Thailand - 3G within a year

Minister prioritises 3G wireless: Public and private firms to link up

Thailand will aim to establish a nationwide, third-generation wireless broadband network within one year, according to Mun Patanotai,minister of Information and Communications Technology.

He said the state-owned TOT Corp and CAT Telecom would invite the three main cellular operators to participate in a joint project to establish a High-Speed Downlink Packet Access (HSDPA) system with the aim of becoming operational within one year.

The venture could be structured with private firms acting as strategic partners with the two state enterprises. This would avoid a lengthy review under the 1992 public-private joint-venture law.

"I want both the TOT and CAT to hold talks with Advanced Info Service, DTAC and True Move about a joint wireless broadband system," Mr Mun said.

HSDPA technology can be quickly deployed by leveraging the existing GSM system infrastructure, the technology used by all three main mobile operators.

Upgrading the current GSM systems to third-generation high-speed wireless technology would also eliminate the need to secure new licences from the National Telecommunications Commission, which has been slow to approve new 3G and wireless broadband technologies.

Mr Mun said a co-operative approach would help break the long-standing deadlock that has hindered technological development of the telecom sector.

He claimed that the private operators were prepared to invest heavily in the new system, which involves cost upgrades of around two million baht per GSM base station cell site.

The three largest cellular operators have around 27,000 cell sites nationwide.

"If we just let things go on as they are now and wait for the existing concessions to expire, it will be too late and significantly affect both the TOT and CAT," Mr Mun said. "The day the concessions expire, their value will be zero. And we will have lost all opportunities to develop the sector and the overall economy."

AIS operates mobile services under a revenue-sharing concession with TOT Plc, while DTAC and True Move have a similar concession with CAT Telecom.

Efforts to introduce new technologies have been long hindered by legal conflicts over existing concessions, regulatory delays and policy uncertainties.

Previous governments have supported converting the existing concessions into new licences, with the network assets now owned by the state but operated by the private sector to be sold off to existing operators for a fee.

But concession conversion has made zero progress due to conflicts regarding how the assets should be valued and the compensation that should be paid to the state enterprises. Both the TOT and CAT derive the bulk of their revenues from their concession-sharing arrangements.

Mr Mun said that allowing the concessions to expire over the next decade would be costly for the country's economy and consumers alike.

HSDPA technology is used by 154 network operators in 71 countries. The protocol is part of the GSM family, which dominates the world's mobile systems with a market share of 86 percent.

Mr Mun, 67, has degrees in economics, political science and law. He said he also wanted to improve not just the country's ICT infrastructure, but also digital content available to the public.

He plans to also push forward with legal reforms to certify the use of electronic signatures and contracts in commercial transactions to eventually support the full development of a digital and paperless economy.

Software development, a 50-billion-baht per year business, also could be expanded significantly, particularly in terms of local development.

"We need to establish quality tool centres in the country for the industry to grow," Mr Mun said.

"I will co-ordinate closely with the National Telecommunications Commission and the National Electronics and Computer Technology Center to eliminate existing development obstacles and establish a clear policy going forward."

A shift to HSDPA technology would be a major policy reversal. CAT Telecom now offers cellular service in 25 provinces under the CDMA system, a protocol incompatible with GSM networks, through Hutchison CAT Wireless Multimedia.

CAT has commissioned China's Huawei Technology to expand the CDMA system to another 51 provinces, although the project has been mired in legal conflicts over delays in meeting the contract terms.But CDMA currently claims only around 980,000 users nationwide, compared to a combined 53 million cellular subscribers for AIS, DTAC and True Move.

"Even Hutchison agrees that there is no point in moving forward with CDMA. Establishing a new network altogether would be more effective," said one senior CAT Telecom executive.

A CAT group looking into the possibility of a joint public-private venture into HSDPA third-generation technology concluded that the best model would be to leverage existing contracts between the private operators and the state.

DTAC and True Move would transform their build-transfer-operate concessions into a lease agreement for 850Mhz network assets already transferred to CAT. Hutch, meanwhile, would have its marketing contract for CDMA scrapped and instead be directed to network assets now used by True Move and Hutch for 3G services.

AIS would undergo a similar transformation, switching its concession into a lease agreement for the 900 and 1900Mhz frequencies with TOT.