Thailand Raises $1.4 Bln In 3G Mobile Auction

[webfact]

Thailand raises $1.4 bln in 3G mobile auction

BANGKOK, Oct 17, 2012 (AFP) - Thailand raised 41.6 billion baht ($1.4 billion) Tuesday in a long-awaited auction of third-generation (3G) mobile telephone operating licences, regulators said.

Leading telecom firms Advanced Info Service, Total Access Communication (Dtac) and True Move all secured licences in the sale, which critics tried to block because of fears of a lack of competition in the bidding.

A business dispute meant that as other nations move to introduce faster 4G technology, Thailand has yet to roll out a proper 3G service, more than a decade after it was first launched in Japan.

The government sold all 45 megahertz of bandwidth on offer. It had set a minimum price of 4.5 billion baht for each five-megahertz block.

AIS submitted the highest bid at 14.6 billion baht for three blocks, while Dtac and True Move offered the minimum of 13.5 billion baht each for the same number, the National Broadcasting and Telecommunications Commission said.

The slow pace of progress has frustrated smartphone users, but people in some areas of Thailand are now expected to be able to start using 3G within six months.

In 2010 a court halted a 3G licence auction at the last minute after state-owned telecoms giant CAT argued that the then-regulator, the National Telecommunications Commission, had no authority to conduct the bidding.

Investors appeared nervous that the outcome of the auction could trigger fresh legal action.

"The fact that the auction sailed through and the bidders paid only a small premium to get the licenses should be considered as a positive factor," said Prasit Sujiravorakul, a telecom analyst at Bualuang Securities.

"But we're seeing all their shares falling, which means people in the market are still wary about potential legal challenges against the auction."

AIS shares fell 3.5 percent to 195 baht while Total Access lost 3.7 percent to 85 baht and True Corp dropped 0.9 percent to 5.55 baht.

Dtac is already looking further ahead by starting a technical trial of 4G in part of Bangkok. It expects to complete a nationwide network update by the end of 2012 to prepare for an eventual official launch.

-- Dow Jones Newswires contributed to this report --

-- (c) Copyright AFP 2012-10-17

[webfact]

TELECOMMUNICATION

Lacklustre 3G bids slammed by TDRI

Usanee Mongkolporn,

Sirivish Toomgum

The Nation

Total Access Communication

BANGKOK: -- Prices for 2.1GHz slots barely beat the reserve levels; critics say bids fail to yield value for spectrum

As expected, Thailand's first 2.1-gigahertz (GHz) spectrum auction yesterday turned out to be a less-than fiercely competitive affair, with the three highest bidders paying a combined Bt41.625 billion - less than 3 per cent above the reserve price - for the nine prized spectrum slots after seven rounds of bidding.

Thailand Development Research Institute (TDRI) president Somkiat Tangkitvanich yesterday slammed the auction outcome as costly for the state coffers and for taxpayers. He said the outcome was what he had expected: he cited a combined price for the nine slots totalling Bt41.650 billion, only slightly higher than the combined reserve price of Bt40.5 billion, or Bt4.5 billion per 5-megahertz (MHz) bandwidth slot.

Following the finalising of yesterday's bidding, the National Broadcasting and Telecommunications Commission (NBTC) is expected to grant the 15-year licences to the three bidders in January.

NBTC telecom committee chairman Settapong Malisuwan said the commission is ready to deal with possible legal suits against the outcome and insisted that the NBTC proceeded with the auction with the country's interests at heart.

The full market value of each slot is Bt6.4 billion, totalling Bt57.960 billion for the nine slots, according to the evaluation by the NBTC's reserve price panel, comprising a group of economics lecturers from Chulalongkorn University.

"Even though the auction means the Thai public will have a 3G-2.1GHz service available next year, this has cost the state coffers Bt16.335 billion when compared to the full spectrum value. It's like giving them [the bidders] a windfall," Somkiat said.

Somkiat added that the biggest flaws in the auction were in its terms and conditions, which he said allowed three bidders to grab the maximum three slots each and which set a low reserve price, failing to promote strong competition. He wanted to know how the NBTC would take responsibility for the state's loss, and urged related state agencies to investigate the auction.

NBTC commissioner Suthiphon Thaveechaiyagarn argued that critics focused solely on the per-slot spectrum price calculated by NBTC reserve price panel, while ignoring the panel study's conclusion that the appropriate reserve price must not be lower than 67 per cent of the full price. He said the reserve price of Bt4.5 billion per slot was 70 per cent of the full price per slot.

He added that the main objective of the auction was to effectively allocate all the spectrum slots: the price was not the priority.

"We're satisfied with the final outcome [which] is Bt1.125 billion higher than the total reserve price of nine slots," Suthiphon added.

Settapong said if there was no 2.1GHz auction, there would be no auction of the 1,800MHz spectrum.

He said that the concessions of some telecom operators would end soon, so it is necessary to find a way to grant them access to the spectrum to help them continue to provide service to customers.

The three bidders were Advanced Info Service's Advanced Wireless Network (AWN); DTAC Network (DTN) of Total Access Communication; and True Corp's Real Future.

The three cellular operators are expected to migrate their customers from their concessions to the 3G licences to enjoy lower regulatory fees. The concession fee cost each of them around 25 per cent of their gross revenue, while the 3G licences will cost each of them 5.75 per cent per year.

A telecom analyst said it would take four years at least for them to gain regular cost savings from the licences, as they will not be able to migrate all customers from the concessions to the licences overnight.

AIS has over 34 million customers, while DTAC has over 23 million and TrueMove 17 million.

Sam Dinkin, senior auction consultant of Power Auctions, said there was no collusion detected among the bidders. "There is no evidence of collusion," he said.

NBTC hired Power Auctions to incorporate the auction rules into the software used and to support its management of the 3G auction.

AWN was the top bidder, quoting a total of Bt14.625 billion for three slots. Under the terms of the auction, the highest bidder is given first choice of their desired spectrum range. AWN selected ranges adjacent to that being used currently to provide 3G service by its concession owner, TOT.

Real Future and DTN quoted equal final prices for each of their slots. They had to draw lots to be the second to select the spectrum range. Real Future selected ranges in the middle of 2.1GHz band, while DTN selected those in the first range.

The auction took around six hours. In the closing round, there were six slots with prices of Bt4.5 billion each. Two slots attracted the highest individual per-slot price of Bt4.950 billion, while another was priced at Bt4.725 billion.

The first round of the initial bidding phase started at 10am when all had to quote the same reserve price of Bt4.5 billion per slot. The price could be raised at fixed increments of Bt225 million per round. Each bidder was given 30 minutes to consider before placing a bid in each round.

In this first bid round, six out of nine slots were selected, resulting a total value of the quoted price of Bt27 billion. Two bidders selected two same slots in this round. One bidder selected two slots. The NBTC staff said it implied the bidders did not collude as at least two bidders selected same two slots.

In the last round, no bidder placed a quote or waived a price offering. As a result, the auction ended at 3.45pm.

-- The Nation 2012-10-17

[laurentbkk]

When so many countries already have 4G ..... and not only western countries !

[tomross46]

How much money went into the hands of politicians?

[Thai at Heart]

A business dispute meant that as other nations move to introduce faster 4G technology, Thailand has yet to roll out a proper 3G service, more than a decade after it was first launched in Japan.

Which business dispute was that one? I thought it was basically that successive governments haven't been able to get their ducks in a row, or is this indicating the real reason why this whole mess has been going on for so long?

[richusa]

Why skip to 4G..when there is money to be made now on 3G and again on 4G. Who said the Thais are disorganized

[Katipo]

It's bizarre how, for example, a couple of drunk girls dancing topless at Sonkran can be deemed damaging to Thailand's reputation, and yet something as monumentally farcical as this has been allowed to carry on for years.

-not sent from my iPhone Thaivisa App as my data connection speed is sh#t.

[allan michaud]

41billion Baht! that sounds like peanuts, the telecom companies are making an absolute killing.

[Pormax]

How much money went into the hands of politicians?

How long is a piece of string!!!!!!

[webfact]

TDRI chief says Thailand's loss from 3G auction 'gigantic'

BANGKOK, Oct 17 - Thailand lost at least Bt16 billion from the Tuesday's auction of 3G licences organised by the National Broadcasting and Telecommunications Commission (NBTC), Thailand Development Research Institute (TDRI) president Somkiat Tangkitvanich charged today.

Expressing disappointment with the auction results, he said total bids were only 2.8 per cent higher than the starting prices set by the NBTC at Bt40.5 billion for nine separate licences.

The total bids were Bt41.65 billion and six licenses were auctioned at the floor price of Bt4.5 billion each.

Though the people will have access to the 3G network from next year, the damages incurred by the state and taxpayers are estimated at Bt16.335 billion, Dr Somkiat said, adding that the three bid winners received ‘windfalls’ for the minimal differences between the auctioned and floor prices, excluding the discount of annual concession fee to be paid to the government at Bt40 billion.

Describing the bid prices as incredibly cheap, the TDRI president said each operator will have to pay only Bt1 billion a year while the fees for 3G service will not be lowered.

It will only boost the operators' revenue, he said.

The three winning operators were Advanced Wireless Network under Advanced Info Service, DTAC Network under Total Access Communication (DTAC),and Real Future under True Corporation.

He said the auction results confirmed the people's belief that the NBTC acted in favour of the private operators, adding that the NBTC's repeated propaganda about competitions among bidders was groundless.

Dr Somkiat said the equal allocations of frequencies to the private operators have deprived competition and that the NBTC has damaged the country by setting unrealistic floor prices.

Such a mistake could have been avoided if the NBTC had listened to cautions and reservations from different quarters in society, he said.

He called on the NBTC to show its accountability for the damages to the state and the public while related government agencies should inspect the case.

The same procedure must not be taken in the future auctions of licenses for 4G spectrum and other frequencies, he said. (MCOT online news)

-- TNA 2012-10-17

[JoePai]

How can Thailand lose ? They are selling thin air (nothing new there !) so any monry they do take in is a bonus. Look on the bright side

[whybother]

If the telecom companies pay more for the licences, the customers will pay more for access.

Thailand will only lose if the telecom companies charge too much for their services.

[hellodolly]

Let me get this rite.

One Billion for me, One Billion for you, One Billion for you, One Billion for you, One Billion for you, One Billion for you, One Billion for you, and another Billion for me to cover the high cost of living outside Thailand. The rest you can donate to the government.

[Thai at Heart]

If the telecom companies pay more for the licences, the customers will pay more for access.

Thailand will only lose if the telecom companies charge too much for their services.

Very valid point. The auction for 3G in the UK was run so superbly, that it was basically unaffordable for customers for several years.

http://cramton.umd.edu/papers2000-2004/01nao-cramton-report-on-uk-3g-auction.pdf

Without allowing a new guy to the table to enter the market, and having such an even split of 9 licenses and 3 bidders, was inevitably going to result in an even allocation of licenses with little competition. It is a nice hallmark of so much business here, that the illusion of competition is created to hide the fact that oligopoly exists.

[jbrain]

If the telecom companies pay more for the licences, the customers will pay more for access.

Thailand will only lose if the telecom companies charge too much for their services.

You mean they will not overcharge for a lousy service, regardless of the fact they paid peanuts?

[jbrain]

BANGKOK: -- Prices for 2.1GHz slots barely beat the reserve levels; critics say bids fail to yield value for spectrum

-- The Nation 2012-10-17

Well, what would they have expected with only 3 bidders available for 3 fixed size packages. Edited October 17, 2012 by jbrain

[lomatopo]

If the telecom companies pay more for the licences, the customers will pay more for access.

Thailand will only lose if the telecom companies charge too much for their services.

I totally agree, although we may be in the minority. Honestly, with only three service providers and foreign investment limited I'm not sure what people were expecting? AIS paid a bit more for contiguous spectrum with TOT, True avoided the PHS overlap, sticking it to DTAC a bit, and DTAC got the dregs, as it were. The auction results are great news for consumers, with all service providers on more or less equal footing, and they should check/compete enough to keep prices low. The move from concessions to licenses is both practical and necessary.

But licenses still need to be issued, and network built out, so let's not get too excited.

Spectrum for LTE/4G is still tied up in existing concessions, and there is no need for it here yet. And no need to require everyone to buy a new handset.

[Arkady]

What did they expect? There are only three encumbents due to past protectionist regulations and rampant corruption in awarding the original concessions that kept out competition. The new regulations are even more protectionist. The capacity on offer was sufficient for the incumbents' needs and who else would bid? If the money got more money what would it do with it? Seems like a lot of noise complaining about the symptoms of the problem, rather than the problem itself which is protectionism and corruption.

[vijer]

What do I care, I don't need data on my phone, just call me or text me on my phone. I'll use the internet when I get home or to work or to where there is free WiFi.

[Jitar]

It's bizarre how, for example, a couple of drunk girls dancing topless at Sonkran can be deemed damaging to Thailand's reputation, and yet something as monumentally farcical as this has been allowed to carry on for years.

-not sent from my iPhone Thaivisa App as my data connection speed is sh#t.

Bizarre but true. Thai politicians sometimes use the odd sex and drugs story to keep attention away from the real news. I doubt the best fiction author in the world could have written a mini series as far fetched as the 3G saga in "Amazing Thailand"

But at least in true Thai Style, the 3G network has finally stumbled into a kind of service, despite the political maneuvering and the 10 year delays in the licenses. Those of us with a choice of fixed line ISP limited to TOT are forever grateful for the alternative.

[MaxLee]

In the small print it means, with the auction over we wait for SIX MORE MONTH until Thailand can OFFICIALLY USE 3G,....

And then there will be ANOTHER PROBLEM OF REGULATION POLICIES, which will delay it ANOTHER 6 MONTHS, because the bidders can't make up their minds, and it has to be delayed for another 6 months because, the telecommunication authority if Thailand is taking a SPECIAL VACATION TRIP WHATSOEVER, and delay it another six months.,,.... And so on.... THOSE F****^**^^***ng A$$$$$$$$$$eeee$$$$$$$ of telecommunication government dogs!!!!!!

[tragickingdom]

And still there are some people with half a brain out there who believe that the price was not right and collusion has taken place. Those people are mainly to be found within the Democrat circles (The elite) and in academic circles. Academics are Thailand's pest, they are taken seriously by the likes of the Nation while the Thai education system for which they should be responsible is at Timbuktu standards. Where Cambodia starts rolling out 4G, Thailand auctioned off its 3G spectrum 12 plus years later than other countries did.

I suppose that the academics that are complaining are still using a Nokia from 1995 or using car phones from Motorola with a 10 kilo battery, they can't help it, the same people find tablets for students a waste of money and are not in favor of electronic books (They probably cannot manipulate history anymore).

[techboy]

How much money went into the hands of politicians?

How long is a piece of string!!!!!!

Neither of you have a clue as whether this sort of thing occurred -Nevermind how much. Love to read these great insights

[CWMcMurray]

So what does this change for consumers.?

Last week my phone had a 3G icon and today it still has the same 3G icon...

So has anything changed?

Will things get faster? Or is this just a paper shuffle and service remains the same?

[Tywais]

How can Thailand lose ? They are selling thin air (nothing new there !) so any monry they do take in is a bonus. Look on the bright side

It has me confused. They (government) are offering licenses that cost them nothing but the paper written on so where is the loss? Oh, guess the loss is in what they wanted versus what they got.

[Troll]

Thailand is not very high-tech. 2012 and no 3G yet. While other countrys are testing next step 5G. They should drop the 3G plans and implement 4G. I feel like living in the stoneage.

[webfact]

3G AUCTION

Proposals of an NBTC commissioner

The Nation

BANGKOK: -- National Broadcasting and Telecommunications Commission should host an urgent meeting to diffuse hiccups regarding to the Oct 16 3G auction, said a commissioner.

Supinya Klangnarong, a commissioner who is a member of the NBTC’s broadcasting committee, recommended three options in her tweets.

First, NBTC calls for a new auction.

Second, NBTC must finalise rules on 3G service fees within 3 months.

Third, all three bidders must be bound to a commitment to put public interest as first priority.

She noted that all did not want the auction cancelled, but as the auction went through all parties must set some rules to ensure maximum benefits to consumers.

"I’m in the middle of the storm. It’s awkward. Still, there is a way out. It needs the NBTC board’s political will to ensure the win-win situation for this national issue," she said.

-- The Nation 2012-10-17

[techboy]

In the small print it means, with the auction over we wait for SIX MORE MONTH until Thailand can OFFICIALLY USE 3G,....

And then there will be ANOTHER PROBLEM OF REGULATION POLICIES, which will delay it ANOTHER 6 MONTHS, because the bidders can't make up their minds, and it has to be delayed for another 6 months because, the telecommunication authority if Thailand is taking a SPECIAL VACATION TRIP WHATSOEVER, and delay it another six months.,,.... And so on.... THOSE F****^**^^***ng A$$$$$$$$$$eeee$$$$$$$ of telecommunication government dogs!!!!!!

My "unofficial" 3G works great! Have you ever tried the 3G/4G services in some of these countries that are supposedly so far ahead of Thailand? I have. Most recently Singapore. The networks cannot handle the traffic and frequently it's like using EDGE. Whatever Thailand is doing its service is great- At least with DTAC and AIS. Oh yeah- In spite of the post-auction dip in stock price my AIS is still up 150% over last year's investment. I just love to listen to folks dump on how this country manages telecom

[Guest]

So what does this change for consumers.?

Last week my phone had a 3G icon and today it still has the same 3G icon...

So has anything changed?

Will things get faster? Or is this just a paper shuffle and service remains the same?

Some things will change.

1) Operators have cheaper airwaves and therefore reduced costs. This hopefully will be shown on the customer side. Either with reduced prices or different plans.

2) Most mobile terminals support 2.1GHz spectrum. Therefore one phone can operate in any network. Currently there is different models for AIS and DTAC for example.

3) There is more spectrum to play with. Each operator can use their 15MHz spectrum with lesser price tag.. and I suppose the existing spectrums could be used for other purposes. For example Home 3G connections.

Any case if there is more spectrum it can mean that one cell can support more clients or existing with better speeds.

I have no idea how wide spectrums are used currently. Does anybody know?

[McMagus]

Ya gotta laugh...really ! Yesterday I noticed a new add for AIS promoting their 3G AND... 4G ... can you believe this <deleted> ? I'm in the middle of BKK and couldn't get stable 3G from AIS.