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The $4b question - will True pay for a sub-GHz monopoly
If $2 billion is expensive for 10 MHz of spectrum, is $4 billion cheap for the final part of a sub-gigahertz monopoly? It is a question I have been asking myself for weeks from when the regulator first mulled a new auction after Jas Mobile walked away from its $2.1 billion winning bid for 10 MHz of 900-MHz spectrum out of the 20 MHz the country has available.
Initially the National Broadcasting and Telecommunications Commission Secretary-General Takorn Tantasit said that for the new auction, previous winner TrueMove would be allowed to participate. He said he is certain and insisted the company would be allowed in.
The NBTC board voted against this citing the existing spectrum cap, and issued a set of auction rules excluding TrueMove.
However, it seems like Takorn got the last laugh as the junta - not the government, but the junta itself - used Article 44, the absolute power clause in the interim constitution to overrule the NBTC board and issue a new set of rules
The junta moved forward the auction date by a month from June 24 to May 27 (precluding or at least severely limiting the public hearings), ordered the NBTC to draft new rules and report back to the junta leader (thereby making a mockery of the independent nature of the regulator), and crucially ordering the NBTC to ensure there is competition (thereby ensuring that True would be let in to compete with AIS given Dtac’s stance that they are not interested in spectrum at this price).
There was also a bit on extending AIS’ 2G concession out to return happiness and protect the man-in-the-street but that was by and large a red herring. AIS had already put in place a 2G roaming agreement with Dtac and one wonders just how many users have a 900-MHz only 2G phone that cannot roam to 1800.
The question at this stage seemed clear. The junta was looking at a very unhappy True if the new auction went for significantly less than what True paid for in the first round and nobody - not even the head of a military junta - would dare make True unhappy. So they offered a fudge and put the ball in True’s court. Sure $2.1 billion might be very expensive for a 10-MHz 900-MHz licence but would $4.2 billion be cheap for a sub-GHz monopoly?
The 700-MHz band is stuck in broadcasting limbo and used as a bargaining chip between the telecommunications and broadcasting sides of the regulator (give us 470 and we will give you 700) and 850 sort of already is True’s.
Then something odd happened. There was a leak. Not quite of Wikileaks proportions but someone on Twitter by the name of @nbtcnews decided to leak a blow-by-blow account of a secret meeting between three government bigwigs and AIS and True which I wrote about with a level of circumspection (http://www.telecomasia.net/content/thai-govt-leans-ais-surrender-8m-users-true).
In a nutshell, Deputy Prime Minister Wissanu Kru-nam, Takorn Tantasit and ICT Minister Uttama Savanayana tried to force AIS to sign an MOU would have forced AIS to cancel its roaming agreement with Dtac, sign a new one with True and would stop the number portability argument between the two giving the NBTC the final say (probably in True’s favor given that the only problem lies in the millions of users AIS has denied porting due to lack of signature).
What I did not write about in that original article was the name of the big boss behind the plan (that might get me in attitude readjustment - the Thai version of reeducation camps) and a few whys and wherefores that could not be collaborated.
Do read the posts for yourself with the help of Google Translate but hold onto your socks.
The leaker said that someone in that room threatened to unleash section 44 on AIS if they refused to comply.
However after the article was published it was interesting to see Takorn lash out at the anonymous leaker. If he had just ignored it would have given much less credence to the leak but he did respond angrily saying that AIS would soon sign a somewhat modified version of the MOU.
I tried to ask AIS if they had indeed signed it but all I got back from my sources were smiley faces.
NBTC commissioner Supinya Klangnarong did confirm one thing to me - she said that while she has not been personally threatened by Takorn, she did confirm that the “magic number 44” was now everywhere in the NBTC.
But things only clicked after the junta appointed legislature rubber stamped the new NBTC act. There are many issues with the new frequency act but one point stands head and shoulders above the rest.
Under the current law the regulator can only allocate spectrum via competitive auction with no room for discretion and there was no sub-letting or secondary trading allowed. However, under the new law the regulator can use other means of allocation and it now allows others to use the spectrum if it does not affect the licence holder
To quote Baker & McKenzie’s Dhirapol Suwanprateep in the Bangkok Post, “If the NBTC anticipates that the auction winner may not be able to use a frequency to its full potential, it may allocate frequency on an appropriate bandwidth at the time of the auction instead of taking away the license holder’s rights after the auction.”
In other words if come 27 May whoever wins and decides they do not need to use the spectrum (maybe because they already have some 900-MHz spectrum) the NBTC is in its new rights to allocate appropriately, whatever that means. But what it does mean is that winning will only be the start of negotiations with the government and the junta now that the NBTC is under its direct control.