A new twist in Thailand's tangled 4G auction

Metaratings
20 Jul 2015
00:00
Article

Can Thai bureaucrats change the laws of physics? Either they can or I am missing something obvious here in the upcoming 1800-MHz 4G auction in just under four months time.

Mainstream media are reporting how the regulator has approved CAT’s selfless, kind and totally unconditional return of 5 MHz of 1800-MHz spectrum which will be added to the upcoming 4G auction. Everyone is saying that instead of two 12.5 MHz licences, we will now have two 15 MHz licences. Of course, 25+5=30 and 30/2=15, right?

Wrong.

I have checked with Dtac and the 5 MHz they have returned is in the unused upper CAT block, not the used lower block. This would mean a 12.5 MHz licence and a 17.5 MHz licence unless Dtac is moved. 12.5 is pretty much a 10-MHz block with a waste of 2.5 MHz and 17.5 is really only 15 MHz in practical terms.

Going ahead with the auction on such terms would cement this fragmentation making it harder to unwind in the future.

Dtac has asked to move down to make the spectrum contiguous in exchange for allowing it to run 4G on the spectrum until its concession ends in 2018, however, this offer was slammed by NBTC secretary-general Takorn Tantasit as “unacceptable and also shows the insincerity of Dtac”.

Incidentally this is the same Takorn who, despite announcing his resignation due to health problems, seems to have recovered nicely and is still in charge. One could suppose that his health problems evaporated after meeting with the right people.

On band 3 (1800). From low to high we have 12.5 MHz True (up for auction), 25 MHz Dtac (ends 2018), 12.5 MHz DPC/AIS (up for auction) and 25 MHz Dtac/CAT (under dispute).

I wrote to Dtac asking for clarification on the 5 MHz (actually it’s 4.8 MHz) and got a clear reply from a Dtac spokesperson (requesting anonymity) that the 4.8 MHz was from the upper CAT block, next to DPC. It is not from the lower 25 MHz block that is in use for 2G.

So either Dtac’s communications person does not know what spectrum his company is returning or the regulator is lying to the people. No prizes for guessing here.

Or perhaps somewhere the memo was lost in translation and Dtac’s offer to return 5 MHz from the upper band became an offer to return 5 MHz in the lower band which will be commandeered from the Telenorwegians at a later date.

Only in Thailand could we get this close to a 4G auction without any clarity on what is being auctioned off.

The auction, messy as it is, is scheduled for November 11, less than four months from now with 30 MHz of 1800-MHz (2x15 MHz somehow) and 20 MHz (2x10) of 900-MHz up on the auction block. The 1800-MHz licences will run for 19 years, while the 900-MHz licences will be for 15 years. Takorn says the ITU has calculated the price at $29 million (994.5 million Baht) per MHz for 1800 and $23.5 million (804 million Baht) per MHz for 900. Reserve will be at 70% if there are more bidders than licences, else it will be set at 100% of the calculated price.

One also wonders if this ITU price calculation takes into account idle spectrum in the 2.5 MHz end bits on each licence.

The NBTC has also announced that the 25 MHz of Dtac 1800-MHz concession expiring in 2018 will be auctioned for a 16-year term to bring the expiry date into line with the upcoming auction. 19 years until we can defragment spectrum? Talk about kicking the can down the road.

One thing that is conspicuous in its absence is mention of the 25-MHz upper 1800-MHz block that is disputed between Dtac and its concession holder CAT Telecom. Was it an oversight that the NBTC said 25 MHz and not 45 (or 50)? Or will that 20 MHz the reward for CAT’s so-called unconditional surrender of the 5 (4.8) MHz of 1800 for this auction that I predicted would happen.

We will know soon.

EDITED TO ADD [July 24]: A previous versionof this post included the name of the Dtac spokesperson clarifying the location of the band. We have deleted it by that person's request.

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