The telecom regulator wants to substantially increase the financial guarantee that bidders in the renewed 4G auction for the 900-megahertz spectrum are required to place.
That rise will come on top of changes in bidding terms and conditions, which authorities are seeking to toughen to ensure no repetition of the bid winner defaulting, as in the case of Jasmine International Plc subsidiary JAS Mobile Broadband.
The National Broadcasting and Telecommunications Commission (NBTC) will set up a legislation advisory committee to work on measures for the renewed auction and penalties on JAS, which defaulted on a licence payment due this past Monday.
Resolutions on the financial guarantee and the establishment of the legislation advisory panel were approved Wednesday by its telecom committee.
"The new guarantee conditions would require prospective bidders to place 10-30% of JAS's winning price (75.65 billion baht) before the auction instead of 5% of the reserve price of 12.9 billion baht JAS placed previously," said NBTC secretary-general Takorn Tantasith.
JAS had placed a guarantee of 644 million baht before the auction.
"A new auction round for the 900MHz spectrum is scheduled to take place in June," said Mr Takorn, insisting the repeat auction must begin at JAS's winning price of 75.65 billion baht.
If the new auction fails to attract any bidders, the NBTC will have to suspend the auction for one year.
Other existing auction rules will also be adjusted to ensure there will be no repetition of the bid winner defaulting, he said.
A public hearing on the new draft of the 900MHz auction will be held from April 18-23.
At the hearing, the NBTC will float three ideas on the reserve price for the auction, Mr Takorn said.
First, the reserve price should be set at True Move H Universal Communication's winning bid of 73.72 billion baht.
Second, the re-auction should start at 70.18 billion baht, the last price for the spectrum slot offered by Total Access Communication Plc (DTAC).
Finally, the reserve price should be set at 75.9 billion baht, the last price offered by Advanced Info Service Plc (AIS) for the second slot of spectrum that True won.
"Even though the NBTC insisted on using JAS's winning price for the re-auction, the final reserve price together with the guarantee amount will depend on the result of the public hearing," Mr Takorn said.
He said the legal panel will also come up with stiff penalties on JAS Mobile Broadband. The panel expects to conclude its work on fines and penalties in 30 days.
Representatives from the Office of the Attorney-General, Council of State, Finance Ministry, Stock Exchange of Thailand, Securities and Exchange Commission and the NBTC's legal department will be invited to join the committee.
"Possible penalties for JAS's default could include revocation of all Jasmine Group's 13 operating licences," said Mr Takorn.
Somchai Lertsutiwong, chief executive of AIS, said the company was interested in participating in the new auction because the spectrum is an essential and finite resource that supports operators to provide effective wireless broadband services.
But he said it was too early to say what the appropriate reserve price would be to attract AIS to join the bid. "We are waiting for official auction designs from the NBTC before making any move," said Mr Somchai.
Suphachai Chearavanont, president and chief executive of True Corporation, the parent firm of True Move, said the company had counted on NBTC's confirmation to the company that bids for the re-auction would start at JAS's winning price before it made its payment.
True will rely on the reserve price of JAS's winning bid. "This is for fairness and upholding the credibility of the country's auction process for future auctions and other national projects involving private sector investments both locally and abroad," Mr Suphachai said.
DTAC chief executive Lars Norling said JAS's winning bid was an "unexpected excessive price" or "artificial demand" caused by a bidder.
"At this price it is very unlikely that DTAC would participate," he said, adding that a re-auction should be held with the same rules and criteria.
Mr Norling said a proper public hearing must be held to ensure that all stakeholders can express their views. DTAC will provide further comments at the hearing.
