Thai Finance Minister Korn Warns Of Danger If 3G Auction Goes Ahead

[webfact]

Korn warns of danger if 3G auction goes ahead

The Nation on Sunday

Finance Minister Korn Chatikavanij yesterday expressed concern that there could be significant damage if the controversial auction of 3G (third generation) mobile telecom licences goes ahead as earlier planned.

His comment followed the Central Administrative Court's injunction to delay the auction, due to be held by the National Telecom Commission (NTC), over the coming week.

The NTC, on Friday, lodged an appeal with the Supreme Administrative Court in the hope of overturning the injunction so it can go ahead with the auction of two licences, each of which has a minimum price of Bt12.8 billion.

The high court will issue a ruling on the appeal at 8.30am tomorrow.

The NTC said yesterday it would postpone the 3G licence auction by 2-3 days if granted permission to proceed with the auction. In a 16-page verdict issued last Thursday, the Central Administrative Court said there would be a number of obstacles ahead if the 3G licence auction was allowed to proceed now, because the NTC itself was in a transition phase, awaiting the formation of a new regulatory body.

According to the 2007 Constitution, the authority to manage the radio frequencies that would be used by 3G licensees, rests with the National Broadcasting and Telecom Commission (NBTC).

The NTC will be replaced by the new body when the NBTC bill, now pending in Parliament, is enacted into law.

Finance Minister Korn said it would be a loss of opportunity if the licence auction was postponed. However, there would be greater damage if it emerged later on that the NTC did not have the authority to hold the auction in the first place. Once the NBTC is set up, the new regulatory body could then hold the auction, Korn said, noting that the delay could be around three to four months.

The finance minister also hoped that the current 2G (second-generation) telecom concessions granted by stated-owned CAT Telecom and TOT could be converted into licences after the NBTC becomes operational.

The government had feared that both CAT and TOT would be losers if their 2G concessions were not changed into licences soon - largely because consumers (mobile users) were likely to shift to the new 3G network. Both CAT and TOT are owned by the Finance Ministry and supervised by the Information, Communication and Technology Ministry.

CAT also told the court that it would be damaged if the 3G auction went ahead. TOT also filed a separate petition before the court, opposing the auction.

Both CAT and TOT own 2G concessions now used by the major mobile firms - AIS, DTAC and True, which have been keen to bid for 3G licences. The existing 2G infrastructure would be returned to the state when the concessions expire in three to eight years.

Meanwhile, Pichai Naritapan, a member of the opposition Pheu Thai Party's working group on economic affairs, said it would be a loss of opportunity for the country if the 3G licence auction was further delayed.

"The new 3G network will allow new investment and services which would help develop the country. For example, it will provide high-speed mobile Internet service to students in rural areas where otherwise there is no access to the Net.

-- The Nation 2010-09-19

[RickBradford]

Could somebody rewrite this in English? Or does it defy description?

[Crushdepth]

Finance Minister Korn said it would be a loss of opportunity if the licence auction was postponed. However, there would be greater damage if it emerged later on that the NTC did not have the authority to hold the auction in the first place.

You mean the government doesn't *know*? They didn't think to *check* the legislation before organising this lucky draw? Can they really be that f@#$!ng incompetent?

[whybother]

Could somebody rewrite this in English? Or does it defy description?

Which part don't you understand?

Basically it says that Korn thinks that they should wait the 3 or 4 months until the NBTC is set up (legislation is currently before parliament) because of the possibility that the NTC may not have the authority to sell the licences (probably because the of the NBTC laws currently before parliament).

It then talks about 2G "concessions" being converted to "licences". You would need to do some research to understand the difference between the two.

And Korn and Pichai (and most other people) think that a delay will be bad for the country.

Clear as mud.

[gotlost]

Damage equals Money. Still like a bunch of little kids arguing over who gets the biggest piece. In the mean time the people get the shaft, as usual.

[Thaihog]

Could somebody rewrite this in English? Or does it defy description?

Which part don't you understand?

Basically it says that Korn thinks that they should wait the 3 or 4 months until the NBTC is set up (legislation is currently before parliament) because of the possibility that the NTC may not have the authority to sell the licences (probably because the of the NBTC laws currently before parliament).

It then talks about 2G "concessions" being converted to "licences". You would need to do some research to understand the difference between the two.

And Korn and Pichai (and most other people) think that a delay will be bad for the country.

Clear as mud.

It beggars belief that the Thai economy is so strong when you see some of the comments from Government Ministers.

Somebody must be doing a good job of 'cooking the books'

[TheWhiteFella]

By the time Thailand has 3G it will be obsolete

[RickBradford]

Could somebody rewrite this in English? Or does it defy description?

Which part don't you understand?

Basically it says that Korn thinks that they should wait the 3 or 4 months until the NBTC is set up (legislation is currently before parliament) because of the possibility that the NTC may not have the authority to sell the licences (probably because the of the NBTC laws currently before parliament).

It then talks about 2G "concessions" being converted to "licences". You would need to do some research to understand the difference between the two.

And Korn and Pichai (and most other people) think that a delay will be bad for the country.

Clear as mud.

The source of my confusion is this:

In most countries, the government telecom regulator creates an open spectrum auction for operators, who then go ahead with building networks and offering services.

But I'm not even sure who the regulator is in Thailand - is it NTC, NBTC, or CAT. Or TOT? And what is the regulatory balance between state-owned operators and companies like AIS, DTAC - are they free to compete with one another?

It's obviously more complex than I imagined -- maybe it's more complex than I can imagine.

Or is the answer simply TiT?

[hammered]

Hardly anyone seems to understand this. It seems the auction has been stopped because a law that is currently not a law but pending parliamentary approval will change things so now laws that arent laws set the tone, and additionally CAT and TOT must be protected at all cost to the country.

Everything in Thailand ends up tied up in courts. It seems there is nothing that can happen without masses of never ending legal challenges that nobody can predict the outcome of. This is counterproductive to investment and seems to be getting worse here as other countries make things easier. For Thailand to improve competetiveness in the future it needs to move away from this overly legalistic bureaucratic approach. The vested interests and power of the bureaucracy needs to be reduced and the legal framework simplified with a move away from a culture of going to court on everything

[Pib]

Maybe Korn already knows (or at least highly suspects) what the court ruling is going to be Monday morning. That is, the ruling is going to say the government doesn't have the authority to issue 3G licenses until the NBTC is established as required by the 1997 Constitution, which the pending bill in Parliament is trying to do. It's just amazing how the government starts multi-billion baht processes/programs with such gapping holes in the authority to do such. But this is a good way to create money pits. It's also a great way to keep the "you gotta be kidding me" pot continously stirred.

[Phuket Stan]

Hardly anyone seems to understand this. It seems the auction has been stopped because a law that is currently not a law but pending parliamentary approval will change things so now laws that arent laws set the tone, and additionally CAT and TOT must be protected at all cost to the country.

Everything in Thailand ends up tied up in courts. It seems there is nothing that can happen without masses of never ending legal challenges that nobody can predict the outcome of. This is counterproductive to investment and seems to be getting worse here as other countries make things easier. For Thailand to improve competetiveness in the future it needs to move away from this overly legalistic bureaucratic approach. The vested interests and power of the bureaucracy needs to be reduced and the legal framework simplified with a move away from a culture of going to court on everything

Great post once again....but you forgot to mention the queues at the troughs...

Such a shame...a country with unlimited potential tied up in 19th centuary politics

Ahh well such is life ...it still is a better to place to live than most...just keep the head below the parapet at all times

[asiawatcher]

Why are we even dealing with 3G when 4G is already happening. Backward in thought and process. Drop it and go straight to 4G or we will remain in the backwoods forever due to corrupt assh*les trying to figure out the best way to skim off the top! Do this - wait 12 months then introduce the next level so they can double dip in the pie! Mentality of imbeciles.

[whybother]

Why are we even dealing with 3G when 4G is already happening. Backward in thought and process. Drop it and go straight to 4G or we will remain in the backwoods forever due to corrupt assh*les trying to figure out the best way to skim off the top! Do this - wait 12 months then introduce the next level so they can double dip in the pie! Mentality of imbeciles.

From what I understand, there is no 4G standard yet. There are enhanced 3G services (UMTS) or "pre-4G" services (HSPA+, LTE), but no standard 4G yet.

[TAWP]

I still like the part about:

The government had feared that both CAT and TOT would be losers if their 2G concessions were not changed into licences soon - largely because consumers (mobile users) were likely to shift to the new 3G network. Both CAT and TOT are owned by the Finance Ministry and supervised by the Information, Communication and Technology Ministry.

I.e. a bad thing [for the consumers] was set up in the past where the actors involved could get a lot of money (I am refusing to say 'the government' only since that would indicate that the money wasn't lost in big amounts on the way, by the actors CAT, TOT and MICT) and the piggies refuse to lose a big source of income to pay for the lavish spending's on the consumers bill.

So now they refuse to let go of this even if it is a bad thing for the people they are supposed to look out for (esp. in the case of MICT).

I mean, surely you have heard the lie that the government [in any nation ] is for the people?

[livinthailandos]

So lets see tomorrow results, but based on what I'm reading here and from other newspaper sources basically NTC doesn't have any authority to authorize the auction it seems that and your lovely TOT & CAT government companies don't want to miss out on losing lots of money that a new 3G licenses, concession fee's won't bring them. Does anyone else get the feeling that your TOT & CAT really don't even want 3G to ever happen. So now they will have to wait till the newly formed NBTC is formed. Which with anything relating to thailand and government ministries is a utter joke. Basically it seems 3G may not even start this year, maybe next year, although this keeps sounding really familiar though.

Maybe tomorrow I'll be proven wrong and the actual 3G bidding and license will begin but if it doesn't nobody will really not be suprised.

[tomyummer]

I always cringe when reading about dialogue between government agencies/departments. And yet again, nobody bothers to do an analysis or research on the ramifications of such an auction? Typical of the Thai government on acting before studying. As always, only one thing in sight....revenue.

1) I think that the government should just issue the licenses to any telecom company that serves a minimum amount of the population (as a qualifying standard), say 10 million customers. So that would automatically allow AIS, DTAC, and TRUE to obtain licenses. Set the fee to a reasonable amount to allow these companies to set-up their systems to serve their customers.

2) The government agency can then cap a fee that can be passed on to the customers via the telecoms with a minimum margin allowed to be made by the companies. The government tax should only be based on the total amount of phone usage per month as a percentage of the whole invoice as currently implemented.

If this auction goes on, it is in the short term benefit of the government which will just get a crap load of money up front (and commissions for the usual thieves) and screw the mobile consumer who will have to pay for it in the end via the telecom companies. They'll just pass it on to us without any oversight from the government.

The government should make their money after the launch of an adequate system over time through the consumer invoices. For all we know the system that we'll be paying for might not even work sufficiently in the beginning, yet we the consumer will be charged for it. Like in the typical Thai style, we'll be the ones getting screwed yet again.

I wish (oh jeannie in a bottle) that this government would be smart enough to study all options before doing things. It just makes them look that much more incompetent then they already are!

[samran]

Could somebody rewrite this in English? Or does it defy description?

Which part don't you understand?

Basically it says that Korn thinks that they should wait the 3 or 4 months until the NBTC is set up (legislation is currently before parliament) because of the possibility that the NTC may not have the authority to sell the licences (probably because the of the NBTC laws currently before parliament).

It then talks about 2G "concessions" being converted to "licences". You would need to do some research to understand the difference between the two.

And Korn and Pichai (and most other people) think that a delay will be bad for the country.

Clear as mud.

The source of my confusion is this:

In most countries, the government telecom regulator creates an open spectrum auction for operators, who then go ahead with building networks and offering services.

But I'm not even sure who the regulator is in Thailand - is it NTC, NBTC, or CAT. Or TOT? And what is the regulatory balance between state-owned operators and companies like AIS, DTAC - are they free to compete with one another?

It's obviously more complex than I imagined -- maybe it's more complex than I can imagine.

Or is the answer simply TiT?

Once upon a time there was just the "government" with its state owned enterprises CAT and TOT. The government set the policy, regulated the sector and via CAT and TOT operated everything, as they were the only ones allowed to.

Over time CAT and TOT saw themselves as more than operators, they were also the reglators and to an extent, co-policy makers....not a good set up as there is an inherent conflict of interest in playing multiple roles.

Fast forward to post Asian financial crisis and the need for Thailand to undertake some micro economic reform - essentially deregulating the telco sectors to make the sector more responsive to consumer needs.

The idea was for the government to remain the policy maker, spin off operations (ie CAT and TOT and new commers) to a seperate 'independent' organisations, and the NTC as the independent competition watchdog of the sector as well as granting licenses independently of government pressure. I presume it was supposed to have the authority to auction off spetrum licenses as well.

TAT and CAT didn't like the NTC taking away their powers of regulation. Neither did a bunch of economic neanderthal burecrats. The ones who understood the implication of the NTC (ie Thaksin) spent most of his terms in office trying to stack the NTC with 'his' men so the NTC would be his little play thing.

What we have ended up with is an NTC not so much stacked with cronies, but it stacked with academic types who are vying for power with all the other groups.

Cue (mainly) CAT who view the establishment of the NTC and the deregulation of the industry as the final nail in its coffin. With no raison d'etre any more, but as a 'powerful' SOE vested with a bunch of authority not quite taken away by the NTC yet, it is going kicking and screaming to its grave.

A very simplified overview of what is going on.

[Pib]

Not only screaming and kicking "to" the grave, but also kicking and screaming "in" the grave. Govt agencies/unions are probably the hardest thing to truly kill....even wooden stakes and silver bullets don't work on govt agencies/unions.

[Crushdepth]

Maybe I'm wrong, but I am sure I saw an announcement a few months ago that Parliament had actually passed the legislation to set up the NBTC.

Regardless, if the government didn't have the authority to hold an auction the relevant department should have advised them of this shortly after this flaky plan was hatched and way before anyone decided to announce it. If they didn't then its time to fire the braindead zombies responsible.

This debacle appears to support my theory that Thai 'governments' actually don't have much power or control over the country. They're good at issuing grandiose policy statements but very little actually gets done. The country wobbles on regardless of whose in charge.

Remember Abhisit's announcement about the government 'accelerating 3G'?

[RKASA]

Maybe I'm wrong, but I am sure I saw an announcement a few months ago that Parliament had actually passed the legislation to set up the NBTC.

Regardless, if the government didn't have the authority to hold an auction the relevant department should have advised them of this shortly after this flaky plan was hatched and way before anyone decided to announce it. If they didn't then its time to fire the braindead zombies responsible.

This debacle appears to support my theory that Thai 'governments' actually don't have much power or control over the country. They're good at issuing grandiose policy statements but very little actually gets done. The country wobbles on regardless of whose in charge.

Remember Abhisit's announcement about the government 'accelerating 3G'?

Yes it was all for the sake of the kids and stuff. Wireless - this same excuse is what we get from ToT and CAT for ten years . The reason they can't spring some of the 100's of billions they have collected from telco's already to give us real service. Now we still don't have ether. Just run the F cables and be done. If its competition from other providers that is a problem, then why make me wait for wireless when I could have your ADSL now. Dtac does not have it nor does AIS Dumb and Dumber

[Igor]

From what I understand, there is no 4G standard yet. There are enhanced 3G services (UMTS) or "pre-4G" services (HSPA+, LTE), but no standard 4G yet.

Japan has 4G. I believe Korea does. Norway, Sweden? Yep. Much of Europe is starting the rollout. The US has one 4G provider starting to roll out service and others will soon follow.

There are two major contenders for a standard, I believe: LTE and Wi-Max. There are two major cell phone standards: CDMA and GMS. So what? They picked one and went with it. They should do the same with 4G. My god! Sweden is already talking about 5.5G!

Thailand and the Thai providers need to come to their senses and realize they've missed the boat on 3G and they should consider the best way to move forward.

[chantorn]

Sound like Korn just open this package, and it count a little too small.

[MJo]

From what I understand, there is no 4G standard yet. There are enhanced 3G services (UMTS) or "pre-4G" services (HSPA+, LTE), but no standard 4G yet.

Japan has 4G. I believe Korea does. Norway, Sweden? Yep. Much of Europe is starting the rollout. The US has one 4G provider starting to roll out service and others will soon follow.

There are two major contenders for a standard, I believe: LTE and Wi-Max. There are two major cell phone standards: CDMA and GMS. So what? They picked one and went with it. They should do the same with 4G. My god! Sweden is already talking about 5.5G!

Thailand and the Thai providers need to come to their senses and realize they've missed the boat on 3G and they should consider the best way to move forward.

"Technically" no one has 4G, standards are not finalized fully yet and those LTE networks and WiMax networks beign build now are still pre-4G technology and not meeting the proposed 4G standard requirements.

Sure there is lot of networks marketed as "4G" but in real life they are all evolutions based on "3G" standards (read technology). So all marketing hype and product branding. Wiki has pretty good, easy to understand explanation for non-engineers.

It's all about frequency bands in the end, now they are trying to get the licences out for 2100MHz bands. The old deals are still in effect for 850, 900, 1800, 1900MHz etc. Whole idea here is that government will finally have one licencing body that is not in direct competition with the private telcos operating networks like CAT and TOT are. The licences being auctioned off are not for "3G", they are for 2100MHz frequency band that can be used for whatever "G". Up to the licence owners to decide on technology.

[Pib]

There's a good article in the Bangkok Post today titled, "Govt Rushes to Clear Up 3G Debacle" which quotes the PM extensively. Based on this article, it appears the govt won't conduct the 3G action until late this year, probably early next year assuming they get the current bill establishing the NBTC passed into law and the NBTC members picked and confirmed. I think we can write off any 3G license auctions occurring over the coming months...probably at least 6 months.