3G Delay In Thailand Will Scare Investors

[webfact]

3G

3G delay 'will scare investors'

By USANEE MONGKOLPORN,

WICHIT CHAITRONG

THE NATION

The delay in the 3G-licence auction could erode investor confidence because both cellular operators and consumers would suffer opportunity losses, a senior Bank of Thailand official said yesterday.

BANGKOK: -- Suchart Sakkarnkosol, senior director of the central bank's domestic economy division, said that although the telecom industry accounts for a small share of the economy, the regulatory setback to third-generation wireless services could spook investors the same way as the Map Ta Phut debacle.

"Investor sentiment could be affected because they have prepared to make the investment. But the bidding has been pushed out. This will create opportunity losses for both the operators and consumers," he said.

The Supreme Administrative Court ruled earlier yesterday to suspend the National Telecommunications Commis-sion's 3G-2.1-gigahertz licensing regulations and its licence auction plan, pending CAT Telecom's legal challenge of the NTC's licensing authority at the Central Administrative Court.

Finance Minister Korn Chatikavanij said the three private cellular operators could provide the 3G service on their existing spectrums if permitted by the two state enterprises that granted their concessions.

TOT or CAT Telecom could give the service provision for the 3G service to the cellular operators by sending the case to the Information and Communications Technology Ministry, which could then forward it to the Cabinet for approval, he said.

Advanced Info Service (AIS) has already launched 3G service on a commercial trial basis using the 900-megahertz frequency granted by TOT. Total Access Communication (DTAC) and TrueMove have each launched 3G service on a non-commercial trial basis using the 850MHz band granted by CAT Telecom.

Korn is convinced the 3G licences could be awarded in the middle of next year when the National Broadcasting and Telecom-munications Commission (NBTC) is expected to get off the ground.

Most of the members of the House of Representatives, which yesterday considered the frequency allocation bill governing the establishment of the NBTC, supported the formation of a joint House/Senate committee to vet the bill. They are expected to vote on the bill next Wednesday. But most opposed the Senate's amended version, which increased the number of commissioners to 15 from 11, questioning whether the move was influenced by interest groups.

ICT Minister Chuti Krairiksh said his ministry would work with all parties to ask the Constitution Court to interpret the scope of the NTC's authority, otherwise the telecom industry would be caught in a regulatory vacuum. The ministry would work with its legal department today or next week to find ways to approach the court.

True Corp chief executive Supachai Chearavanont said the industry was in limbo now, adding that the NTC should consult with the Constitution Court to clear up issues over its licensing authority.

He referred to the government's plan to convert mobile-phone concessions into NTC licences and the permission to allow concession holders to provide the 3G service on their existing spectra.

But he doubts that any private telecom operators will invest in providing 3G on their existing spectra without an extension to their concession, since the concession terms will end soon and the telecom operators have to transfer their networks to the state telecom enterprises.

TrueMove's concession expires in 2013, AIS's in 2015 and DTAC's in 2018.

Dhanin Chearavanont, CEO of Charoen Pokphand Group, one of the country's lar-gest conglomerates, which owns True Corp, said the failure in 3G licensing would cause damage in the long run. However, Dhanin said True was not focusing on only 3G mobile service on the 2.1MHz spectrum because it was now working on a trial for upgrading its current 2G, 850MHz network to 3G. The firm also provides other services such as Internet access and cable TV.

Somprasong Boonyachai, executive chairman of Shin Corp, the parent of AIS, said that as a telecom operator, AIS's business had to proceed as usual.

But speaking as a Thai, he feels the country has lost the chance to reform the industry, changing it from a concession to a licensing regime.

"The telecom sector should have been in the new chapter a long time ago," he said.

AIS CEO Wichien Mektrakarn said the auction fiasco had definitely affected the telecom industry by depriving the country and people of the opportunity to enjoy modern technology, while the company also misses new business opportunities.

He said AIS was not interested in spending more on providing 3G service on its existing 900MHz band, given that its concession is over in 2015, making the investment infeasible.

DTAC CEO Tore Johnsen said the company respected the court ruling. But he felt disappointed that the granting of the 3G spectrum licences had been derailed. Thailand needs wireless broadband access to help develop the country, he said. As a result of the ruling, DTAC will focus on 2G service but is committed to the 3G technology, and he hopes all problems will be settled soon so the industry can move forward.

It will take a long time before the NBTC can be established but consumers need 3G service now, he added.

-- The Nation 2010-09-24

[ManInSurat]

Those in the positions of power in the Telcos care not a jot for their subscribership, they seem to actively want to keep us in the dark ages. Ironically we are the many that ensure their pockets get ever fatter and bulging and their millionaire lifestyles stay just that way. Yet they keep hitting us with sticks!

I totally agree with Khun Boonyachai when he says Thailand has lost a very important opportunity here. However, is he really surprised to see this happen? I highly doubt it. It's not like their aren't many many precedents for this type of corporate behaviour in Thailand.

People opine in this forum that Thailand is moving forward, I present this fiasco as hard evidence that it really is not. It is exactly these types of decisions and regressive corporate behaviour that needs to be eradicated from Thailand's corporate culture. Only then will progression of any kind become apparent.

I live in, ever diminuishing hope, that I will see this in my lifetime.

Highly disgruntled of Surat Thani!

Edited September 24, 2010 by ManInSurat

[selftaopath]

Thailand: The Fiasco hub of Asia.

[SomTumTiger]

Yes, because investors in Thailand are really that interested in internet on their phone. They care about cheap labor period.

[Thai at Heart]

Since the two big operators have what appear to be nominee shareholding structures in a restricted industry one could say that a license is the least of the restrictions to foreign business in Thailand.

There are far bigger issues than a license that deter foreign operators entering business in Thailand.

[Thailand]

A very unfunny joke!

[hoaker]

What is Thailand going to do with 3G? can't even operate 2G efficiently!! I think its a waste of money, but hey! politicians gotta eat too

[monty]

The issue towards foreign investors is not the immediate lack of 3G per se, but the fact that Thailand is incapable of providing a clear legal framework on a multitude of things.

In a relative short time we had the MapThaPut fiasco, and now 3G, resulting in foreign investors loosing confidence, basically not knowing exactly what will happen after they invest, with existing laws and regulations seemingly getting changed on a whim and a court ruling...

[asiawatcher]

The world is already past beta testing of 4G so why are we even contemplating wasting money on 3G? Apart from skimming off the top! Of course... Thailand is still screwing around with 2+G and can;t get that right so if they have the opportunity to hop to 4 and bypass 3 that would save a fortune. But logic does not exist ...