Things seem to be disintegrating quite badly for Thailand’s 4G auction now that things are getting real.
On 1800, the national broadcasting and telecommunications commission has sheepishly announced that instead of 30 MHz, it will only be auctioning 25 MHz. In addition, 2600-MHz might now be totally out of the picture after MCOT won a court case against the regulator to retain control of it.
The problem with the expired concessions on 1800-MHz is that the 25 MHz that was available for auction is not contiguous. From low to high we have 12.5 (True), 25 (Dtac - ends 2018), 12.5 (DPC / AIS), 25 (Dtac/CAT unused ends 2018).
The plan was to move Dtac’s lower 2G block up and add another 5 MHz from the upper block that CAT and Dtac agreed to release, yielding 30 MHz (up for auction), 25 MHz (Dtac) and 20 MHz (CAT/Dtac depending on who you ask).
The regulator has just rejected the extra 5 MHz saying that they could not accommodate it in time, despite the new pre-Digital Economy Commission ordering the spectrum swap. However, if one were to look at the situation carefully, a number of serious legal and technical questions arise if the defragmentation were to go through.
Were the swap to go through, the problem is that the Digital Economy Commission does not have any law behind it just yet. Everyone knows that the new digital economy laws will give full power over telecom back to the Prime Minister as chair of the digital economy commission (and not even the cabinet, as the DEC would seem to operate separately from the cabinet).
The pre-DEC ordered the spectrum defragmentation but without any law backing it up, were the NBTC to go ahead, it could be downright illegal as they would be auctioning off ex-True and current Dtac spectrum. Dtac moving up would mean they essentially would squat on ex-DPC (AIS) spectrum.
As it stands today, the current frequency act allows for allocation of spectrum only through competitive auction. The draft NBTC act which is lost in limbo along with other digital economy laws, would make it legal, but that law has not been passed by the legislative yet.
NBTC secretary general Takorn Tantasit said that the regulator would stick to the original plan to auction two 12.5 MHz licences which brings us to a technical issue - a waste of 5 MHz. With most LTE carriers running in 5 or 10 MHz (or more) blocks, what good is 2.5 MHz? Good enough to run a narrow band 1.4 MHz LTE carrier? Or roll out a new 2G network? Neither makes sense and it is more likely the carriers will just use them as big, very, very fat guard bands.
Or is the auction design so that the new entrant (Jasmine) can run a small 2G network for voice alongside 10 MHz of 4G?
Throwing away 5 MHz is bad, but what of the reserve price? The price is talked about per MHz, but if you are buying 10 MHz and have 2.5 MHz you are forced to buy that cannot be used, would that not be tantamount to unfairly increasing the auction reserve price by 25%? Or, assuming a new entrant, would that 2.5 MHz essentially be a tax on incumbents as the new entrant can and would use it for voice?
Never mind that the NBTC is drawing ridicule on social media for talking about a voice price cap for the 4G licence. 4G voice? VoLTE is hardly mainstream and again, the NBTC is changing the rules of the status quo by putting new rules into the new 4G licence. They did this with the 3G licence, forcing down prices through threats of exclusion. This may be effective, but it is anything but professional.
The fact that the announcement cutting 30 MHz down to 25 MHz was made after the companies had bought bidding documents is just adding insult.
Higher up in the 2600-MHz band things are even messier.
In March, former deputy prime minister and chair of the pre-Digital Economy Commission Pridiyathorn Devakul ordered the DEC to look into reclaiming 128 MHz of 2600-MHz for 4G for a future auction. In April, Pridiyathorn said MCOT has offered to return 60 MHz of 2600-MHz (2356-2584 MHz and 2592-2608 MHz) in exchange for $309 million (100 million naht). Last month Pridiyathorn lost his job and now MCOT won a court case and has no plans to give up 2600-MHz any time soon.