3G held up again, while the

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Court drops 3G bombshell

By Usanee Mongkolporn

The Nation

 

Injunction order says licence auctioneer NTC itself in transition; Planned auction on Monday hinges on NTC's appeal today against verdict

 

The Central Administrative Court has hampered hopes for the long-overdue 3G (third generation) telecom development in Thailand in the near future with a bombshell injunction on the licence auction scheduled to kick off on Monday.

 

In a 16-page verdict, the court reasoned that if the auction was allowed to proceed as scheduled by the National Telecom Commission (NTC), it would lead to a number of obstacles because the NTC itself is currently in a transition period, awaiting the creation of a new regulatory body.

 

The NTC will today appeal against the court's decision, and hope for a quick, favourable verdict, without which Monday's bidding would need to be called off.

 

NTC commissioner Natee Sukonrat said the telecom body will appeal today. If the court accepts the appeal, the NTC will go ahead with holding the auction on Monday as planned. If the court rejects the appeal, the NTC will stop all auction activities. This could mean a considerably lengthy delay as the establishment of the National Broadcasting and Telecom Commission hinges on a bill awaiting parliamentary approval.

 

The licence auction is scheduled to take place at Evason Hua Hin and Six Senses Spa hotel from September 20-27, with two 3G licences up for grabs at a starting price of Bt12.8 billion per licence.

 

The court's verdict put Information and Communications Technology Minister Chuti Krairiksh in the hot seat and dealt a severe blow to the country's three major telecom firms - AIS, DTAC, and True - which were all set to bid for the lucrative licences. Chuti last night said it was "my fault" to have failed to prevent CAT Telecom, an agency under his watch, from seeking the court's injunction.

 

Citing the 2007 Constitution, the court said there would be a new regulatory body called National Broadcasting and Telecom Commission (NBTC) soon with the powers to oversee both the broadcasting and telecom sectors.

 

To avoid creating future trouble for the NBTC, the court said, the NTC's plan to auction the 2.1G radio frequencies for the 3G mobile services should be suspended.

 

A bill to set up the NBTC is now pending in the House of Representatives following key amendments made by the Senate.

 

The House of Representatives is expected to set up a joint committee with the Senate to consider the proposed legislation, which was earlier expected to be enacted by the end of this year. The joint deliberation could last long, and Chuti himself seemed uncertain if the auction could be called within next year or bidders will have to wait until next year.

 

Observers believe the planned NBTC is unlikely to be functioning until the middle of next year at the earliest when all commissioners are appointed.

 

Although the NTC was given provisional power to fill the void as the country awaits the setting up of the NBTC, telecom analysts blame the NTC for having waited too long. They said that with NBTC close to coming into existence, the current NTC would be perceived more and more as lacking the authority to auction the licences.

 

One analyst also warned that if the 3G auction is postponed for an extended period, telecom operators might not invest more on the existing networks as they have to transfer their network assets to the state concession owners TOT and CAT under the Build-Transfer-Operate (BTO) when their concessions end.

 

The concessions of TrueMove, AIS, and DTAC will end in 2013, 2015, and 2018 respectively.

 

Thana Thienachariya, head of corporate affairs and strategy of Total Access Communication, declined to comment on the matter, pending the company's examination of the court order. But he is concerned that the industry would be affected if the auction is delayed.

 

Wichien Mektrakarn, chief executive of Advanced Info Service, said the NTC has to hurry with its appeal. What the private telecom operators can do is wait and see if the court will accept the NTC appeal.

 

Supachai Chearavanont, True Corp chief executive, said he was disappointed by the court's verdict, but hoped the NTC could make the appeal successfully.

 

"If the auction is delayed indefinitely, the country will lag behind in terms of technology adoption."

 

Information and Communications Technology Minister Chuti Krairiksh said he is confident the 3G auction would take place within this year. He added that the government has supported the development of the 3G technology.

 

In a petition filed with the court, state-owned CAT Telecom said the NTC's planned auction was unlawful and could financially affect its concession revenues.

 

The telecom operators that can obtain the licences will migrate the customers from the state concessions to the licences to save regulatory cost.

 

CAT estimated that the state agency would lose Bt15 billion as a result of customer migration to the licences.

 

As regulator, the NTC insisted that it had followed international standards in designing the auction, and had carefully studied the various pros and cons.

 

The auction would benefit the entire telecom industry by promoting greater competition, adding that the NTC acknowledged, however, that this would adversely affect any currently dominant entities that could not improve their efficiency.

 

Justification for the injunction

 

- The court views that the auction could affect the work of the upcoming National Broadcasting and Telecommunications Commission.

 

- There is no spectrum allocation master plan

 

- The court will also ask the Constitution Court to rule if the NTC has overall regulatory authority under Section 305 of the 2007 Constitution

 

- The court views that granting an injunction now will affect only three bidders. If the auction takes place and later the Constitution Court rules that the NTC's authority is against the 2007 Constitution, this could lead to possible bigger impacts to the related parties.

 

- According to the court, the injunction will not affect the NTC work and the public telecom service as there are already two 3G telecom operators, TOT and CAT Telecom, and the network of existing private telecom operators have already covered nationwide.

 

 

-- The Nation 2010-09-17

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