NTC Study Faults CAT-True 3G Deal

[webfact]

NTC study faults CAT-True 3G deal

By Usanee Mongkolporn

The Nation

NTC says deal will deter retail competition

The CAT Telecom-True Group deals might contravene the new frequency allocation law and deter competition in the 3G retail market, according to a study by the National Telecommunications Commission.

The NTC on February 9 initiated the study of the deals, which pave the way for CAT and True's subsidiaries, Real Future and Real Move, to develop a 3G High Speed Packet Access (HSPA) service.

One issue was whether the deals granted by CAT to BFKT (Thailand) and Real Move - which will see CAT's allocation of the 850MHz spectrum partially or wholly managed by them - breached Article 46 of the frequency allocation law.

Considering the relations and duties of CAT and True under the deals, CAT, which owns the spectrum, might be deemed as not providing the planned HSPA service on its own but allowing these True subsidiaries to run the service for it, according to the study.

The deal CAT granted to BFKT to lease the HSPA network equipment to CAT does not say only that BFKT has the role of a network lessor. It also allows BFKT to manage the HSPA network equipment and towers and build telecom towers for CAT in case CAT is not ready to do so after being required to do so by BFKT.

BFKT is owned by Real Future, a True Corp subsidiary. Real Move is another True subsidiary.

Article 46 mandates that NTC licence holders provide their service on their own spectra, instead of allowing other parties to do so on their behalf.

Regarding the 3G-HSPA service wholesale-resale deal between CAT and Real Move, two irregularities were pointed out.

First, most wholesalers will set the conditions in their favour, which means the regulator has to step in to ensure that all retailers can purchase wholesale capacity on a fair basis. But in this case CAT has permitted Real Move to lease up to 80 per cent of the 3G-HSPA capacity to provide the retail service.

Second, this deal might affect market competition, since CAT will have only 20 per cent of HSPA capacity left to lease to other interested retailers.

Under this deal, Real Move can purchase from CAT a maximum 80 per cent of the total capacity of the planned HSPA network nationwide during the first three years.

The study concludes that CAT has to propose to the NTC its plan to phase out its code division multiple access (CDMA) cellular service nationwide, as well as the consumer protection measures for the service cancellation.

CAT also has to show that the CDMA subscribers will not be worse off after being migrated to CAT's planned HSPA service.

CAT plans to complete the conversion of its CDMA network to the HSPA network within two years.

CAT entered into 12 agreements with Real Future and Real Move on January 27. The main deals are for BFKT to lease HSPA network equipment to CAT, for Real Move to resell CAT's planned HSPA service, and for BFKT to lease the CDMA network in 25 provinces to CAT.

The NTC ordered the internal study so it can determine appropriate ways to regulate the CAT-True 3G service joint development.

-- The Nation 2011-03-07

[trogers]

Sounds familiar? The retail space in Swampy comes to mind.

[Rama]

NTC is filled by non-telephone industry and non-techies. They have other interests, their biggest non-interest is the Thai people. The fact that Thailand sits with Burma and North korea as the only places with no 3G doesn't phase them. Thailand, once the place that led SE Asia in innovation and modernity is trying it's damnest to get to last place now. 1 step forward and 2 steps back.

[Crushdepth]

CAT have vested interests too (massive fees from concession holders), and totally screwed things up by blocking the spectrum auctions in court.

Our only hope is that establishment of the new authority will forge ahead now that the legislation is in place, and that it will actually get around to issuing some licenses. If that doesn't happen soon carriers will end up investing so much in 850 spectrum - because they can't offer 3G any other way - that we'll get stuck with it.

[Barin]

The study concludes that CAT has to propose to the NTC its plan to phase out its code division multiple access (CDMA) cellular service nationwide, as well as the consumer protection measures for the service cancellation.

CAT also has to show that the CDMA subscribers will not be worse off after being migrated to CAT's planned HSPA service.

And throw away all the CDMA2000 1x EV-DO base station and infrastructure equipment worth of 100,000,000.- US dollars?

[Crushdepth]

Well imagine the tea money you could make negotiating huge new equipment supply contracts with enthusiastic vendors...

[bkk_mike]

The study concludes that CAT has to propose to the NTC its plan to phase out its code division multiple access (CDMA) cellular service nationwide, as well as the consumer protection measures for the service cancellation.

CAT also has to show that the CDMA subscribers will not be worse off after being migrated to CAT's planned HSPA service.

And throw away all the CDMA2000 1x EV-DO base station and infrastructure equipment worth of 100,000,000.- US dollars?

It depends on the manufacturer... - Most of the equipment will be the same, even the aerials might be unchanged if it's using the same frequency, so it could be as simple as a software change. (maybe software + a little hardware)

I think they'd have to have been rather short-sighted (possible I suppose) in their original purchasing decision on the EVDO hardware for them to have chosen a system with no migration path to at least HSDPA (HSPA might involve an upgrade, hence the software + hardware...)

[Barin]

It depends on the manufacturer... - Most of the equipment will be the same, even the aerials might be unchanged if it's using the same frequency, so it could be as simple as a software change. (maybe software + a little hardware)

I think they'd have to have been rather short-sighted (possible I suppose) in their original purchasing decision on the EVDO hardware for them to have chosen a system with no migration path to at least HSDPA (HSPA might involve an upgrade, hence the software + hardware...)

What can remain unchanged:

• Towers
• Feeders
• Cables
• Fiber optic lines
• Microwave links
• Power supply systems including emergency power generators
• Billing system

What needs to be replaced:

• Antennas (the current CAT CDMA and Hutch base station antennas are all for 800 MHz, the new UMTS service will operate on 2100 MHz, so all the antennas at every base station need to be replaced).
• Channel cards (transceivers) at every base station need to be replaced (CDMA 800 MHz is not compatible with WCDMA 2100 MHz)
• Base station controllers and their software
• HLR (Home Location Register)
• AUC (Authentication Center)
• AAA Server (Radius Server)
• ..... and much more

According to my estimation what needs to be replaced consitutes about 70% of total cost and may be over 3 Billion Baht...

Please correct me if I am wrong.

Edited March 8, 2011 by Barin