From The Bangkok Post
No surprises as foreign firms stay away
Published: 31/08/2010 at 12:09 AM
Online news: Local News
Thailand’s 3G mobile phone services inched closer to reality Monday when the three leading mobile operators submitted bid documents for the licence auction scheduled for Sept 20.
Monday was the deadline the National Telecommunications Commission (NTC) set for all interested firms to submit their bidding documents with the required 500,000 baht 3G processing fee and 1.28 billion baht bank guarantee as a deposit.
A DTAC executive submits a 1.28-billion-baht cheque to NTC officials as required as a bank guarantee of 10% of the reserve bid price for a 3G licence. As predicted, the three existing private 2G mobile operators – Advanced Info Service (AIS), DTAC and True Move – were the only bidders without international competition. (Photo by Surapol Promsaka Na Sakolnakorn)
Win Win NGV submitted their documents as a fourth firm, but was disqualified when it failed to include the 1.28 billion baht deposit and letter of intent.
As predicted, the three existing private 2G mobile operators – Advanced Info Service (AIS), DTAC and True Move – were the only bidders without international competition. The absence of an international bidder is likely to ensure the bidding will be conservative and winning bids lower than expected. AIS subsidiary Advance Wireless Network was the first to submit, followed by DTAC Internet Service and Real Move, a subsidiary of True Move. AIS placed a bank guarantee with Bangkok Bank, while DTAC used HSBC Bank and Real Move posted Siam Commercial Bank for its bank guarantee.
Win Win NGV is a Thai-owned importer and assembler of NGV-equipped vehicles. It belongs to the children of Prasit Pothasuthon, a senator for Suphanburi province and chairman of the Senate Committee for Science, Technology, Communications and Telecommunications. Mr Prasit is a strong opponent of the NTC’s 3G auction, accusing it of offering too low a starting price. He suggested a possible price of 330 billion baht after earlier studies by a research organisation.
Mr Prasit even asked the National Anti-Corruption Commission to investigate alleged irregularities in handling the 3G auction. But Mr Prasit’s son, Yuthana Pothasuthon, an adviser for Win Win, said his company had no intention of becoming a nominee for anyone as speculated. “We truly want to enter the 3G auction as we expect the business will create a new revenue stream and make a profit.” He did not elaborate on business plans or prospective partners. “We have no intention of making any problems for the auction or the NTC,” said Mr Yuthana. He said he misunderstood that the bank guarantee and letter of intent could be submitted to the NTC two or three days after the deadline.
Meanwhile Samart I-Mobile scrapped its plan to bid, saying it wanted to focus on strengthening existing mobile virtual network operator (MVNO) service for TOT Plc. The handset flagship distributor of Samart Corp said its decision was based on a study that concluded 3G investment was not worth the high investment cost and risks required.
The three potential bidders now have to be screened to see if they meet the licence criteria. The NTC plans to announce the list of qualified bidders for the auction on Sept 15.
The NTC will auction three licences with a reserve bid price of 12.8 billion baht. Each licence features a 15-year term with a 15-MHz bandwidth. It plans to spend 50 million baht to hold the auction on Sept 20 in Hua Hin broadcast on satellite TV.
Col Natee Sukonrat, an NTC commissioner, said it will use an N-1 approach, meaning the number of licences will equal the number of bidders minus one. This approach is to ensure higher competition and potentially raise prices. A second auction is planned for remaining licences 90 days after the close of the first auction. The starting bid would be the wining price of the first auction. Col Natee said he believed foreign companies would participate in the second auction and were waiting to see a transparent first auction prior to participation.
Anuparb Thiralarp, an independent telecom expert, said the absence of foreign participation in the 3G auction came as no surprise, given the confusion over many aspects of the bidding terms and lack of clarity about pricing and foreign shareholding regulations.