Dtac seeks level playing field

Don Sambandaraksa
Telecom Asia

Dtac CEO Jon Eddy AbdullahDtac is satisfied with the moves the National Broadcasting and Telecommunications Commission has made toward 3G licensing considering it was established only a year ago. But Dtac CEO Jon Eddy Abdullah says one problem with the 5-MHz slot based auction with 45 MHz up for grabs is the danger for three licensees to end up with 20, 20 and 5 MHz each, which is not a healthy situation.

"We felt that 15-15-15 created balance so that nobody has more resources than another. That's why I wanted it that way."

(Just before this issue went to print, the regulator announced that it was lowering the spectrum cap for the October 17 auction from 20 MHz to 15 MHz.)

The principle behind it sounds fair - so that a smaller player might enter the market with a 5-MHz block and potentially build up a network in key areas by roaming nationwide. As a principle it is a good idea, but in practice, with scale being the key to survival, an operator with 5 MHz is simply not viable.

Looking at the NBTC's initiatives to date, he noted that it has imposed a 0.99 baht a minute price cap. Abdullah says that took care of a problem that did not exist as Dtac's average retail price was between 0.70 and 0.72 baht per minute. But with a 1 baht per minute interconnect rate, that means he is forced to subsidize off-net calls.

"I've never been exposed to such a regime," he noted, hoping that such a price cap would lead to an eventual reduction in interconnection fees.

Of course the other burning issue is the NBTC's Foreign Dominance Notification, which the previous government tried to use to kick Dtac out of the country. Former Deputy Commerce Minister (Democrat) Alongkorn Polaboot lead a crusade against Dtac for being foreign while conveniently forgetting that AIS was under a similar shareholding structure and owned by Singapore's Temasek Holdings.

"Why is it still there? It used to be about national security, but now that's been removed [because the NBTC as independent regulator could not defer judgment to the national security council] so what is the purpose? I feel it has negative benefits from a national standpoint, a consumer standpoint and it conflicts some of the higher laws at the end of the day," he said.

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