True facing 3G number shortage

22 May 2012

Thailand’s True Corp is facing a shortage of new telephone numbers which could form a new obstacle in its plan to migrate its mobile users from the True Move network to its Real Move subsidiary, which offers the ‘True Move H’ 3G service over an 850MHz network in partnership with state-run CAT Telecom. 2G and 3G services on the original True Move network attract 30% revenue sharing costs under True’s build-transfer-operate (BTO) concession with CAT, while True Move H services are delivered via a series of contracts between True and CAT, under which True’s BFKT unit builds HSPA-based infrastructure and leases it to CAT, and in turn Real Move acts as a virtual operator by reselling the capacity offered by CAT under the True Move H brand. While the True Move H service allows True to operate outside of the BTO framework – giving it a headstart on rivals AIS and DTAC ahead of full 3G licence auctions later this year – it has additional motivation to migrate users from the older True Move GSM/W-CDMA network because its BTO concession runs out in September 2013. However, with CAT undergoing investigation by multiple state agencies for alleged non-transparency and other potential infringements related to the 14-year True-CAT deals struck in January 2011, the National Broadcasting and Telecommunications Commission (NBTC) has refused to award a block of 1.75 million mobile phone numbers out of 3.5 million new numbers allotted to CAT this year, the majority of which were earmarked to be passed on to Real Move, local newspaper The Nation reports. Direk Charoenphol, chairman of the NBTC’s number allocation committee, said CAT had refused to pay an overdue fee of THB6 million (USD191,000) for the first 1.75 million numbers, which fell due in April; CAT has withheld payment pending the probe into the legality of the public/private 3G partnership, despite two warnings from the regulator. Another NBTC source said that the watchdog would investigate how many numbers of the first lot are in use, and could potentially seize unused numbers (whether held by CAT or Real Move), or even all 1.75 million numbers if CAT continues to withhold fees.

CAT had originally requested five million numbers this year, mainly for the True Move H service but the NBTC approved only 3.5 million. True had said it expected to sign up four million True Move H users by the end of 2012. According to TeleGeography’s GlobalComms Database, there were 1.12 million True Move H customers at the end of March 2012 (up from 494,000 at end-December 2011), following its Bangkok launch in July 2011, full commercial launch in August and pre-paid launch in late-December, while there remained an estimated 300,000 True Move customers using 3G. True had 19.18 million GSM/W-CDMA mobile users altogether by end-March 2012, giving it 24.8% of the mobile market, while its Hutch CDMA unit acquired in January 2011 had dwindled to 170,000 users under a plan to phase out the service this year in favour of HSPA. True has previously proposed several options for its ‘legacy’ True Move operations when its BTO concession runs out next year, including a five-year network leasing plan with CAT, or purchasing the 2G infrastructure outright from the state-owned firm. It will also have to rebid for the network’s 1800MHz frequencies, although by then the structure of the sector will have altered significantly, with True, AIS and DTAC all aiming to be in possession of full operating concessions in the 2100MHz band, and a migration to the new 2100MHz networks expected to be in full swing. Meanwhile, CAT’s own retail HSPA service offered over the same network as True Move H has been a damp squib: by end-March 2012 CAT had 15,000 ‘My’ branded 3G subscribers, and it was claimed earlier this month that the service will be cancelled in the face of the ongoing legal inquiries. A threat of more direct consequences for True Move H was also aired when an anonymous member of CAT’s board of directors was quoted in a Thai language report as saying that, following the Thai ICT Ministry’s declaration of the CAT-True contracts as ‘illegal’, True may no longer be able to gain the necessary permission from CAT to import new HSPA network equipment. A further risk is posed by the National Anti-Corruption Commission’s ongoing investigation into whether CAT possessed the authority to delegate management of its 850MHz spectrum to True’s BFKT unit, or whether this action violated the Frequency Allocation Act.