3G Winners Jointly Refute Collusion Claims: Thailand

[webfact]

TELECOM

3G winners jointly refute collusion claims

USANEE MONGKOLPORN

THE NATION

BANGKOK: -- The three winners of slots at the recent 2.1GHz spectrum auction yesterday publicly joined forces to refute allegations of bidding collusion, and urged the telecom watchdog to press ahead and grant much-needed licences to kick-start their massive investment in setting up third-generation cellular service.

The three cellular operators also said they were obligated to comply with the stated intention of the National Broadcasting and Telecommunications Commission to make it mandatory for them to offer low 3G service prices. As telecom operators, they had to comply with NBTC regulations, they said.

However, they could not yet say how much cheaper the fees would be, pending calculation of the actual overall costs each would face.

Executives of Advanced Info Service (AIS), Total Access Communication (DTAC) and True Corp said they had remained silent up to now about any allegations of bid collusion, as they were legally obliged to comply with the NBTC's silent-period rule.

However, now was the time to speak publicly about the matter, as the period had expired, they said, denying that the NBTC had forced them to hold a joint press conference to speak their minds.

It is believed that AIS and True first discussed the idea of speaking publicly on the issue, with DTAC then being invited to |join them in a three-way public presentation.

The three bid winners at the October 16 auction were AIS's Advanced Wireless Network, which paid a total of Bt14.63 billion for three slots on the 2.1-gigahertz spectrum; DTAC Network, which paid Bt13.5 billion for three slots; and True Corp unit Real Future, which also paid Bt13.5 billion for three spectrum slots.

THE COMPANIES' POSITIONS

True vice chairman Athueck Asvanund insisted there had been no collusion among the bidders. "All of us are listed companies. If we break the law, we'll be put in jail," he said.

DTAC chief corporate affairs officer Darmp Sukonthasap said the company had waited for the auction to take place and was ready to compete with other bidders on the day.

The NBTC should now go ahead and issue the licences, he added.

AIS chief executive officer Wichian Mektrakarn said the NBTC was not "a used-car auction firm", so its role was not to mint as much as revenue as possible for the government, but primarily to regulate the industry, keep it healthy and ensure the utmost efficiency when it came to spectrum use.

The NBTC's telecom committee has yet to grant the three companies the essential spectrum licences, despite its official approval on October 18 of the outcome of the auction.

It set up a panel last week to probe alleged irregularities in the bidding in an apparent effort to stem mounting criticism of the lack of competition between the three bidders. The probe is scheduled to be completed in the next 15 days.

If no irregularity is found, the telecom committee will convene to consider granting the licences. Under the auction terms, it must grant the licences within 90 days of approving the bids.

Athueck said the NBTC auction process had been developed in accordance with regulations and followed a public hearing. He had thought there would be more than three bidders taking part in the auction.

True needs to acquire spectrum slots as TrueMove's 1,800-megahertz concession contract under CAT Telecom expires next September, he added.

When asked whether AIS had benefited the most from the auction, Wichian said that was perhaps the case, as the company is experiencing congestion on its 900MHz bandwidth, which it uses to serve more than 34 million customers.

At the recent auction, AIS selected the spectrum ranges adjacent to that of its concession owner, TOT. "We plan to join with TOT in the future," Wichian added, without elaboration.

Athueck said that while he could not tell who would benefit if the auction outcome were to be invalidated, consumers would certainly lose out. Should such a cancellation occur, it would be the second time the 3G auction process had failed.

"If this one also failed, who would take part in a new 3G spectrum auction?" he said.

The watchdog's predecessor, the National Telecommunications Commission, was set to hold a 2.1GHz spectrum auction in September 2010, before it was suspended by a Central Administrative Court injunction after CAT Telecom's legal challenge of the NTC's licensing authority.

Athueck said that if any bid collusion were to be found, then the outcome should be annulled. Like Darmp, he believes that competition among the three winners in providing 3G service will be crucial to their offering low fees to consumers.

The 3G auction on October 16 has been slammed by many parties, from telecom scholars to Finance Ministry officials, for letting the three cellular firms snap up the spectrum slots at low prices, because of the perceived lack of meaningful competition. The result is a major cost to the state coffers, they maintain.

Of the nine 2.1GHz slots available, six went for exactly the reserve price of Bt4.5 billion each.

Telecom academics said mistakes in the auction terms and conditions had allowed each bidder to secure the maximum of three slots apiece and, as the NBTC had also set a low reserve price, there was a subsequent failure to promote strong competition.

Last week, the National Anti-Corruption Commission appointed a subcommittee to probe whether the NBTC telecom panel's approval of the bid results had breached the State Bidding Act. This followed a petition to the NACC by the Senate's corruption inquiry and good-governance committee on the matter.

In a further development, 10 senators and TOT's labour union yesterday filed separate petitions to the Office of the Auditor-General, requesting that it have the Administrative Court rule on the legality of the auction.

-- The Nation 2012-10-30

[jaltsc]

"True vice chairman Athueck Asvanund insisted there had been no collusion among the bidders. "All of us are listed companies. If we break the law, we'll be put in jail," he said."

As soon as I stop laughing over that statement, I might make a response, but what's the point. TIT,and it is what it is.

[Payboy]

They were all at the conference together and said that with straight faces?

[siampolee]

As an aside to this ongoing farce and probably a bit off of topic I see that Laos is pushing forward with the introduction of the 4G system

Seems as if Thailand is intent on going backwards in the telecommunications industry as well as the rice industry.

No doubt the size of white envelopes and the people who received them has caused the upset on the 3G tender auction

[jerrysteve]

Whats Interesting is Thai Visa News just had a blurb on the County of LAOs getting ready to follow SINGAPORE'S lead in implementing

4G. That is Amazing....It just goes to show you that while Thailand is Stuck in the Middle of Nowhere Standing Still, the countries around

them are moving forward...How Nice!

Edited October 30, 2012 by jerrysteve

[Tatsujin]

My new "rule" . . . any time now I hear a businessman, government official or politician say or state something publically, I reverse what they say and take that as being the truth . . . seems to end up being more accurate and truthful that way.

[jerrysteve]

We say there are 3 types of people in this world. 1. People that MAKE things happen. 2. People that WATCH things happen, and 3...People that WONDER what HAPPEN...thats THAILAND

WHOOPS there goes another HUB

Edited October 30, 2012 by jerrysteve

[skippybangkok]

Very simple thought..... Who stands to loose. With ICT ministry loosing control over the airwaves, and TOT and CAT not being able to rely on their standard business model ( lay back, do nothing, collect massive concession fees ).... It would come as no suprise that some one is trying to block this.

If you strip out concession fees , TOT would go belly up in a few years when the concession cash runs out. It's the beginning of the end for TOT ( turtle organization of Thailand ) and possibly CAT

[infernalman7]

It's also pretty funny to me that some keep mentioning about 4G when in reality there is no way you can have 4G without 3G. (4G cannot make calls yet, no phone today supports VoLTE)

Regardless of that, 4G in Laos is very interesting. I'd like to see how many people can take advantage of it actually when most 4G devices' prices are probably out of reach, even to the slightly richer Thais.

[asiawatcher]

Of course they can refute it - was there any doubt they would not? Such a waste if an article and time.

[FOODLOVER]

How do you join forces to deny collusion?

[whybother]

Why would they need to collude? There were 9 slots and 3 bidders. It doesn't take a brain surgeon to work out what is going to happen.

The only surprising thing was that some of them bid over the reserve price.

[Soupdragon]

How do you join forces to deny collusion?

Colluding to deny collusion, brilliant.

[webfact]

11 Senators petition ombudsman on 3G auction

By Digital Media

BANGKOK, Oct 30 – Eleven senators have petitioned Thailand’s Administrative Court by means of the Office of the Ombudsman Monday seeking a court ruling on whether the National Broadcasting and Telecommunications Commission (NBTC) telecom committee is authorised to endorse the recent 3G auction result.

Senator Paiboon Nititawan submitted the petition from the upper house of parliament to Chief Ombudsman Phanit Nitithanprapas, arguing that the telecoms committee has no authority to endorse or issue a licence, therefore their act could be deemed as violating the charter. The senator pointed out that the NBTC is empowered by the constitution to do so.

The chief ombudsman said the petition would be thoroughly and urgently vetted before deciding whether to forward it for the court's consideration.

Meanwhile, top executives of the three major mobile operators—Advanced Info Service (AIS), Total Access Communication (DTAC) and TrueMove—issued assurances to the public in a joint news conference that the bidding procedures were conducted in a transparent manner.

The three companies said that the alleged collusion was out of the question as they are listed companies in the stock market, and if that did occur, the corporate executives and the bidding panel could face five-year prison terms.

AIS Chief Executive Officer Wichian Mektrakarn representing the country's largest mobile phone operator urged all parties concerned not to abort the auction, saying Thailand's 3G system now lags far behind neighbours in the region and the country stands to lose the opportunity to develop its infrastructure. (MCOT online news)

-- TNA 2012-10-30

[MaxLee]

Ladies and gentlemen, welcome to the corruption polluted Telecommunication Broadband Authority of Thailand, where government authorities and money hungry Telecom Giants reap the benefits for their own and customers pay for an overpriced service for an INCONSISTENT QUALITY!!!!!

Get ready to wait for another year, in order for the NBTC and other so-called regulation authorities to investigate into the SCAM AUCTION, in order to wait for another 2 years, ,.... and if no evidence could be found,.... it could take another 2 years, in order to resubmit the "investigation into that scam auction" ,.... but wait, something went wrong in the previous process of resubmitting the "investigation process, because the greedy telecom giant owners, dealt another billion baht somehow under the table, so it will take another 5 years , in order to rearrange the "investigation process", and in order to get that approved, it will take another 10 years, until it gets into the finalization process,.... until then 30 years have passed, and it still isn't right, and the rest of the world will have 10G or higher already

Anymore questions?

[laurentbkk]

while they non stop blablabla blablabla Laos is getting 4 G ..... I call that a slap in the face of Thailand .

[asiawatcher]

By the time Thailand gets its collective asses into gear, 5G will be in outer Mongolia and they will try to remember what 3G was.

[Nickymaster]

"True vice chairman Athueck Asvanund insisted there had been no collusion among the bidders. "All of us are listed companies. If we break the law, we'll be put in jail," he said."

As soon as I stop laughing over that statement, I might make a response, but what's the point. TIT,and it is what it is.

Those executives are really funny.

If you have connections and/or money you don't have to go to jail in Thailand. That's how it is.

[saltandpepper]

while they non stop blablabla blablabla Laos is getting 4 G ..... I call that a slap in the face of Thailand .

So is Myanmar!

[Thai at Heart]

The AIS guy is correct. it is not the only motivation to lever as much money as possible up front.

TOT and CAT are going to suffer, but good. They are the single biggest brake to development of the telecoms business in Thailand. 3g is 10 years old already. Let's hope they get it up and running and we can look forward to 4g on a few years time.

[ib1b4]

Why would they need to collude? There were 9 slots and 3 bidders. It doesn't take a brain surgeon to work out what is going to happen.

The only surprising thing was that some of them bid over the reserve price.

I believe only AIS bids were higher than the reserve price, do the sums 4.5 billion x 3 = 13.5 billion. which is what Dtac & True bid?

[Thai at Heart]

Why would they need to collude? There were 9 slots and 3 bidders. It doesn't take a brain surgeon to work out what is going to happen.

The only surprising thing was that some of them bid over the reserve price.

I believe only AIS bids were higher than the reserve price, do the sums 4.5 billion x 3 = 13.5 billion. which is what Dtac & True bid?

Was a very stupid formulation for the auction. They should have encouraged one more player into the market by liberalising the rules, and should have auctioned different sizes of spectrums to make some more attractive than others. Just google "mobile phone auctions" and there are loads of articles about how auctions have been structured to get a balance of competition, high value, low value, guaranteed coverage, new players into the market.

Of course, this assumes that someone with some understanding of competitive game theory was involved in putting together the thing in the first place, which there patently wasn't. Put up 9 equally sized slots with 3 competitors and of course, you get this result. However, as I wrote earlier, it isn't the only issue to try to lever as much money up front from the companies. This is what occured in the UK, and 3g was too expensive for many years, and saddled the companies with mountains of debt, on the other hand, the Dutch auction was very similar to the Thai one and generated a low amount of revenue for the government.

I can't believe they are going to rehold the dam_n thing, that will just push Thailand further away from neigbouring countries, but something has to give in this market, and concessions are a broken model and just gum up everything. Licensing auctions are the way forward, next step to allow a new player into the market by liberalising the ownership rules. Problem is, CP has never allowed that to happen in any market in Thailand in which they have a significant stake, cause they obviously know how to serve the country(cough cough, themselves) to the True benefit of the country.

[Rionoir]

It amazes me that people that worry about "face" so much would actually have the desire to go in public and embarrass themselves like this. They can't possibly believe anyone is buying this, DO THEY? They are only making themselves look like fools on public TV and in the media.

[skippybangkok]

TOT and CAT are going to suffer, but good. They are the single biggest brake to development of the telecoms business in Thailand. 3g is 10 years old already. Let's hope they get it up and running and we can look forward to 4g on a few years time.

Finally someone who sees it for what it is........... Cheers !

Edited October 30, 2012 by skippybangkok

[lomatopo]

Note that this is a multi-page report, continued via the link below, then on to a longer PDF.

Thai 3G auction was not too cheap

Dominic P Arena/Value Partners | October 25, 2012

Citizens, businesspeople and industry professionals everywhere are congratulating the NBTC for finally injecting much needed new bandwidth into the Thai telecoms market, at a price which is arguably fair market value for all – State and Industry alike. Commercial Mobile Network Operators (MNOs) will now use this spectrum to deploy and offer a wide array of affordable wireless broadband (3G and 4G) services which will bring Thailand massive economic and social benefits.

However, whilst it seems everyone agrees on the benefits 3G and 4G can bring to Thailand with the allocation of the 2.1GHz spectrum, it also seems that the final auction result has caused much heated discussion. This discussion has been fuelled by threats of legal challenges and unfounded sensationalist claims of “super low prices bringing a windfall to private operators at the expenses of the State.”

http://www.telecomas...s-not-too-cheap

[bigbamboo]

How ironic they all sit together and jointly claim there was no collusion.

[whybother]

How ironic they all sit together and jointly claim there was no collusion.

Did you see the photo of them arm-in-arm BEFORE the bidding?

But my question is, why would they need to collude?

Sent from my HTC phone.

[theajarn]

Collusion? Collusion? Who would have thunk? More importantly -- WHO THE F CARES???

EVERYTHING in this country is a result of "collusion". Let them get it over with so Thailand can "move ahead" with 3G... now that the rest of the world already has 4G/LTE ~!!!

FFsake... as if this country isn't the capital of monopolies already...

[Thai at Heart]

How ironic they all sit together and jointly claim there was no collusion.

Did you see the photo of them arm-in-arm BEFORE the bidding?

But my question is, why would they need to collude?

Sent from my HTC phone.

No need whatsoever for them to collude.

[Basil B]

It is hard to think Thailand still fighting it out over 3G when here in the UK, 4G has just gone live today in 11 cities.