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The selection process for the market's third operator was a spectacle to behold
What is probably the last revision of Thailand’s long-awaited 4G refarming exercise has been finalized and is on its way to the regulator’s board for approval.
In too many ways, the final draft is underwhelming considering all that was said. The promised extra 5 MHz from CAT Telecom is conspicuous in its absence and rather than spending some effort defragmenting the 1800-MHz spectrum into a nice contiguous 25 MHz, the regulator has gone for two non-contiguous 12.5 MHz licenses.
The problem is that from low to high, we have 12.5 MHz free (ex TrueMove), 25 MHz Dtac (ends 2018), 12.5 MHz free (ex AIS) and 25 MHz (ex Dtac, now being squabbled over by Dtac and CAT Telecom, ends 2018 regardless).
Dtac has offered to move down to the bottom of the 1800-MHz spectrum if it is allowed to run LTE on its spectrum, a request that was shot down by the regulator in what could only be described as an arrogant, racist rant on the poor Telenorwegians. The top 25 MHz used to be used by Dtac but was recalled by its concession holder CAT Telecom which now wants it though Dtac maintains that it can either be used by Dtac or returned to the regulator for reallocation, preferably the latter.
So instead of what could easily have been a 50 MHz contiguous block for auction had Dtac’s perfectly reasonable offer been accepted in good faith, insults and egos mean Thailand has only two oddball, misfit 12.5 MHz licences up for grabs.
With mainstream LTE carriers in 5-MHz multiples, a 12.5 MHz carrier would be a waste, or a nice 10 MHz carrier with very generous guard bands one might say. Or, in theory, a telco could deploy narrow-band 1.6 MHz LTE on it which while it is part of the LTE standard and should be supported, it is of dubious economic value.
“Perhaps it could be used for narrowband M2M,” one telco executive told me a while back when the plan was first mooted, not sounding totally convinced himself.
It’s a mess, and this fragmentation would be perpetuated with the new licenses once the networks go live. Yes, Thailand is so rich we can afford to throw away 5 MHz of valuable band 3 spectrum.
The word omnishambles comes to mind.
The NBTC has bought in the ITU as a consultant for the auction and it says the ITU has recommended a price of 603 million Baht per megahertz based on prices seen in India and Srilanka, never mind the minor detail that with 5-MHz rounded blocks all that spectrum could actually be used.
The reserve price, at 70%, will thus be $341 million (11.6 billion Baht) per license though the NBTC will set the price at $487 million (16.575 billion Baht) per licence if the number of bidders is not greater than two.
The regulator also has set a spectrum cap of 60 MHz. Again, only Dtac is likely to be affected by this spectrum cap for its concessions that end in 2018, though it was earlier mentioned that they could perhaps return spectrum early to avoid the cap or that it could be argued that the spectrum is CAT Telecom’s and not Dtac’s as it is under a CAT concession.
It is likely that we will only know for sure how the spectrum cap is interpreted when Dtac is or is not admitted into the auction, depending on who blinks first.
The other issue that many in the industry are concerned about is how the NBTC has decided to go ahead under the current NBTC act, an act which will soon be repealed as a new NBTC act putting the regulator under the control of the Digital Economy Commission will soon become law.
That could be messy, as could the foreign dominance notification that still has not been repealed.
As I have said before, in the previous auction, everyone was saying that if the regulator followed its own foreign dominance notification to the letter, there would only be one bidder. Indeed, with TrueMove now in bed with China Mobile, one could argue that the FDN would mean none of the incumbents would be admitted to the auction under that reasoning. But after the auction concluded, the NBTC said that no affected party had lodged a complaint under the FDN and thus there was no case to investigate. Many NGOs and activists tried to lodge a complaint but they were all brushed aside as they were not filed by an affected third party.
Kafka would have been proud.
Never mind that the way the FDN is written is not an a priori law; it should be regularly checked for compliance not just before an event like an auction.
Next we need to buckle down and see what changes between now and the auction (last time round they changed practically everything at the eleventh hour) and also if the 900-MHz and 2600-MHz refarming exercises make any sense.