Thailand 3G

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Telecoms sector in disarray

      **NTC refuses to issue development licences **

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[li]Published: 24/09/2010 at 12:00 AM[/li][li]Newspaper section: News[/li][/ul]

Telecommunications development in Thailand has ground to a halt after the agency responsible for issuing licences abruptly stopped doing so until its legal authority is clarified by the Constitution Court.
The National Telecommunications Commission (NTC) made its decision after it lost an appeal yesterday over the auctioning of licences for the planned 3G network.
The auction, originally planned for Monday, was halted by the Central Administrative Court last week. The Supreme Administrative Court yesterday upheld the ruling.
See also:
MPs urge joint panel to fix frequency bill
3G legal clarity awaited

NTC commissioner Natee Sukolrat said the agency was now unsure of its legal status to issue licences and would need a judgement from the Constitution Court.
It will cease issuing licences for the radio spectrum, particularly broadband internet or Wi-Fi on the 2.3 and 2.5 GHz bands.
The Central Administrative Court, hearing an injunction application from CAT Telecom, cited three reasons for calling off the auction.
First, the NTC’s master plan for the allocation and administration of frequencies had to be drawn up by a special committee, which had not yet been established.
Second, the injunction stopping the auction would cause little damage as only three bidders had qualified to participate in the race for the 3G licences.
Third, it would take at least four years for the 3G networks to be built and cover the whole country. The court felt the absence of 3G networks would not disrupt the administration and the public services of the state.
Despite the setback, Col Natee encouraged operators and related agencies not to give up on pursuing the higher technology even though 3G licensing was now not possible.
“It does not mean that 3G will be impossible forever. The NTC will not give up,” he said.
The NTC will refund the 1.28 billion baht deposit put down by each of the three bidders as well as their 500,000 baht processing fee. It will appoint a working panel to assess the damage incurred from the aborted auction and compensate those affected where necessary.
Col Natee estimated the initial damage at about 80 million baht, covering the cost of hotels, system installation, exhibitions and road shows.
Meanwhile, the Senate has called on NTC executives to explain their auction expenses before its committee on the protection of the rights of consumers next Thursday.
Sukhum Chuenmana, chairman of CAT Telecom’s labour union, who was at the Supreme Administrative Court yesterday, said he was delighted with the court’s ruling and felt more confident about the justice system.
“We won’t make any more moves over this matter. We won’t file criminal charges against the NTC,” Mr Sukhum said.
“We think that what we have done in blocking the distribution of the 3G service is a success because we have protected the nation’s interest.”
Finance Minister Korn Chatikavanij said yesterday the government would look at two avenues to solve the problem.
It will speed up the establishment of the National Broadcasting and Telecommunications Commission (NBTC) by pushing through a new law. It should come into force this year and the NBTC should be set up within six months.
The government would also look at ways to convert the existing 2G concessions into 3G through the Public-Private Joint Venture Act. TOT Plc has appointed a committee to investigate this, he said.
But State Enterprise Policy Office director Supha Piyajitti said the Council of State would need to interpret if the government could convert the existing revenue-sharing base for mobile phone concessions to 15-year licences.
Ms Supha said converting the existing 2G concessions to 3G licences without extending their service years would not be financially attractive as the operators would have only three to eight years to turn a profit. True’s 2G concession has about three years to run, while AIS has five years and DTAC eight years.
She said approval for the upgrading of the 2G network to 3G should be done before the NBTC was established as the law Mr Korn is pushing through stipulates that once allocated, mobile phone spectrums could not be transferred to others.
She said TOT’s 3G nationwide project was not affected by the court’s ruling because the agency obtained its 3G licence before the NTC came into existence.
TOT plans to propose its 19 billion baht 3G project to the cabinet for approval soon. If endorsed, it could be operational in six months.Anuparb Thiralarp, an independent telecom expert, said the Supreme Administrative Court’s verdict would not disrupt the country’s development and nor would it retard industrial growth.
In fact, banning the 3G auction could be a blessing for the telecom industry and the NTC as it offers a chance for the commission to clear existing legal wrangles and the complicated problems that lie ahead.

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Thai 3G auction derailed
By Nicole McCormick, Senior Analyst

Last week’s 3G auctions in Thailand were officially suspended yesterday. The National Telecommunications Commission was unable to overturn government-owned CAT Telecom’s injunction against the auctions.

CAT had argued that the yet-to-be-created National Broadcasting and Telecommunications Commission (NBTC) had constitutional responsibility for the auctions, not the existing National Telecommunications Commission (NTC). Thailand’s 3G auction could now be delayed until 2012, or even longer. And that’s bad news for the country’s private operators - AIS, DTAC, and True Move.

Monday’s auction foiled at the eleventh hour

Two months ago, things were looking rosy for Thailand’s 3G auction. In July 2010, the NTC published its 3G plan in the Royal Gazette, and Thailand’s 3G auction rules became law. The NTC set an auction date of 20 September 2010.

This was a major breakthrough for the NTC - the country’s 3G auction plan had been debated for five years. On 14 September 2010, AIS, DTAC, and True Move all qualified to participate in the auction, after a last-minute scare about foreign ownership rules.

With a week to go until the auction, government-owned CAT Telecom and TOT were still quiet. But the threat of a potential lawsuit by CAT or TOT lurked in the background. Their unhappiness with the auctions was a consequence of new 3G licensing rules, under which 3G operation licensing fees were to be paid to the NTC and not them. Currently, AIS, DTAC, and True Move pay more than 20% of their annual 2G revenues to government-owned CAT and TOT.

CAT launched legal action the week before the auction, and on 16 September Thailand’s Central Administrative Court granted CAT an injunction halting the planned auction. The injunction was granted on the grounds that the revamped constitution of 2007 stipulates that the NTC be replaced by a new unified regulator, the NBTC.

The NTC’s appeal was overturned yesterday by the Supreme Administrative Court. The Constitution Court will now take several months to decide whether the existing regulator has the legal right to conduct the auction. If not, management of the 3G auction process will fall to the new unified regulator, which lacks enabling legislation at the moment.

2100MHz auction postponed until 2012?

If the final verdict in the Constitution Court is a win for CAT, the 3G auction process will be conducted by the NBTC, which still needs its enabling legislation ratified by the Thai parliament.

Even if the government rushes this through the House of Representatives so that it can meet its year-end or early 2011 deadline, finalizing the appointment of the NBTC’s commissioners will probably take months. Then the NBTC has to begin the grueling task of drawing up its frequency master plan and other 3G auction details, which could take several more months.

Thailand’s 3G auction could be pushed back until 2012. The delay could be even longer - AIS chief executive Wichian Mektrakarn has reportedly predicted that it could take at least three years for the NBTC to be established.

The best that the private operators can hope for is that the NTC prevails against CAT in the Constitution Court. Even if this happens, the auctions will have been delayed for months. Meanwhile, AIS, DTAC, and True Move are stuck in a 2G time-warp, relying on GPRS/EDGE to support customer demand for increasingly advanced and bandwidth-hungry applications.

The government is now reportedly considering allowing commercial 3G services to be rolled out in 2G spectrum under the existing 2G concessions. Operators currently offer in-band 3G services on a non-commercial trial basis. Significantly, these services are provided under existing concession arrangements with TOT/CAT, requiring operators to continue paying high 2G revenue-sharing payments.

And the final insult? TOT-owned 3G operator Thai Mobile is reportedly preparing to ask Cabinet for permission to expand its 3G network - which is used by several MVNOs - nationwide next week. Meanwhile, the private operators watch on helplessly.

Bron The Nation 27-09-2010

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Operators may help govt resolve deadlock
By Usanee Mongkolporn

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The task of ushering Thailand into the 3G era is now a job for the government instead of the national telecom regulator, but it remains to be seen if it can achieve the goal.**

The government is urging private telecom operators to provide the 3G wireless broadband service on their existing spectrums, following a court ruling that suspended the 3G licence auction that the National Telecom-munications Commission (NTC) hoped to stage last week.

The Cabinet is also expected to consider a plan by the TOT this week to roll out a new, nationwide 3G network.

All three private cellular operators, which have already launched the 3G service on existing spectrums, said it was not financially wise to put more investment into 3G, as their concession terms are due to end in coming years.

But Finance Minister Korn Chatikavanij has said the solution is to convert their concessions to NTC licences with common conditions and terms. This would enable them to continue their cellular business and the 3G service on existing spectra on the same footing.

But a telecom industrialist doubted the NTC would grant the telecoms their existing spectra after concessions were converted, because the watchdog is uncertain about its licensing authority.

The NTC is waiting for the Central Administrative Court to rule if it has licensing authority, after CAT Telecom opted to take the matter to court. The case could take time before a decision is reached.

While the Telecom Business Act allows the conversion of concessions into licences, the terms of licences must be equal to the remaining concession terms, instead of the equally long period wanted by the Finance Ministry.

The government said another option to make 3G -2.1GHz licences available soon was to quickly set up the National Broadcasting and Telecommunication Commission (NBTC), but telecom industrialists doubt the establishment process can be done quickly or smoothly.

Telecom operators have realised they might have to solve the 3G deadlock by approaching the authorities and proposing solutions, to help push proposals into reality.

A source at one telecom operator said there were ways out of the 3G deadlock. “Nothing is impossible,” he said. There might be an attempt to ask the government to seek ways to extend the concession terms to enable the telcos to continue doing businesses and make it more viable to further invest on the 3G service on existing spectrums."

He referred to the extension of a concession term for private telecom operators by TOT and CAT many years ago. But in 2007 the government’s legal arm, the Council of State, ruled that the practice and other related telecom concession amendments did not follow rules in the 1992 Public-Private Joint Venture Act and were not approved by the Cabinet.

As the current regulatory set-up did not support telcos rushing full steam into 3G service, he said there might be an amendment in the provisional clause of the frequency allocation bill formulating the NBTC in order to solve the 3G deadlock."

Adding a clause on the provisional clause may be the way out."

Bron: The Nation 27-09-2010