Thai politics: Fierce rivalry in cellular market bodes well for consumers

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BURNING ISSUE
Fierce rivalry in cellular market bodes well for consumers
NOPHAKHUN LIMSAMARNPHUN
THE NATION



BANGKOK: -- WHILE the latest auction of 1800 MHz spectrum for the fourth-generation (4G) telecom licences was hailed for its transparent bidding, Thai consumers will gain more if the upcoming 900 MHz spectrum leads to additional operators and greater competition in the marketplace.

For the past several years, the Thai cellular telecom market, worth hundreds of billions of baht annually, has been dominated by three players - AIS, Dtac and True - all of which provided a 3G service.

At present, the maximum 3G rates are less than Bt0.69 a minute for voice service and Bt0.26 per megabyte for data service.

Consumers would be better served if there was a fourth operator, which in this case could be Jasmine International (JAS), which is currently a broadband service provider.

JAS and Dtac lost out in last week's marathon 30-hour bidding for the 1800 MHz spectrum in which True and AIS were declared the winners. True and AIS secured licences for the frequencies for the relatively expensive price of around Bt40 billion each.

In fact, JAS conceded defeat only after the bidding exceeded Bt39 billion, allowing True to win at Bt39.8 billion, while AIS got the other 4G licence for around Bt40 billion.

Both JAS and Dtac are expected to join next month's 900 MHz spectrum bidding, along with True and AIS. It is likely to be another four-way contest for precious spectrum.

While the National Broadcasting and Telecom Commission (NBTC) has said its terms and conditions for 4G licence bidding are designed to ensure consumers are not taken advantage of, especially in terms of pricing for 4G services when compared to the current 3G, greater competition among operators is a better bet for long-term consumer benefits.

According to research by JP Morgan, the bid prices for Thailand's 1800 MHz spectrum far exceeded analysts' expectations as each licence was estimated to cost around Bt15-20 billion.

Such a huge premium will also set high expectations on the pricing of 900Mhz spectrum auctions, which will take place next month.

Given Thailand's relatively highly priced 1800 MHz spectrum, one of the world's most expensive based on recent auctions, the country's 4G licensees will face a big challenge in recouping their investment and managing costs to generate profit for their shareholders.

When the competitive pressures are unfettered, users will be sure get more bang for their money as cellular and related services become a necessity in today's technology-driven lifestyle.

Increased competition will also help drive the country's ambitious digital economy as corporates and small and medium enterprises will benefit from cheaper 4G services for their e-commerce, e-banking, e-government and other Internet-based services.

This will also lead to increased international competitiveness here and among Asean countries as IT infrastructure is one of the major indicators of competitiveness.

These benefits can materialise relatively quickly - as early as next year - especially for the IT and related sectors, since operators could just upgrade their existing 3G telecom towers and related equipment to provide the much faster 4G service.

In fact, the Thai telecom market is one of the most challenging among emerging markets, given the presence of big international players, including Temasek Group of Singapore in AIS, Telenor of Norway in Dtac, a Chinese stakeholder in True and potentially a Japanese stakeholder in JAS.

All these big players along with their Thai counterparts are sure to compete for the most consumer benefits if the economic and business conditions are right.

Source: http://www.nationmultimedia.com/politics/Fierce-rivalry-in-cellular-market-bodes-well-for-c-30273189.html

-- The Nation 2015-11-18

[zaphod reborn]

I don't see rates dropping or service improving. I just see more money being put into the pockets of the executives from CAT, True, AIS and TOT, and the politicians who brokered this deal for their fat-cat friends.