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Critics Fear Collusion in 3G Bidding
Source: http://www.bangkokpost.com/news/local/317160/critics-fear-collusion-in-3g-bidding
Source Date: Tuesday, October 16, 2012
Country: Thailand
Created: Oct 16, 2012

The auction of 3G licences kicked off Tuesday amid concern over possible collusion among the three bidders - AIS, DTAC and True Move.

The National Broadcasting and Telecommunications Commission (NBTC) breathed a sigh of relief after the Central Administrative Court Monday dismissed the petition filed by independent telecom analyst Anuparp Thiralarp seeking to halt the process.

The public is curious to see how much the participants will pay at the auction. The NBTC set a minimum bid of 4.5 billion baht per five MHz.

"If the final auction prices are not 10% greater than the floor price, there could be public concern over possible collusion," said Paiboon Amornpinyokeat, an ICT (information and communication technology) lawyer and the founder of the P&P law firm.

The NBTC has the authority under the Trade Competition Act to scrap the auction result if it finds evidence of collusion, he said.

Mr Paiboon added that only Switzerland and Australia have had a number of 3G licences equal to the number of bidders. In these auctions, respective governments tallied prices only 2% above the reserve price.

The NBTC is likely to face a storm of lawsuits in the next few months after the auction and before the NBTC issues 3G licences, said Verepat Pariyawong, an independent legal analyst.

The NBTC will auction off 45 MHz of bandwidth on the 2.1-gigahertz band Tuesday. The auction will be an ascending-bid, with each bidder being allowed to purchase up to 15 MHz or three blocks.

Bids increase in 225 million baht increments, or 5% of the floor bid.

There are three qualified bidders: Advanced Wireless Network, a subsidiary of Advanced Info Service (AIS); DTAC Network, a subsidiary of Total Access Communication (DTAC); and Real Future, a part of True Corporation.

The three bidders earlier announced they would spend a combined 130 billion baht on 3G network rollout over the next three years. They plan to launch 3G commercial services by mid-2013.

NBTC chairman Tharej Punsri said the regulator is fully prepared to deal with any lawsuits following the auction.

A number of ombudsmen and governors from the Office of the Auditor-General have been invited to witness the Tuesday` auction, he added.

Jesada Sivaraks, secretary of NBTC's vice-chairman, said the NBTC should grant 3G licences to the winning bidders by January, or 90 days after the auction.

This auction will set the benchmark for the upcoming 1800-MHz frequency auction, slated for March 2013.

True Move has 12.5 MHz of bandwidth on the 1800-MHz frequency under the existing 2G contract, which is due to expire in Sept 2013. Digital Phone, a subsidiary of mobile leader AIS, has another 12.5 MHz.

Mr Jesada said competition in the 1800-MHz frequency auction will intensify and auction prices will exceed the levels of Tuesday's auction because the 1800 MHz frequency can be developed to advance 4G wireless broadband service.

The Administrative Court Monday rejected Mr Anuparp's petition as he was not a damaged party in the case.

Mr Anuparp asked the court to suspend the auction until the NBTC amends its regulations to better benefit the public in compliance with Section 47 of the constitution, saying radio frequencies for telecom and broadcasting services are national resources.

His filing argued that the NBTC lacks rules that would regulate 3G network rollout in remote areas.

The regulator stipulated that licence holders must expand their network coverage to 50% of the total population in the first two years after receiving a licence, and expand it to 80% of the population within four years.

He asked about the other 20%.

In its statement, the court said the regulations for the 3G auction are only a broad framework for regulating the standard services provided by bidding telecom companies.

It is the duty of the Office of the Ombudsman to consider whether the auction causes damage to the public and file a petition with the court to suspend the auction. But the petitioner is only a service user and it is still not clear if damage would occur as claimed by the petitioner, the court said.

The court said Mr Anuparp cannot be regarded as a damaged party.

The rights of the petitioner would be violated only after the auction takes place and the winner of the auction fails to operate properly in terms of providing a quality service or charging high service fees, and if the NBTC fails to take action against the licensee to solve the problem, the court explained.

Suriyasai Katasila, chief coordinator of the Green Politics group, Monday also filed a petition with the Administrative Court, seeking a similar injunction to block the auction of the 3G broadband spectrum. The court has yet to rule on his petition.

Mr Paiboon said the dismissal granted by the court came as no surprise as Mr Anuparb did not stand to be directly affected by the 3G auction and the visible evidence of damage is not apparent at this time.

He also said the filing by Mr Anuparp was different from a previous case from 2010 in which the Administrative Court backed arguments by CAT Telecom executives, led by president Jirayuth Roongsrithong, that the now-defunct National Telecommunications Commission (NTC) had no authority to prevent the auction from happening.

At the time, the court ruled the licensing of the 3G spectrum would have to wait until the NBTC had been formed.
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