The National Economic and Social Development Council (NESDC) has rebuffed National Telecom's (NT) 5G business plan to capitalise on the 700-megahertz spectrum range, according to a source at the Digital Economy and Society (DES) Ministry.
The source, who requested anonymity, said the NESDC indicated the plan was financially unfeasible.
The NESDC decision disrupts NT's long-delayed plan to make use of the spectrum, which was secured from an auction in February 2020, the source said, adding it was uncertain when the firm's 5G business could move ahead.
There is no clear timeline for when the plan will be adjusted, the source said.
NT was created through the merger of state enterprises CAT Telecom and TOT in January 2021.
CAT Telecom won 20MHz of bandwidth on the 700MHz range for 34.3 billion baht via a 2020 auction, but the frequency has yet to be used.
DES Minister Chaiwut Thanakamanusorn told the Bangkok Post he was aware of the NESDC's decision and was unsure how NT's 5G business would fare in the future.
"Various alternatives have been floated since last year. Among them is the return of the spectrum to the regulator for reallocation, but this idea can cause a critical burden," he said.
Mr Chaiwut said the return of the spectrum also risked a legal backlash.
Some observers indicated returning the frequency could entail a hefty fine, and NT officers may find it difficult to pursue this course as they risk criminal lawsuits associated with dereliction of duty.
A telecom veteran who requested anonymity said the spectrum price tag of 34.3 billion baht is roughly double that of similar ranges held by bigger rivals in the market.
"The 34-billion-baht licence, plus a long-term investment of 100 billion in capital expenditure and operational expense, requires prudent consideration to ensure the outlay will not cause huge damage to the company's financial status in the future," the veteran said.
NT previously picked leading mobile operator Advanced Info Service (AIS) as its business partner for the 700MHz business.
No agreement has been signed yet, as the deal still needs to pass through NESDC vetting and be acknowledged by the cabinet.
Under the deal, AIS will pay NT's remaining costs to the regulator for 10MHz of bandwidth on the frequency.
NT would rent AIS's cellular network and related equipment in order to provide its 5G services on the remaining 10MHz of bandwidth, with a rental fee paid to AIS until the spectrum licence expires.
As part of the deal, AIS would also facilitate NT services through future network collaboration.
The deal helps NT save on spectrum fee payments, though it still has to pay a rental fee for AIS's cellular network.
AIS, which already has 30MHz of bandwidth on the 700MHz spectrum, could increase its bandwidth to 40MHz via the deal.
In December 2021, NT announced a business partnership with Taiwanese firm Chunghwa Telecom (CHT), mobile virtual network operator The WhiteSpace, and electronics manufacturer Delta Electronics (Thailand) for 5G private network cooperation.
In September this year, NT announced a partnership with CHT to develop smart solutions for enterprises through the 5G private network.
The solutions are expected to be provided starting in July next year.