3G Licence Auction Preserves Telecom Status Quo: Thai Editorial

[webfact]

EDITORIAL

3G licence auction preserves telecom status quo

The Nation

BANGKOK: -- Debate over bid levels obscures fact that competition is being obstructed

The 3G licence auction turned highly controversial last week when the National Broadcasting and Telecommunications Commission (NBTC) was criticised by some quarters in society as providing too generous terms and conditions for the bidders, resulting in low bid prices.

It may be too late to reverse the result of the bidding. The questions and controversy surrounding the 3G bidding process should nonetheless provide lessons for Thailand and those involved in telecommunications licensing in the future.

In years to come, licences for more-advanced telecommunications networks, such as one incorporating 4G technology, will be put on the table by the state.

The NBTC, the Finance Ministry and consumer groups have argued over whether the three 3G winners were allowed to pay too low a bidding price, at the expense of the public. But the fundamental question here is how the government can ensure a free and fair competitive environment that allows more potential bidders to participate in the process.

The argument over the sum of money that the government should have received has distracted attention from the fact that the telecom business environment in Thailand is not conducive to market competition.

The advent of new technology in Thailand should create new opportunities for consumers, who should be able to utilise the platforms to enhance their creativity and innovation. The introduction of the advanced technology should also bring about new players in the market. And it is undeniable that foreign players have potential to help upgrade technology in Thailand, thanks to their capital and know-how.

However, the recent 3G auction saw the same old players participating in the bidding, partly because of regulations that do not encourage the participation of foreigners. The Telecom Law and the Foreign Business Law do not allow foreigners to hold more than 49 per cent in telecom companies, thus discouraging many international companies from participating in the competition in Thailand.

Same old players

No one was surprised that this time the winners were Advanced Wireless Network of Advanced Info Service (AIS); DTAC Network of Total Access Communication (DTAC); and True Corp's Real Future - three very familiar faces.

Some tend to play the nationalism card in a bid to protect their own interests at the expense of consumers, who should be benefiting from a fairer competitive environment in the telecommunications market in Thailand.

The heated debate over the auction prices simply reflects the non-competitive environment in the telecom business in Thailand, where the same old players, who are politically connected, tend to have an influence on the decision-making process, directly or indirectly.

The limits on players - via limitations on stakeholders, for instance - comes at the expense of consumers, who should be able to enjoy the latest technology to advance their innovations and communications.

The number of slots given to each winner is not as important as the level playing field of the telecommunications industry in Thailand. The widespread debate over the 3G bidding shows that the public is highly interested in and anxious to use the new technology.

The watchdog must ensure a level playing field to encourage competition, facilitating the entry of players with high technology into the local telecom industry. Such transfer of know-how is essential to Thailand's technological development.

At the same time, the regulators should ensure that telecom operators do not deprive consumers by failing to provide the best services. After all, the network frequency is considered a national resource that should serve the best interest of Thais. It should not be exploited by particular groups of investors.

The regulators should ensure a level playing field in the market to promote active participation and protect the interests of customers after licences are issued.

In short, Thais should receive world-class service from international players, with accessible coverage and affordable service fees. They deserve no less.

-- The Nation 2012-10-22

[zakk9]

The 3G auction didn't preserve status quo. Thai ownership rules and the constant attempts to chase DTAC out of the market are the main reasons no foreign investors are interested in the Thai market. It was only when Telenor became a part owner of DTAC that mobile communication prices were reduced drastically in Thailand.

Edited October 22, 2012 by zakk9

[animatic]

They should have been taking auction for installing 4G now and the 3G just being part of it.

This way way too late for being JUST a 3G auction, maybe 5 years behind the times,

sure 3G is an improvement, but the new standard is 4G and is being installed.

Why pay for a delayed and out of date tech installation, when they could just go for

state of the art directly AND get the older 3G technology as part of the deal?

it is just idiotic. they have missed 3G, just move ahead.

And yes, open up the bidding with less protectionist policies.

They nationalistic tendencies are holding the country back,

hell even Vietnam is far ahead of Thailand for what thy have running.

[arthurboy]

The editorial notes and indeed emphasises that, 'the same old players, who are politically connected, tend to have an influence on the decision-making process, directly or indirectly.'

So then the Nation, let's see some rigorous investigative reporting of the 'same old players' and, while you're at it, every other major company, Thai and joint venture, in the country who are 'politically connected'.

That'll be all of them I'd venture.

[tragickingdom]

Nobody was surprised to see who the winners are, that is true. If you have 9 plots from which 8 are needed by three companies and you have three bidders because the Nation newspaper and it's elite supporters refuse the chance to leave the third world status behind and allow foreign competition than it is not hard to predict what the outcome would have been. There was a fourth Thai bidder but that could not even come up with the deposit. The Nation should write a few editorials about why their supporters held a 3G auction back for ten years. It will never be written, one moron covers the back of another moron at the Nation.

[billd766]

Nobody was surprised to see who the winners are, that is true. If you have 9 plots from which 8 are needed by three companies and you have three bidders because the Nation newspaper and it's elite supporters refuse the chance to leave the third world status behind and allow foreign competition than it is not hard to predict what the outcome would have been. There was a fourth Thai bidder but that could not even come up with the deposit. The Nation should write a few editorials about why their supporters held a 3G auction back for ten years. It will never be written, one moron covers the back of another moron at the Nation.

I hadn't realised that the Nation newspaper and its elite supporters were so powerful.

10 years ago 3G was only just coming on line and it was only 11 years ago that DoCoMo in Japan launched the first commercial 3G service.

So after 11 years of 4 Thaksin governments, 1 coup and one democrat government not trying to get 3G into service it is the Nation's fault.

Is it also their fault that Thailand is so protectionist?

How many coups were they involved in to bring Thailand to its knees like this?

Do you remember the prices of mobile phone charges back in 1993 and how many operators there were?

I do as I was part of a team from Motorola building the network for AIS and the fledgling DTAC.

[whybother]

Nobody was surprised to see who the winners are, that is true. If you have 9 plots from which 8 are needed by three companies and you have three bidders because the Nation newspaper and it's elite supporters refuse the chance to leave the third world status behind and allow foreign competition than it is not hard to predict what the outcome would have been. There was a fourth Thai bidder but that could not even come up with the deposit. The Nation should write a few editorials about why their supporters held a 3G auction back for ten years. It will never be written, one moron covers the back of another moron at the Nation.

Do you mean the "elite" supporters such as PTP MPs who are trying to make it harder for foreign investors with new "Foreign Dominance" regulations?

The "Foreign Dominance" regulations take the 49% ownership a few steps further, taking into account Directors, finance sources, and major customers and suppliers.

[asiawatcher]

The whole thing is a farce and a charade. The deposits paid to be part of the auction process was to keep the tyre kickers out. Scamming the Thai public claiming the next break in technology being 3G is going to fantastic when already a dinosaur, is simply marketing and saturation advertising over the next few years (to come).

But the core issue is - it's always all about the money. If they were all prepared to punt a tad under 5BN Baht simply goes to show you - there is a big payday to be had along the way, even if outdated, so they continue to BS the public. If there were a way to bypass these clowns to get to 4G, I would be the first in the queue.

[fstarbkk]

So then the Nation, let's see some rigorous investigative reporting of the 'same old players' and, while you're at it, every other major company, Thai and joint venture, in the country who are 'politically connected'.

I like that suggestion a lot! Wouldn't hold my breath for it to happen though. It's so much easier for them to print press releases and, at best, the oppinions of obscure academic "experts", than to get their own hands dirty from some digging around. Much healthier for their careers too, I bet.

[khunken]

So then the Nation, let's see some rigorous investigative reporting of the 'same old players' and, while you're at it, every other major company, Thai and joint venture, in the country who are 'politically connected'.

I like that suggestion a lot! Wouldn't hold my breath for it to happen though. It's so much easier for them to print press releases and, at best, the oppinions of obscure academic "experts", than to get their own hands dirty from some digging around. Much healthier for their careers too, I bet.

Rubbish. So easy to criticise the messenger. This issue doesn't require any digging as it's so blatantly obvious. The regulator (NBTC) made it blindingly clear (sic) that no more operators were welcome, especially foreign ones. As pointed out, DTAC has survived by the skin of it's teeth, sending out a very negative message to any potential new entrants.

Given the political shenanigans over 3G over many years, they would be better to just get on with it but try to get it right when the 4G licence approval is opened (probably in the distant future).

[jerrysteve]

Interesting statement: "IN THE YEARS TO COME, licences for more advanced telecommunication networks such as ne incorporation 4G telenology will be put on the table by the state."

Hmmm! I wouldn't hold your breath too long for 4G to appear on the scene in this millenium. As usual, Thailand is still very much a 3rd world country in many respects and the beat of time still goes on and on and on, while other countries are continuing to advance day by day.

A very sad little country which seems like it will always remain just a little pimple on the world's behind.