OPEN Thought
DON SAMBANDARAKSA
One of the tenets of the 1997 Constitution was deregulation of the telecommunications market. Decisions on tele- communications were to be taken away from the politicians; from the former Ministry of Transport and Com-
munications, and given to a new independent regulatory body, the National Telecommunications Committee (NTC) and the state enterprise telecommunication companies, the Telephone Organisation of Thailand and the Communications Authority of Thailand were to be privatised.
Some of that has been done. The NTC was set up and TOT and CAT were corporatised, if not privatised. This means that they are companies bound by commercial law, but with the Ministry of Finance holding 100 per cent of the shares.
So far so good. Telecommunications market deregulation and liberalisation will allow free market forces to operate, resulting in better services and lower prices. The idea of the centrally planned economy went out along with the Soviet Union and even China today is a capitalist, communist country, whatever that means.
So why is the ICT Ministry now pushing for the establishment of what is essentially a government-owned and operated 3G network with current operators relegated only to buy wholesale airtime and do marketing? That thought is wrong on so many levels.
The frequency is wrong. TOT's plan is to build a network using 27 billion baht of taxpayers' money (or more, the amount seems to grow with each press conference) to build a 3G network using the current, virtually unused, GSM 1900 frequency. This is technically possible, but runs the risk of becoming a white elephant. In the world of 3G or WCDMA, by far the most prevalent frequency is the 2,100MHz band, followed, by the 850 Band, which is a re-farming of the AMPS 800 1G spectrum. A few countries are talking about 900, but those are few and far between. 1900 is emerging as a US standard and we know how backward the US is when it comes to mobile phones.
The lack of widespread adoption of 1900 means higher prices for base stations and handsets alike. None of the 3G handsets I have seen in Thailand work on 1900. All do 2100. Some do 850/2100. Some do 900/2100, but that is about it.
The bottom line with the frequency is that it is more expensive to roll out for the operators (or in this case, for the government) and leaves the user with fewer phones to choose from. Less competition means higher prices.
The entire structure is wrong. Is TOT a state enterprise or a private company? Well, it's stuck in limbo, a company which is state-owned. One litmus test, however is whether they can still wear a white "raj-pattern" suit at formal events. My friend at CAT Telecom, which is under the same fate, pointed out a ruling by the Ministry of Finance a long time ago that as long as a company is more than half owned by the government, its employees are eligible to wear the white suit.
So TOT is an arm of the government rolling out a 3G network to compete with the likes of Dtac and True who are now committed to 850. It is a case of government using taxpayers' money to compete with the private sector in what is at best a ham-fisted approach. No, it is not even that, as ICT Minister Mun Pattanothai has been quoted on many occasions saying that ACT (Thai Mobile) cannot raise the 27 (or 29) billion for the network and hence it will be the government seeking an inter-governmental loan to finance the deal. So we are borrowing money from our children to build a white elephant.
Perhaps someone should ask the Administrative Court for an injunction to stop this project on these grounds alone.
The powers that be would of course argue that they must make do with what they have and 1900 is better than nothing. The 1997 Constitution does not allow the government direct control over the telecommunications industry and responsibility was taken from the MoTC's Post and Telegraph Department (which was briefly under the MICT's control) before it was spun off into the NTC Secretariat. Furthermore, the constitution says that any frequency allocation cannot be done without the consent of the NTC and its sister National Broadcasting Commission.
But perhaps the government should be abiding by the spirit of the law (deregulation and encourage a free market) and withdrawing from being a player in the field rather than just adhering to the letter of the law and continuing to influence and mess up the industry through TOT/ACT/Thai Mobile/call it what you will.
But therein lies a further complication. The 1997 Constitution no longer exists. Thus the NTC is arguably only a caretaker NTC as the 2007 Constitution calls for a banged-together NBTC (National Broadcasting and Telecommunications Commission). Banged-together as the NBTC as described in the 2007 constitution has separate vertical broadcasting and telecommunications arms. A truly converged regulator would be divided horizontally by infrastructure layers and content layers. I have asked quite a few executives as to the legal status of any decision the NTC makes in this transition period and all I get are knowing smiles with lips tightly shut.
Cambodia has 3G by QB and a follow-up shows that it is hugely popular in the Khmer IT community. True, they complain of slow speeds and lack of BitTorrent, but at least they have 3G while we do not.
Laos will have 3G as of next month with speeds of up to 2Mbps being promised by Lao Telecom. Initially it will be only in Vientiane but will be expanded to other major cities next year.
Thailand? Thailand has one 3G 900MHz cell in Chiang Mai courtesy of AIS. Dtac and True have been given the go-ahead to roll out slightly less odd-ball 850MHz 3G. The government says that none of the operators wants to own a network and is rolling out obscure 1,900MHz 3G while the NTC seems to still be intent on getting huge amounts of licensing fees for its promised, universal and cheap 2100 3G.
I blame it on the decision made years ago when deregulation started. It was agreed in principle that the NTC would take care of the future while the MICT would sort out the mess of the past. But such a clear-cut move is impossible. AIS's original contract was for build-transfer-operate, so therefore AIS has no cells as they are all owned by TOT. The same is true for Dtac and CAT.
One cannot pretend that the joint-venture mess of a contract did not happen. TOT and CAT were themselves concessionaires from the PTD. Thus they cannot sub-let concessions, hence the convoluted joint-venture contract that was a way of adhering to the law while effectively sub-letting the concessions.
So while the NTC, or rather the caretaker NTC, sits in its ivory tower refusing to wade into muddy waters and waiting for legal clarity where there will be none, the bottom line is that Thailand does not have 3G while Laos and Cambodia do. But that fact does not mean that we should rush forward blindly in implementing an oddball 3G standard (1900) that will stifle competition and cost more in the long run.
The government's role since 1997 is to ensure a fair and level playing field and encourage the free market to meet the demands of the people. If our leaders had started with that in mind and act with pure hearts, none of this mess would have happened.
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