Amid mounting calls from digital TV operators and 4G licence auction winners for Prime Minister Prayut Chan-o-cha to invoke the all-powerful Section 44 to ease their "financial burdens", both the state telecom regulator and the government need to tread carefully on this issue.
Over the past few days, reports have trickled through that the National Broadcasting and Telecommunications Commission (NBTC) is looking at ways for the government to possibly extend the payment periods of the two 4G licence auction winners and eliminate the digital TV operators' rental fees for their broadcasting networks.
After bidding at exorbitant prices in 2013 (for digital television) and in 2015 (for the 4G licences), these operators are seeking help so that they can remain as ongoing businesses. If the government steps in to help, it will no doubt come at some cost to the taxpayer. Yet there are other options available in which the NBTC can exercise its duty of care towards the spectrum resource.
The irrational bidding for digital television licences resulted in bids being submitted that were nearly double the reserve prices, raising as much as 39.65 billion baht for the 24 channels auctioned. In a similar way, the 4G auctions fetched a combined 151.95 billion baht for the 900 MHz frequency.
JAS Mobile Broadband (JAS) won the first 4G licence for 75.65 billion baht, or 486% higher than the 12.9-billion-baht reserve price. True Move H Universal Communication (TUC), a subsidiary of True Move, won the second licence for 76.29 billion baht, or 491% higher than the reserve price. However, Advanced Wireless Network (AWN), a subsidiary of AIS, took over JAS's licence after the latter defaulted on its first payment last year.
Now as the NBTC prepares to auction 5G licences next year, it seems is it trying to clean up the balance sheets of the previous 4G bidders so they can participate in the process.
NBTC secretary-general, Takorn Tantasith, has admitted he agrees with the request by TUC and AWN to extend their final payments due in 2019 to 2023.
Each of them has to pay 60 billion baht for their licences in 2019. But they have requested an extension, with instalments over five years plus interest.
The NBTC board will meet on Dec 27 to recommend the use of Section 44 to the government. If the NBTC and the government agree with the payment extension request, it will help lower the burden on the operators and allow the firms to possibly participate in the 5G auction next year.
The question is how many countries are using 5G technology? And an even bigger question is whether Thailand has fully utilised the 4G spectrum. Any industry expert would say the bandwidth remains under-utilised and that it would take a couple of years before its full capacity is exhausted. So why is there such a rush to undertake 5G licence bidding?
Notwithstanding the fact the private sector should be responsible for its actions, many may forget that AIS paid out more than 10 baht a share as a dividend in 2016 alone and the firm has nearly 3 billion shares outstanding.
Therefore, if its 2017 dividend payments were put on hold to 2019, the company would have an accumulated amount of more than 60 billion baht for its subsidiary to pay for the 4G licence by the end of 2019 while still having sufficient remaining capital to bid for a 5G licence next year.
Arguments that there need to be more than one bidder for the spectrum do not hold, because what the NBTC could do is to lower the reserve price to 12.9 billion baht rather than the 37.4 billion baht it has set for the new 5G licence. This would encourage more participation and possibly a new entrant to the market.
The NBTC could also extend the licence for Total Access Communication Plc (DTAC), whose licence expires in September 2018, for a couple of years, if it needs more bidders.
The NBTC does not need a repeat of the JAS saga, after it put in a bid but then failed to live up to its expectations. When the board meets next Wednesday, it should make the best interests of the country its paramount objective rather than the benefits to private telecom operators.