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Doubts Over Possibility Of Licence Auction: Thai Telecom


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TELECOM

Doubts over possibility of licence auction

USANEE MONGKOLPORN,

SIRIVISH TOOMGUM

THE NATION

BANGKOK: -- Telecom watchdog worried about setback to plans through legal challenges

While the National Broadcasting and Telecommunications Commission intends to invite bids for the 2.1-gigahertz spectrum licences by the third quarter, its 11 members are wondering whether they can be ready to hold auction by that time.

Some NBTC commissioners say they cannot rid themselves of worries that something beyond their control could happen to sabotage their plans.

Commissioner Suthiphon Thaveechaiyagarn said the watchdog had assigned its office to list the risk factors and scenarios that could derail the planned auction and submit it to the board this week.

Another commissioner, Supinya Klangnarong, said one of the biggest concerns was the possibility of legal action against any of the NBTC's three master plans governing spectrum management, telecommunications, and broadcasting.

Article 49(4) of the 2010 Frequency Allocation Law opens the door to anyone to challenge the master plans at the Central Administrative Court if they think the plans are unconstitutional.

The NBTC needs the master plans in effect to give it the authority to auction new spectrum licences. It expects to have the plans published in the Royal Gazette next month.

The commission will also revise the regulations preventing foreign dominance of local telecom operators to encourage as many foreign telecom operators as possible to take part in the auction. It wants to see new prospective bidders, besides the three already set to take part - Advanced Info Service (AIS), Total Access Communication (DTAC) and True Corp.

Suthiphon said the NBTC would revise the foreign-dominance regulations based on the Commerce Ministry's Foreign Business Act.

Under the current regulations, licence-holders must determine their own measures to prevent foreign dominance in their organisations and submit them to the NBTC within 180 days of the regulations taking effect, which was last August. They were permitted to apply for an extension by another 180 days. Suthiphon said the NBTC had approved extensions for AIS and DTAC.

Foreign dominance is defined as direct or indirect control of companies. It includes foreign participation in promoting or controlling high-ranking executives, from chairman to chief finance officer. If a licence-holder is found to be dominated by foreign concerns, the NBTC will ask the telecom operator to rectify the situation. If the firm refuses to do so, the NBTC can punish it, or suspend or revoke its licence.

A telecom-industry source said this issue could affect the planned licence auction. A party might raise the issue of foreign ownership of prospective bidders to allege that they lack qualifications to bid for the spectrum, citing national security.

An NBTC source said the CAT-True partnership on third-generation cellular service could also have an impact on the auction. Many state authorities have probed the legitimacy of the deals between CAT Telecom and True Group. If they are ruled legitimate, an attempt might be made to derail the auction, as True and CAT will benefit for a certain period because they will face no strong 3G competitors.

However, True chief executive officer Suphachai Chearavanont strongly denied this possibility, saying that True wants to see the auction take place, as it is keen to clinch the 2.1GHz spectrum to back up its existing 3G service under the CAT partnership on the 850-megahertz spectrum.

Under the deals, CAT has wholesaled its 3G capacity to True subsidiary Real Move to provide service. Real Move has about 800,000 customers.

A telecom-industry observer said that even if the auction takes place successfully, it does not mean the licence winners will live happily ever after. Telecom operators that fail to obtain licences might take action against the winners, and this will surely affect their 3G business.

NBTC's concerns

The NBTC is concerned that these three factors could have an impact on its planned auction of 2.1GHz spectrum licences.

1 Legal action against any of its three master plans. Article 49(4) of the 2010 Frequency Allocation Law says the public, telecom operators or state agencies can challenge the master plans at the Central Administrative Court if they think the plans are unconstitutional. Such legal action could affect the licence auction.

2 Its existing regulations preventing foreign dominance of local telecoms might scare away foreign telecom operators from taking part in the bid. The NBTC is set to amend the regulations.

3 The CAT Telecom-True Group partnership deals for 3G service might have an impact on the auction in one way or another.

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-- The Nation 2012-02-20

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