GSMA report states the obvious on Thai digital economy

11 May 2015

The GSM Association has released a report on Thailand’s digital economy that manages to skirt around the two elephants in the room - the lack of clarity on spectrum actually being offered and the draconian, totalitarian digital economy laws.

“Based on the modeling we have conducted, we estimate that if the Thai authorities are able to facilitate the development of a vibrant broadband market (which will also meet the targets set by the Digital Economy Plan), broadband connections penetration in the country could increase from 52% in 2013 to 133% by 2020. What this implies for the Thai economy is that a cumulative GDP increase of $23 billion (730 billion baht) could be created by the end of 2020),” was the big financial headline.

A few paragraphs were dedicated to the importance of an independent regulator that is structurally and functionally separate from the government - exactly the opposite of what the Digital Economy laws will do. Of course, the GSMA did not point that minor detail out.

It also spoke of how the existence of state telcos CAT Telecom and TOT Telecom (sic) make it ever so more important that the regulator is independent from government. Either someone did not slip them the note on how the military have moved into positions of power in the state telcos post-coup or again, they were too polite to make that connection in print.

A few things I found surprising was the GSMA’s focus on mobile payments. Years ago, I remember talking to Dtac who pointed out that there was no unbanked bottom of the pyramid in Thailand to focus on unlike in Pakistan or Serbia where Telenor had embarked on major banking forays. Thailand’s banking network was very, very good already so mobile payments would be competing with banks rather than filling unmet demand.

Another was how the GSMA called for no more concessions. Unless the Dear Leader is having a brainstorm, nobody is talking about new concessions and the last ones will expire in a few years moving on to a licensing regime.

The report’s take on TrueMove’s 850 was verging on cute, for lack of a better word, first calling it a concession in the main text, then in the footnote, saying, “..the 850MHz service from True is based on a wholesale-resale model whereby a subsidiary of True leases network equipment to CAT Telecom, with True reselling CAT Telecom’s 3G services under its ‘Real Move’ brand”. I just call it a fudge.

However, the report called for a quick action for 900 and 1800 as well as 700, 2300 and 2600. I think that going for a quick auction without first sorting out the future of 1800 and 2600 is a bad idea.

As I have written too many times, the way the current 1800 spectrum is laid out, there are two 12.5-MHz non-contiguous blocks that can be put out for auction. Dtac is happy to give up its unused (and contested) 25 MHz and move its existing 25 MHz down so that a contiguous 50 MHz (or at least 25 MHz) will be available.

Even if the early return of 25 MHz does not go through, juggling the spectrum around would mean that two slots of 10 MHz and one 5 MHz (or 10 MHz and 15 MHz even) could be auctioned instead of two 12.5 MHz slices that would be a waste of precious 5-MHz of 1800 spectrum.

A waste, unless someone wants to tread into the unknown and run 1.6-MHz LTE carriers on that 2.5-MHz bit for something.

The report also did not address the issue of TDD or FDD on 2.5/2.6 GHz. As things stand today, the only spectrum offered on 2.6 would only allow Chinese-style TDD LTE on Band 41, not the more popular band 7 FDD.

Reading between the lines one might think that the GSMA prefers to waste 5 MHz of precious 1800 rather than wait for it to be defragmented and higher up on 2.6, the same logic for more spectrum now would lock Thailand into Chinese-style Band 41 rather than the standard band 7.

I asked the GSMA, and boy did I try. Three days of pestering them later on Friday evening I finally got a reply.

“Please find the answers to your questions below,” came the long-awaited response, followed by nothing. Either they had a cruel sense of humor or, well, they really did not want to say anything to upset the powers that be.

Oh, well, life goes on.

I must say that I’ve changed my mind a bit when it comes to band 41 2.6-GHz TDD-LTE.

I had an exchange with Ashish Dayama, head of TD-LTE marketing at Nokia, who told me that TD-LTE is live on every continent except Antarctica and the Moon (not that I ever considered it a continent). So no, it is not a Chinese thing anymore.

There are 11 TD-LTE band 41 networks today, including Sprint in the United States, which Nokia supplies.

He also said that there are 457 band 41-compatible devices on the market today.

Just 457? Or is that supposed to be a large number?

The problem is that only certain variants of mainstream phones do band 41. The Samsung Galaxy S6, for instance, is sold in Thailand in the SMG-920F variant, which does not support band 41. The SMG-9208 variant does. So they exist, just that they are not the ones most of us can buy or have bought today.

One major exception is TrueMove’s house-brand phone, the Smart 5.5 which supports both 7 and 41. I wonder what made them decide to sell band 41-compatible phones a year before 2.6 was even being discussed.

From the network point of view, Dayama said it made no difference. Nokia uses the same Single RAN Flexi Multiradio 10 Base Station for TDD or FDD.

The regulator seems to think that it can hold a 900/1800 auction today and sort out the rest of the problems such as Dtac’s return of 1800 and reclaiming more on 2600 for band 7 another day.

Obviously it does not work that way. Wasting two 2.5-MHz slots for a generation is bad and clarity is needed on 2600. If they can reclaim more spectrum back to make it band 7, then it will be much more valuable than using it for band 41 despite what Nokia says.

If the powers that be can make it band 7, then the carriers can afford not to bid all out for 900 and 1800 and instead save their pennies for 2600. Investors need to know now, before the 900/1800 auction, not six months down the line.

Honestly not knowing is one thing. Incompetence and making the rules up as you go along has long been Thailand’s long-term strategy. But knowing which way 2600 will go and telling only the junta’s inner circle would be downright evil. Not that good people would do such a thing, of course.

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