The auction of six mobile spectrum bands on May 6 is expected to attract private mobile operators looking to increase their network capacity, but some have complained that spectrum prices are too expensive.
Advanced Info Service (AIS) is likely to focus on the 2100-megahertz band, according to analysts, while True Corporation is expected to aim for 2300MHz as each of them use those bands under partnerships with state enterprise National Telecom (NT).
The six spectrum bands the National Broadcasting and Telecommunications Commission (NBTC) is auctioning comprise the low band of 850MHz, the middle bands of 1500MHz, 1800MHz, 2100MHz and 2300MHz, and the high band of 26GHz.
NT holds the rights to the 850MHz, 2100MHz and 2300MHz bands, but they expire in August this year.
The NBTC held a public hearing on the auction plan on Feb 6, following its board approval of the draft auction plan last month.
The spectrum bands are offered in several sets. For example, the 1500MHz band is available in 11 sets, each containing 5MHz bandwidth at a starting price of 904 million baht each.
The regulator set the reserve price of the six spectrum bands at a combined 121 billion baht.
According to the draft, all the band licences will have a valid period of 15 years, except 2100MHz, which has a licence period of 13 years.
The winning bidders must allocate bandwidth capacity for mobile virtual network operators to offer service, as well as devise cybersecurity and personal data protection plans. The plans must be submitted to the regulator at least three months before service commences.
STILL EXPENSIVE
Somchai Lertsutiwong, chief executive of AIS, said the company is interested in the bidding as it explores business opportunities to enhance customers' experience in a competitive market.
He said AIS is considering three factors regarding whether to join the auction: conditions and cost for acquiring spectrum, the company's plan for improving operations, and the competitive conditions to ensure its market leadership.
However, Mr Somchai said he urged the NBTC to revise the spectrum reserve prices, saying they are "too expensive".
The prices are not in line with the global market, as telecom operators must focus more on network investment to drive innovation, he said.
Many countries try to ease operators' costs to enable them to invest more in digital infrastructure, which drives economic growth, said Mr Somchai.
Telecom operators in Thailand have spent as much as 500 billion baht in past auctions to obtain 3G, 4G and 5G spectrum licences.
"We're interested in the bidding and considering several bands, especially the middle bands," he said.
Longer instalment payments
Chakkrit Urairat, chief corporate affairs officer at True Corp, said several aspects of the draft auction plan need improvement to ensure efficient spectrum allocation.
He said although the reserve prices are lower than in previous auctions, they remain significantly higher than the average prices for similar bands internationally.
This increases the risk the NBTC may not allocate as much spectrum as needed, causing Thailand to miss opportunities to utilise this national telecom resource, said Mr Chakkrit.
Moreover, he said the payment terms do not align with the country's economic conditions and may hinder telecom network investment capabilities, given the requirement of a 50% payment in the first instalment before licence issuance.
"We propose a 10-instalment payment plan, similar to previous auctions," said Mr Chakkrit.
According to the draft, the winning bidders for the 850MHz, 1500MHz, 1800MHz, 2100MHz and 2300MHz bands are required to pay 50% of the bid in the first year to obtain the licences, another 25% in the second year, and the rest in the fourth year.
CHEAPER THAN BEFORE
NBTC chairman Dr Sarana Boonbaichaiyapruck said the auction is expected to attract major operators, though the market only has two major operators: AIS and True.
Total Access Communication merged with True in 2023.
"Each company has different strategies to acquire spectrum bands to enhance their capabilities," he said.
Dr Sarana said he believes the operators will invest more to build up their spectrum portfolio and strengthen their competitiveness.
He said the auction conditions are well designed and the prices are cheaper than those in past auctions.
MOST ATTRACTIVE
Pisut Ngamvijitvong, senior equity research analyst at Kasikorn Securities, said AIS is likely to bid for the 2100MHz band while True will target 2300MHz as both firms use those bands under partnerships with NT.
Mr Pisut said 1800MHz is another attractive band, especially for AIS because it has fewer mid-band spectrums than True.
However, the 850MHz, 1500MHz and 26GHz bands are expected to be less interesting to the telecom firms than the other three, he said.
The 850MHz band needs to be refarmed into 900MHz bandwidth to support utilisation by mobile operators, while the 1500MHz band is underutilised internationally and has few compatible devices, said Mr Pisut.
Spectrum refarming refers to the repurposing of spectrum bands to more efficient technologies or to offer new services.
He acknowledged the planned auction is well designed in terms of reserve prices.
According to the auction's conditions, the 2300MHz reserve price is lower than the 2600MHz reserve price auctioned in 2020, while the reserve for the 2100MHz band is lower than the same band auctioned in 2012.
The 1800MHz reserve price is based on the 2018 auction of the same band, set in the middle between the reserve price and the winning price during that 2018 auction.
"Bidders will have to make strategic moves to determine the prices," said Mr Pisut.
"AIS may have to consider its existing middle bands as the company has 25MHz fewer mid-band spectrums in its portfolio than True."
In an artificial intelligence-driven economy, having more spectrum in a portfolio could increase the capability of operators' businesses in the long term, he said.
More importantly, it is unclear when the next auction will take place after this upcoming one, said Mr Pisut, making it likely the two major operators will race to bid, especially for the middle spectrum ranges.