3G Thailand: Only The Big Three Apply For Spectrum Auction; Tantawan Rejected

[webfact]

As expected, only big three apply for 3G spectrum auction; Tantawan rejected

Usanee Mongkolporn

The Nation

BANGKOK: -- It's clear now that the big three in the cellular service industry will be the only bidders for the long-awaited 2.1-gigahertz spectrum on October 16. The spectrum will be used for third-generation wireless broadband.

Subsidiaries of Advanced Info Service (AIS), Total Access Communication (DTAC) and True Corp, and the newly founded firm Tantawan Telecommunications, submitted applications to the National Broadcasting and Telecommunications Commission (NBTC) yesterday for the right to bid for segments of the 2.1GHz spectrum. However, Tantawan's application was rejected because of the lack of some key required documents and a bank-guarantee cheque.

AIS subsidiary Advanced Wireless Network (AWN) was the first to submit an application and related documents, including bank guarantees, early in the morning. It was backed by guarantees of Siam Commercial Bank (SCB), Krung Thai Bank (KTB), Thanachart Bank, Kasikornbank and TMB Bank.

AWN was followed by DTAC subsidiary DTAC Network, guaranteed by Bangkok Bank, and then True Corp subsidiary Real Future, backed by SCB and KTB.

A committee examining the submissions yesterday requested additional documents from AWN and DTAC Network, besides those on the NBTC's list of requirements, to see if they comply with the commission's regulations against foreign dominance of telecommunication providers. The additional documents were to cover the shareholding structures of AIS and DTAC. Both AWN and DTAC Network were able to provide these documents to the committee yesterday.

AIS is 40.45 per cent owned by InTouch, formerly known as Shin Corp. InTouch is 41.62 per cent owned by Aspen Holdings and 29.66 per cent by Cedar Holdings, both of which in turn are controlled by Singapore's Temasek Holdings.

DTAC in July revamped its shareholding structure to clear away risk of being regarded as the foreign dominated entity. DTAC is 42.61 per cent owned by Norway's Telenor. Thai Telco Holdings owns more than 22 per cent of DTAC, while Telenor owns 49 per cent of Thai Telco.

Tantawan, founded by the Yuthana Photasuthon family, submitted its application at 4.20pm, 10 minutes before the deadline. However, after the examination, the NBTC dismissed its application, given the lack of some required documents.

NBTC secretary-general Takorn Tantasit said the company submitted an application fee of only Bt500,000 versus the total required Bt535,000 (including value-added tax). It also did not bring a cashier's cheque of Bt1.35 billion. This is required of bidders as a guarantee of support from banks should they win the auction, and includes the application fee of Bt535,000.

Yuthana said Tantawan was serious about joining the auction. He said it had obtained a letter from the China Development Bank guaranteeing that it would provide Bt1.35 billion to the company, which he thought would be enough to make its application acceptable.

He added that the transfer of such a huge amount could not be made to his company on time.

Yuthana is the son of Senator Prasit Photasuthon. It is the second time the Pothasuthon-owned company has failed to get in on an auction for the 2.1GHz spectrum. Two years ago, Prasit's daughter Patamawadee headed an application by WinWin NGV to join the auction planned by the NBTC's predecessor, the National Telecommunications Commission (NTC). But that application failed because of the lack of a cashier's cheque and bank guarantee.

Seventeen companies picked up applications last month, including Tantawan, which was just founded on September 17.

The NBTC will hold the pre-qualification process from October 1-8 and announce the names of pre-qualified bidders on October 9. The bidders can appeal the result of the pre-qualification within three days after the announcement.

The commission will hold a mock auction on October 12 and 13 and open the actual auction on October 16. It will officially announce the names of winning bidders three days after the auction is completed.

The NBTC will auction nine slots of the spectrum, each containing 5 megahertz bandwidth for a total of 45MHz, at a reserve price of Bt4.5 billion. Each bidder can go for a maximum of three slots.

AIS, DTAC, and True each are expected to go for three slots to enable them to offer 3G cellular service effectively.

-- The Nation 2012-09-29

[HiSoLowSoNoSo]

And they call this a free market?

[asiawatcher]

Bank guarantees and more than a billion up front to be in the bidding? And there is no mention regarding the refund if unsuccessful. Or is this how NBTC gets funding? Interesting. Can't wait for the outcome (not).

[whybother]

Bank guarantees and more than a billion up front to be in the bidding? And there is no mention regarding the refund if unsuccessful. Or is this how NBTC gets funding? Interesting. Can't wait for the outcome (not).

They will all be successful.

Sent from my HTC phone.

[dcutman]

So Thailand cracks the door open to the 21st century again. What has change since since they cancelled the last auction?

Are there odds out on betting the outcome of this auction will have a similar outcome as the last?

[rakman]

3G is very taxing to the cell network. Smart devices eat up the 3G spectrum, where 4G is much more density friendly.

They should be going for 4G and slow down the 3G implementation.

[HiSoLowSoNoSo]

3G is very taxing to the cell network. Smart devices eat up the 3G spectrum, where 4G is much more density friendly.

They should be going for 4G and slow down the 3G implementation.

Then they lose out on all the nice bank guarantees (and other under the table payments) for the 3G system. They could have a new bidding next year for the 4G system.

[oneday]

Well let's see...9 slots available...3 companies can bid up to a max of 3 slots...seems like there never was room for another bidder anyway. Worked out perfectly for whoever is getting the kickback and the 3 big gorillas.

[abq2020]

Nice to know that my future new iPhone 5 w/ 4G LTE will be able to connect to a "new" 3G communications infrastructure. Except for the reasons already discussed by others (which are not good reasons), Thailand would be well served by crap-canning further investment in 3G and allow aggressive investment in and implementation of newer technologies. That would posture well the country, telecom companies, financial entities, and mobile subscribers for the present and future.

[Guest]

Aren't they auctioning just the spectrum and then it's up to the operators what they wish to do with it? Eg. Operators can offer either 3G or 4G services on that spectrum.

[Rionoir]

Tantawan's application was rejected because of the lack of some key required documents and a bank-guarantee cheque.

LoL Right...

Edited September 29, 2012 by Rionoir

[tragickingdom]

3G while the entire world is installing a 4G system. Thai people best try to dust off their old 1995 Nokia Phones, chances are that most features will work now.

[tragickingdom]

Aren't they auctioning just the spectrum and then it's up to the operators what they wish to do with it? Eg. Operators can offer either 3G or 4G services on that spectrum.

No that is not the way things work. This is an auction for a 3G service, the same kind of auctions that were held over a decade ago in the West and in countries like Cambodia. It shows that bureaucrats in Thailand are utmost incompetent. Even if the auction has been finished it might take years before new commissions have investigated the legality of the auctions. Thailand is except for a few city centers still in the dark ages, lightyears behind Cambodia and years behind Laos.

[kimamey]

Aren't they auctioning just the spectrum and then it's up to the operators what they wish to do with it? Eg. Operators can offer either 3G or 4G services on that spectrum.

I'm not sure of the technicalities but I do know that in the UK one operator (O2) acts like a wholesaler and sells off some of it's bandwidth to companies like Tesco, Virgin and GiffGaff although the latter is owned by O2 anyway I think. These companies then uses the network infrastructure of the wholesaler to offer their own services. There are other examples around the world where this extends the competition. Of course in many countries there are strict rules that stop the wholesaler exercising too much control.

http://en.wikipedia.org/wiki/Mobile_virtual_network_operator

I assume it can beneficial to a company that has paid a high price to win the bid but has trouble creating enough revenue through it's own customers.

In general this seems to work but of course whether it will be the same in Thailand remains to be seen.

[Thai at Heart]

Aren't they auctioning just the spectrum and then it's up to the operators what they wish to do with it? Eg. Operators can offer either 3G or 4G services on that spectrum.

I'm not sure of the technicalities but I do know that in the UK one operator (O2) acts like a wholesaler and sells off some of it's bandwidth to companies like Tesco, Virgin and GiffGaff although the latter is owned by O2 anyway I think. These companies then uses the network infrastructure of the wholesaler to offer their own services. There are other examples around the world where this extends the competition. Of course in many countries there are strict rules that stop the wholesaler exercising too much control.

http://en.wikipedia.org/wiki/Mobile_virtual_network_operator

I assume it can beneficial to a company that has paid a high price to win the bid but has trouble creating enough revenue through it's own customers.

In general this seems to work but of course whether it will be the same in Thailand remains to be seen.

Customer service here is bad enough without fragmenting the market even more.

[dcutman]

What difference does it make any way. You really cant do anything online here anyway. You cant buy anything, you cant pay bills, very easily.

Thai's way of advertising is still with a loud speaker mounted to a slow moving pickup truck. It is still horse and buggy when it come to the internet,

[Yme]

Ho hum. Did something happen?

If the grinning candidates in the above photo implement 3G to the same professional standard that they've implemented ADSL then that slow moving truck with loudspeakers dcutman mentioned might be a better alternative.

There's been 3G reception on top of Mt Everest since 2010. Expecting the same masters of the universe who can't efficiently and effectively manage rainwater run-off to implement an affordable, efficient and reliable 3G network is being more than just a tad over optimistic IMO.

Move along, nothing to see here.

[TongueThaied]

3G is very taxing to the cell network. Smart devices eat up the 3G spectrum, where 4G is much more density friendly.

They should be going for 4G and slow down the 3G implementation.

What!? Go directly to 4G and miss out on the billions in licensing for 3G? Where do you think you are? Follow the money, man. It's about the money.

Sent from my 2G connection. Still waiting . . .

[Keesters]

Purchased my 2.1-gigahertz 3G phone on 29.06.2010 in Thailand. Here we are 2 years 3 months later and bidding for the network has just started. OMG, Thailand you are so SLOW....