saying that it was expected that some parties would disagree, but stressed that finding a solution was ultimately aimed at benefitting consumers. The NTC said interim licences of varying lengths could be issued to cope with the issue of differing BTO concession expiry dates.

Also in the news, AIS said it planned to spend THB45 billion (USD1.4 billion) over three years to install a third-generation network after it wins a licence. ‘We plan to spend about THB15 billion a year over the next three years after we get a licence,’ the cellco’s CEO Wichian Mektrakarn told Reuters yesterday. Investment in the first two years would help achieve 50% national coverage, whilst 80% coverage will be achieved in around four years, according to Wichian. In addition to network costs, the NTC has set the reserve price for a 3G licence at THB12.8 billion. AIS also said it agreed with the government’s 2G conversion proposals and was willing to cooperate to hasten the implementation of the plan.

Thailand, Advanced Info Service (AIS)