More DTAC bullying by regulators

Don Sambandaraksa

More DTAC bullying by regulators

January 26, 2012

There is a difference between running a telco business and regulating a telco industry, an analogy being the difference between a football team manger and a referee. However, it is a difference that Thailand’s new regulator seems to have missed in all the announcements last week.

In a move that can only be described as micro-managing the players, regulator the National Broadcasting and Telecommunications Commission has threatened DTAC with repercussions up to revocation of DTAC’s concession if quality of service continues to slip. The warning was motivated by the operator's repeated network crashes over the last month and a half. It has also ordered a halt in database migration until further notice.

Apparently, the NBTC did not buy in to DTAC’s explanation that the network outages were caused by unbelievably bad luck - a car crash severing one fibre line followed by a bush fire taking out the redundant link within the space of three minutes being the cause of its latest network crash.

Newspapers were out for blood. “DTAC suffers mass exodus due to network outages,” one leading English newspaper’s headline went. Another Thai daily ran the headline, “DTAC unable to answer to network crashes.”

Only, the so-called mass exodus amounted to 3,000 of its 23 million users leaving the network in December up from the usual 1,000 a month. That works out at 0.01%.

Put another way, DTAC may have suffered network problems, but 99.99% of its users decided not to jump ship in December.

The public relations onslaught against DTAC was spoon-fed to the media by one of the new NBTC commissioners who also in the same week announced a price cap on significant players. AIS and DTAC, with a market share of 43% and 30% respectively, will soon be faced with a 0.99 baht per minute maximum price cap for voice calls. Third placed TrueMove escapes it for now and the same regulator is considering whether to treat TrueMove and TrueMove H as one entity or two in its calculations.

Rather than focusing on micro-managing each network, ordering pauses in database migration, examining network rooms and giving outrageous headlines to the press, perhaps the regulator should play the role of referee and ensure a fair and level playing field and let the market decide.

Only, the market cannot function as is. The differences in time left on concessions (AIS runs out in 2015, DTAC in 2018 and TrueMove now has a new quasi-concession) and the wildly different cost base (AIS and DTAC pay huge fees to their concession holders, TrueMove only pays a token amount) prevents a free market from functioning. Why would AIS invest in a new network with three years left to recoup its investment? Solve that and the market will look after itself, but the regulator is like a kitten, all fluffy and hissing but without claws. It has not shown the will or the inclination to tackle any of the fundamental industry problems.

On another level it is about nationalism rearing its ugly head.

It is well known that some within the NBTC openly express their views that DTAC CEO Jon Eddy Abdullah is too outspoken for his own good and as a guest in the country should learn to behave appropriately. The insistence, from both governments, to push ahead with the foreign dominance notification, flawed and in breach of trade agreements as it is, is a vote-winner for the politicians who trumpet the cause, even though it is bad for competition and bad for the man in the street.

One can only wonder how much more bullying DTAC can take before it’s shareholder decides to pack up and go home. Why is it being singled out for foreign dominance and not Temasek-owned AIS? Why did CAT approve TrueMove’s 3G request a month, while it took four years and did not make a decision for DTAC’s own request? Even the red-shirt protesters decided to fire a dozen bullets into DTAC’s headquarters in their mass protest in 2009, because they were competing against the company Thaksin Shinawatra founded, and thus were clearly undemocratic.

DTAC’s ongoing internal feuds between Thai and Norwegian executives has not helped. The spat between former Executive Vice President Thana Thienachaiya and former CEO Tore Johnsen was epic and spilled over to media. When the EVP wrestled out control over media and communications, the order was given for media sympathetic to Johnsen to be blacklisted.

The silver lining is that despite the hiccups, despite the war, both of words and bullets, that has been waged against it, users are sticking to DTAC because of the network quality. AIS’ 3G network is a mess due to lack of planning and equipment from every vendor under the sun, TrueMove might have raw speed, but it does not seem to understand the need for low-latency connections and its over-aggressive use of transparent proxies make you wonder if you are connected to the internet or a ghost of the internet at times, while TOT still thinks that indoor and out of Bangkok coverage is optional now into its third year of operations.
 

Thumbail image from server side store: 
Don Sambandaraksa
The sub-$5 ARPU segment is not where RIM wants to be winning
Co-CEO departure shows BlackBerry maker's plight
Telcos, data centers, CDNs will be in the same business: Barney
Prosecutions could result from failed iPhone launch
Mobile operators finally take 'voluntary' action on bill shock
Huawei's Paul Scanlan is clear about the trends driving telcos and how his company is managing the challenges this creates

POLL

What's your outlook on the telecoms sector in 2012?

Optimistic
54% (15 votes)
Cautiously optimistic
25% (7 votes)
Who cares – the world ends next year anyway
11% (3 votes)
Pessimistic
11% (3 votes)
Total voters: 28

Older polls