Ovum: 3G will 'become reality' in Thailand

Despite prevailing "vested interests" at play, Thailand likely to carry out 3G auction based on 2100MHz frequency by 2012 due to greater regulatory clarity and urgency, says analyst.
Written by Kevin Kwang, Contributor

Thailand's 3G services continue to be limited at best, hindered by "vested interests" that one telco CEO alleged are political in nature. However, one analyst reckoned that 3G at the 2100 megahertz (MHz) bandwidth will become a reality in the country sooner rather than later.

According to Nicole McCormick, senior analyst of telco strategy at Ovum, there is now greater regulatory clarity" within Thailand with regard to 3G governance and "issuing of spectrum rights". This clarity is a result of the formation of a unified regulator--the National Broadcasting and Telecommunications Commission (NBTC)--with "undisputed powers" to issue 2100MHz wireless spectrum licenses, she added.

The country's Senate earlier this month chose 11 members to be part of this regulatory body, although they have yet to receive royal endorsement to start work on establishing a framework for the sale of 3G licenses, according to a Bloomberg report on Sunday.

As such, even though "vested interests" still persist, McCormick is optimistic that 3G will "become a reality" in Thailand in the near term. The technology, she added, will have a better chance of succeeding moving forward than it did in the past several years.

"We expect the 3G auction to take place in late 2012. The NBTC has to draw up the [framework], but we expect that it will draw heavily on the previous regulator's proposed auction plan," McCormick stated in her e-mail.

The analyst was responding to the Bloomberg report in which Wichian Mektrakarn, CEO of Advanced Info Service (AIS), alleged that political motivations are derailing efforts to introduce 3G services. AIS operates the nation's largest mobile phone network.

"I believe there is still some kind of conspiracy, or some kind of movement to try to stop or delay 3G," he told Bloomberg. "There are still a lot of obstacles. Anything can happen in Thailand."

The executive also stated that because of the uncertainty, the company is reluctant to invest more into building out its 3G infrastructure until the government auctions the licenses and sets rules for operating the service. AIS, together with its rivals Total Access Communication (DTAC) and True Corp, began offering limited 3G services earlier this year.

Last year, Mektrakarn announced that the telco would spend 45 billion baht (US$1.4 billion) over three years to install its 3G network after it is awarded the license, according to a Reuters report.

DTAC, meanwhile, told ZDNet Asia in an e-mail that once the NBTC is endorsed, a masterplan for the sale of the spectrum must be created "as a priority". Details of the bidding process and auction also need to be furnished subsequently to interested parties in order to kick-start the process, which had been in limbo since it was first initiated in 2005, it noted.

True Corp did not reply in time for this story.

Contradicting McCormick's stance, David Beller, a Bangkok-based analyst for Royal Bank of Scotland, told Bloomberg that there are still "a number of hurdles to pass". "Transparency is poor, and vested interests, which could be hurt by the licensing, remain."

Lost opportunities for telcos
Jessica Kwee, research analyst at Canalys, pointed out that the delays are costing Thailand's operators dearly. The consumer market in Thailand is peculiar in that they are attracted to "new technology and branded goods", she said in a phone interview.

This is why even though the 3G infrastructure is limited currently, 84 percent of all smartphones shipped to the country in the second quarter of this year are 3G-enabled, she stated.

Kwee added that once 3G is up and running, the telcos would be more concerted in their efforts to push smartphones to their customers. This, in turn, could spike the adoption rate of these devices, which currently stands at 24 percent of all mobile devices, to 30 percent in the short term, she predicted.

When asked what telcos can do in the meantime to better meet their customers' needs around network performance, she said the stop-gap measure would be to improve the Wi-Fi infrastructure in the country, particularly in the public spaces and schools.

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