The National Broadcasting and Telecommunications Commission's (NBTC) rush to push for the availability of ultra-high-speed 5G wireless technology has surprised telecom operators who said the move came sooner than anticipated.
Last Wednesday, the NBTC announced debut auctions of the 5G spectrum on Feb 16 for four bands -- 700MHz, 1800MHz, 2600MHz and 26GHz -- which will be divided into 56 licences. The prices will range from 8.1 billion baht to 35.3 billion baht.
However, without setting proper auction criteria, the sales may result in interested bidders offering exorbitant prices. The NBTC should learn from its past mistakes of handling of the auctions for digital TV and 4G licences which brought about excessively high bidding prices by operators who subsequently could not afford to pay, leading to state bailouts.
In April, the now-defunct National Council for Peace and Order (NCPO), used its special powers under the interim charter's Section 44 to bail out digital TV operators from their financial obligations and delay payments for three 4G licence operators for another five years.
In 2013, auctions for digital led to excessively high bidding -- as much as 39.65 billion baht for 24 digital channels.
Observers viewed those prices as too unrealistic for the market. Moreover, the NBTC also dictated -- rather than let the operators decide -- what particular station formats should be for certain licences such as news, documentaries, or entertainment. As a result, many operators failed to make their business viable.
In the 4G auctions back in 2015, the NBTC had aimed for maximum returns by allowing bidders to offer sky-high prices. For 76.3 million baht, True Move won licences for 10MHz of 900MHz ranges while Jasmine International Plc, a new player, won another 10MHz range licence for 75.7 billion baht.
Both winning 4G prices were almost six times higher than the NBTC's 12.8-billion-baht reserve price set for the auctions. In fact, the combined price was the second-highest in the world.
Of course, it would be a huge success for the NBTC if the inflated winning prices resulted in actual business viability of the operators.
Unfortunately, Jasmine forfeited its licence after missing the deadline for an initial 2.1-billion-baht fee payment which led to Advanced Info Service Plc (AIS) taking the licence from Jasmine at the same price.
The NBTC said the five-year delay for the final payments, worth 150 billion baht in total, from the three telecom operators were meant to help them be able to bid for 5G licences.
The NBTC should learn from its previous experience and push for a 5G auction that does not aim only for the highest returns.
Instead, the regulator should focus on what bidding models can provide optimum benefits for all key stakeholders -- the state, business operators and end consumers.
When it comes to adopting 5G technology in Thailand, there are still many commercial risks. Adding unrealistic and inflated bidding prices on top will only hinder the establishment of the technology and cause a financial burden to operators who will eventually pass on costs to consumers.
While a high number of 5G licences may prevent operators from bidding inflated prices, the most important factor is for the NBTC to consider a proper auction criteria to prevent excessively high bidding prices in order to promote a positive environment for the adoption of the 5G technology.