Pre-auction for 1800MHz spectrum begins

Pre-auction for 1800MHz spectrum begins

The acting board of the National Broadcasting and Telecommunications Commission (NBTC) will inaugurate the 1800-megahertz spectrum pre-auction process today after unanimously approving the draft of the three-licence auction Wednesday.

According to the 1800MHz auction timeline, all interested bidders must submit their bid documents on June 15 only.

The NBTC will announce the qualified bidders by Aug 2 before holding the auction on Aug 4 at 10am sharp.

The NBTC believes that the auction will attract bidders despite a 37.45-billion-baht licence reserve price, which is based on the winning prices of the previous 1800MHz auction in 2015, according to NBTC secretary-general Takorn Tantasith.

If no interested parties submit their bidding documents on June 15, the NBTC office will propose amendments to the board in order to make the auction more attractive, Mr Takorn said.

The NBTC will prioritise amendments to change the number of slots from three 30MHz slots to nine 10MHz slots of bandwidth, Mr Takorn said.

"The idea is just an alternative," he said. "Personally I still believe the planned auction is attractive to mobile operators."

Mr Takorn said the idea of splitting the three licences into nine slots was first introduced at a grand public hearing for the draft in December of last year, at which some participants said the measure would increase competition because some bidders might need less than 30MHz of bandwidth.

Mr Takorn said the NBTC must move ahead with the original auction draft that passed the public hearing in December.

The 30MHz of bandwidth per licence is in line with the 2015 1800MHz auction design, suggesting that the structure will prevent inequality among auctions under the same spectrum range.

DTAC operates on the 1800MHz spectrum under CAT Telecom's 2G concession, which will expire on Sept 15.

Under the 1800MHz auction design that was approved Wednesday, the NBTC will auction a total of 90MHz of bandwidth (upload and download) on the 1800MHz spectrum, which it will divide into three licences, each containing 30MHz of bandwidth (upload and download).

Each 1800MHz licence's reserve price has been set at 37.45 billion baht (for 30MHz of bandwidth) and has a lifetime of 15 years. The 37.45-billion-baht reserve price is based on the winning price of the 1800MHz licences in 2015.

The pre-auction process will begin today, and the NBTC will release the auction conditions to the public and invite interested bidders to join the bid through all channels between May 15 and June 14.

All prospective bidders must deposit 1.87 billion baht (5% of the reserve price) as a bid guarantee for the auction on June 15, plus 5.61 billion baht for a fine in case the bidder defaults on its licence payment.

Mr Takorn said the NBTC will apply the N-1 auction rule to ensure good competition in the auction process. The N-1 rule allows the regulator to withhold spectra and sell fewer licences than the number of qualified bidders.

But the NBTC will postpone the auction for another 30 days if there is only one qualified bidder for the auction, in order to attract additional candidates, Mr Takorn said.

If no additional bidders apply during the 30 days, the NBTC will automatically auction one licence to the single bidder, which will take the 1800MHz licence to a one-time price increment of 75 million baht on the 37.45-billion-baht reserve price.

Total Access Communication (DTAC) spoke out against the 1800MHz auction draft again Wednesday, saying the auction's design will result in lower auction revenue, result in unsold spectrum and produce an inefficient market outcome.

DTAC chief executive Lars Norling said the original auction rules, detailing 15MHz and the N-1 rule, do not align with the needs of the telecom industry and Thailand's increasingly digital consumers.

Mr Norling said the current auction rules for the 1800MHz spectrum will undoubtedly put the telecom industry, consumer benefits and the government's vision for Thailand 4.0 at risk.

DTAC maintained its previous opinion of the planned auction on three key points.

First, the reserve prices should be "rationalised" by resetting them to the reserve prices set on AIS and True's spectrum concession re-auctions in 2015, which is more appropriate for Thai consumers.

Second, the spectrum blocks should be 2x5MHz (instead of 2x15MHz), in line with international best practices.

Third, the N-1 rule for the 1800MHz auction (by which the regulator would withhold spectrum and sell fewer spectrum licences than the number of bidders) should be removed in order to avoid creating an artificial scarcity.

"In June, DTAC will submit a readiness and consumer protection plan in compliance with the NBTC's dictum that the company must continue providing the best network services for customers until new licence holders are announced," Mr Norling said. "This is the same procedure followed when the concessions of the two other operators expired, and the auction was delayed."

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