NBTC cut spectrum cap to prevent duopoly

Don Sambandaraksa
23 Aug 2012

The full 11-member NBTC board has approved the revised Thai 2.1 GHz 3G auction plans with two voting against and one abstention.

The key change from recent drafts was the reduction of the spectrum cap from 20 MHz to 15 MHz per operator.

With three incumbents and 45 MHz up for auction, this should mean that there is effectively no auction and that the spectrum will go for the reserve price of $143 million (4.5 billion baht) per 5-MHz slot come mid October.

Colonel Setthapong Malisuwan, deputy chair for telecommunications, defended the change saying that without the lower spectrum cap, the two large operators would each end up with 20 MHz, leaving the other with an uneconomical 5 MHz. This would mean even less competition in the market which would not be good for consumers in the long run.

While he did not name names, it is clear that the two large operators he referred to was AIS and Dtac and the small operator TrueMove.

He said that the risk of a duopoly for the next 15-years was too high and he was willing to forgo the maximum licence auction fee to avoid that risk.

Setthapong told reporters that even with three bidders (and three 15-MHz licences) he was confident of active competition as the highest bidder would get to pick spectrum first, though this argument is sounding more hollow as time goes by.

Supinya Klangnarong, who voted against, said that the plan may have paved the way for 2.1 GHz 3G next year - but was a bad day for competition, as it would be the same three operators taking all the available spectrum at the reserve price.

Doctor Pravit Leesathapornwongsa, also voted against, and said that reducing the spectrum cap without increasing the reserve price would mean the government losing around $62 million (1.94 billion baht) a slot or 555 million (17.4 billion baht) for all 45-MHz, according to the economic models that the NBTC has commissioned.

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