National Telecommunications Commission fails to clarify its 3G specifications
Bangkok Post
Thursday, July 26, 2007
By Srisamorn Phoosuphanusorn
The mobile operator DTAC says it is open to a partnership deal for
third-generation (3G) mobile service with Thai Mobile if the state cellular
operator proposes a viable business venture.
But the country's second-largest cellular firm still intends to build its own 3G
network to take full business control, said Sigve Brekke, DTAC's chief
executive.
Mr Brekke said DTAC had developed an alternative low-risk, high-return approach
toward 3G investment since the 3G licensing framework drafted by the National
Telecommunications Commission (NTC) is still unclear.
The decision came after the NTC failed to offer a clear picture on 3G
specifications, particularly concerning the 3G licence fee, universal service
obligation (USO) fee and the number of cell sites that are allowed.
"We are awaiting proposals from TOT Plc for a possible venture with Thai Mobile.
But a partnership agreement would largely depend on how such a commercial
proposal is presented," said Mr Brekke.
Thai Mobile is a joint venture between TOT (58%) and CAT Telecom (42%). It has
around 68,000 subscribers. Thai Mobile is the only operator using the 1900
megahertz spectrum, the global 3G cellular-technology platform.
"We are now open to taking part with Thai Mobile, depending on the degree of
complexity such as the form of revenue sharing and the number of cell sites to
be constructed," Mr Brekke said.
"DTAC would only take charge of marketing while Thai Mobile would take
responsibility for billing and services."
As an alternative, he said, DTAC had also asked TOT to let all Thai Mobile
customers use its roaming network in exchange for 4-5 million new numbers. DTAC
would pay TOT two baht per number per month, similar to the arrangement with the
NTC.
The proposal came in response to the NTC's complex procedures for allocating new
numbers. TOT still needs permission from the NTC for the number allocation to be
approved.
However, Mr Brekke said the best type of 3G investment for DTAC would depend on
the NTC's licensing framework and specifications.
He disagreed with the national telecom regulator's planned auction of 3G
licences to maximise returns to the state, saying it would create overly high
costs for operators that would inevitably be passed on to consumers.
He urged the NTC to use the "beauty contest" method focusing on technical and
marketing strengths, forcing operators to commit to creative ways to
differentiate services and build strong network coverage.
He cited key lessons from the past failure of some operators in Hong Kong,
Singapore, the UK, Germany and France. The auction method used in these markets
brought in massive sums for governments but created huge costs that customers
ultimately had to pay through high service fees.
Mr Brekke said DTAC would not rush to invest in 3G in the belief that it would
start commercial operations in 2009.
But he said DTAC would be able to upgrade existing 2G base stations to 3G faster
and offer lower up-front investment costs than rivals thanks to the company's
3G-enabled cell sites.
Before expanding the 3G business, he said, the NTC should resolve current
regulatory problems, including access and interconnection charges, concession
amendments, competition rules and number portability.
DTAC shares closed yesterday on the SET at 46.25 baht, up 50 satang, in trade
worth 126.48 million baht.
Date Posted: 7/26/2007
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