Thailand - Prime Minister says conversion of concessions to licences will not delay 3G licences

[bangkok post] Prime Minister Abhisit Vejjajiva says his government's plan to change the concession contracts of the three existing 2G mobile phone operators will not delay a planned auction of 3G licences by the National Telecommunications Commission.

The government would try to complete the process to change the contracts within one month and it would not affect the 3G licence auction, which is set for September, he said.

Mr Abhisit said the change in the contracts was intended to promote free and fair competition and that revenues would be retained.

Finance Minister Korn Chatikavanij proposed terminating the concession contracts of the three private 2G operators: Advanced Info Service (AIS), DTAC and True Move. He wanted the NTC to instead grant them 15-year licences, requiring them to pay 12.5% of their annual revenue as a licence fee. Mr Abhisit said the changes to the concession system would first need the approval of relevant ministries, the National Telecommunications and the private sector.

Mr Abhisit is scheduled to meet the NTC board today to hear its views on the government's proposal.

He said if the NTC board agreed with the changes to the concession contracts, the auction for the 3G spectrum and the frequency allocation bill would have to be amended in the same direction.

Meanwhile, deputy director of the Office of the State Enterprise Policy Committee, Kulis Sombatsiri, said that a joint Finance and Information and Communication Technology committee would hold its initial meeting tomorrow to discuss the 3G licensing.

Mr Kulis said the main concern with the government's plan is the 12.5% of annual revenues that operators would be forced to pay in exchange for a 15-year concession. Mr Kulis said there was a concern that operators would not be able to afford the fees and might pass the costs on to consumers.

He said that because 2G could be upgraded to 3G, licences for the respective spectrums are close in value. As a result, he said, the bid prices for 3G licences might be lower than expected.

He cited the example of the 2G spectrum in Germany, where licences on the 800 and 900 MHz spectrum were valued five times higher than those on the 3G spectrum because they could be upgraded.Saree Ongsomwang, head of the Foundation for Consumers, said it was unclear how the government's plan to change the existing concession contracts to licences would benefit consumers.

She called on the government to explain clearly the benefits to consumers of the policy.

'No delay' in 3G auction