2100MHz auction in Thailand raises USD1.35bn

Thailand’s National Broadcasting and Telecommunications Commission (NBTC) has completed a long-awaited auction of 2100MHz 3G mobile network operating licenses, with all three domestic private sector cellcos winning concessions on 16 October with combined bids of THB41.63 billion (USD1.35 billion).

Advanced Info Service (AIS), via subsidiary Advanced Wireless Network, Digital Total Access Communication (DTAC), through its DTAC Network unit, and True Corp subsidiary Real Future were the only companies which entered valid applications, each winning a maximum 2×15MHz frequency allocation. The recipients of the 15-year full ‘Type 3’ (infrastructure-based) licenses will be officially announced by the NBTC within three days, and the permits will be formally awarded in January 2013 – after a 90-day period for bidders to meet obligations.

NBTC allocated a total of 90MHz (nine lots of 2×5MHz) of UMTS spectrum, consisting of the bands 1920MHz-1965MHz paired with 2110MHz-2155MHz. The regulator divided the bandwidth into nine paired 5MHz slots, each carrying a minimum bid price of THB4.5 billion, making the minimum price tag for each 2×15MHz license THB13.5 billion. The bidder offering the highest price for their slots gained first choice over the actual spectrum range awarded. In the event, two slots were auctioned off atTHB4.95 billion, one at THB4.725 billion and six at THB4.5 billion each. Only AIS spent above the floor price, paying THB14.63 billion, while DTAC and True each paid the bare minimumTHB13.5 billion. The combined final price was THB1.13 billion higher – or less than 3% higher – than the floor threshold.

All three operators intend to launch commercial 2100MHz networks in the first half of 2013 to break state-owned TOT’s monopoly in the frequency band. TOT also holds a 2×15MHz UMTS block (1965MHz-1980MHz, 2155MHz-2170MHz), although it has made slow progress in the market with its largely MVNO-based 3G business. The new Type 3 licenses allow the privately-owned cellcos to operate outside of their existing revenue-sharing build-transfer-operate (BTO) concession framework, thereby incurring lower fees and other costs as well as taking full ownership of their own wireless spectrum and infrastructure.

The three cellcos previously indicated they had budgeted a combined total of approximately THB130 billion for 2100MHz network rollout over three years, while AIS and DTAC have discussed proposals for a jointly-owned 3G tower infrastructure company. The new projects will replace investment in the companies’ existing 800MHz-900MHz W-CDMA/HSPA services; AIS has offered 900MHz HSPA-based services since July 2011, and DTAC has provided similar services using 850MHz spectrum since August that year, both under BTO revenue-sharing conditions, while also since that month, True has partnered CAT to operate the ‘True Move H’ 850MHz HSPA network – although the public-private partnership has run into troubles surrounding the legality of its contracts.

The NBTC also decided that 2100MHz licenses will permit 4G LTE services (referred to locally as ‘3.9G’), while other auctions for spectrum in 4G-suitable bands including 1800MHz are in the pipeline.