3G auctions: How to benefit consumers

Safety for foreign telecoms investors needed for more competitive mobile phone industry. Limits on mobile phone rates needed now.

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Telecommunications

Clearing up the static

22/10/2012

The sale of ... spectrum licences by the National Broadcasting and Telecommunications Commission has attracted a storm of controversy over the process and the pricing...

Was the auction fair?

Critics have lambasted the National Broadcasting and Telecommunications Commission (NBTC) for setting the reserve price below fair value...

...The NBTC ... argues that maximising revenues was never the aim - its primary purpose is to strike a balance between the interests of the state, consumers and operators.

[Some argue]... the auction price was [actually] higher than that received for recent auctions in Korea, Germany and Singapore, once adjusted for economic size...

Regardless, the issue of the reserve price would have been moot if there was greater competition.

Why only three bidders?

According to the NBTC, 17 companies requested applications for the auction, with applications ultimately received by four. One was disqualified...

Which left three bidders, all representing the main private mobile phone operators - Advanced Info Service, DTAC and True Move.

Analysts agree the single greatest factor that dissuaded others from participating in the bid was the foreign dominance issue - foreign shareholding for licence-holders is limited at 49%, and debate has swirled for months over how the NBTC would interpret the foreign dominance clause in its regulations. Foreign telecom companies are understandably wary about participating in the auction so long as this legal risk remains, particularly given the $1-2 billion in new investment required for a new network. The two largest players have been subject to numerous questions about their own compliance and the roles played by their foreign partners - Singapore's Singtel for AIS and Norway's Telenor for DTAC...

Was there collusion in the bidding?

[Collusion] was unnecessary - once it became known that only three bidders would participate, all three knew they would receive spectrum allocations simply by submitting bids at the reserve price...

Some argue that the licences are a handout to the private sector...

It depends on one's point of view. For all three operators, there is no question that the move to a licensing structure will lead to lower costs. All three operators under concession must now pay 25% to 30% of their revenues to the TOT and CAT each year. With licensing, they not only escape the revenue sharing requirement, but also gain significantly greater business flexibility than if operating as a concessionaire.

The NBTC and industry argument is that the move to licences should ultimately help consumers, as lower regulatory costs mean that operators have greater incentive to invest in new technology and greater room to reduce tariffs. On the other hand, auction critics and consumer advocates are correct that total payments to the state ... will certainly decline and that there are no guarantees that competition will actually result in lower tariffs.

What would help reduce tariffs?

If authorities scrapped the foreign shareholding limit, and new entrants participated in future spectrum auctions, it would certainly bring new competition to the sector...

The NBTC could also impose tariff caps to limit charges, and is reportedly already planning to do so for data charges, similar to the current voice tariff limit now set at 99 satang per minute.

[The profitability of Thai telecoms companies is on par with or even higher than telecoms companies operating in other countries]..., suggesting that there is further room for tariff cuts or that assuming the proper regulatory reforms are made, there would be interest from new competitors to enter the Thai market in the future...

(Source: Bangkok Post, Telecommunications, Clearing up the static, 22/10/2012, link)


3G Auctions Vocabulary

network - 1. the antennas, signals, electronics and computers that make mobile phones work; 2. a large system of connected parts เครือข่าย

auction - a usually public sale of goods or property, where people make higher and higher bids (= offers of money) for each thing, until the thing is sold to the person who will pay most การขายโดยการประมูล, การขายทอดตลาด

auction price - the price a good is sold for in an auction (sold to the highest bidder)
reserve price - the lowest price accepted in an auction

bid - an offer to buy something at a specific price ยื่นเสนอราคา
bidder - someone who makes a bid in an auction

participate - to take part in or become involved in an activity มีส่วน
participating in the bid - making "bids" in the auction

submit - officially give something to someone (example: submit documents to government office)
submit bid
submitting bids at the reserve price

collusion - secretly working together to do something dishonest การสมรู้ร่วมคิด
collusion in the bidding - people cheating together to get good price in auction

static noise - the unpleasant noise and fuzzy picture you see on a TV (caused by electricity in the air) 
clear up static - put an end to the static
clearing up the static

licence - an official document that gives someone permission to do or use something ใบอนุญาต
licence-holder - the person who owns a license (won the auction with high bid)

spectrum - a range of radio frequencies that can be used to send phone, TV or radio frequencies สเป็กทรั่ม
spectrum license

allocation - when each in a group is given part of something การแบ่งส่วน
spectrum allocations

controversy - a strong disagreement, especially about a public policy or moral issue ความขัดแย้ง  ประเด็นข้อขัดแย้ง
attracted a storm of controversy

process - a series of actions that you take in order to achieve a result แนวทางปฏิบัติ, กระบวน, วิธีการ

fair -  ยุติธรรม, เป็นธรรม
fair auction
fair value

lambast - criticise or find fault with very strongly
maximising revenues

aim - purpose; goal; the thing you hope to achieve by doing something เป้าหมาย จุดมุ่งหมาย
primary purpose

balance - situation when different features or aspects of something in correct amounts, not too much of anything ความสมดุล
strike a balance between X and Y -

interests – the advantages and benfits that someone gets (depdending on outcome of events) ประโยชน์ส่วนร่วม, ประโยชน์ส่วนบุคคล
interests of consumers
interests of operators

state - government รัฐ
interests of the state

adjust - make a change in something
auction price adjusted for economic size - the higher price of large rich countries reduced to make comparable to smaller countries

issue - a subject that people discuss or argue about ประเด็น
issue of reserve price

moot - does not seem important; of doubtful importance ไม่สำคัญ, ไม่จริง,เป็นสมมุติฐาน
moot issue - an issue that does not seem important

ultimately - finally, after a series of things have happened ท้ายที่สุด, ตอนสุดท้าย, ในที่สุด
disqualified - not allowed to do some activity (because you do not meet requirements)

factor - a fact or situation which influences the result of something ปัจจัย
the single greatest factor

dissuade – to persuade someone not to do something ชักชวนไม่ให้ทำ,ห้ามปราม
dissuaded others from participating in the bid

dominance - when one person, organization or group has more power than others  การมีอำนาจเหนือ, การครอบงำ
foreign dominance - when foreign people or organizations have more power than others
foreign dominance issue

interpret - to decide what the intended meaning of something is อธิบาย,ชี้แจง
interpret the foreign dominance clause

debate - when the good and bad parts or aspects of something are discussed and argued about before decision is made การถกเถียง
debate has swirled - there was a very active debat (seriously considering good and bad points of something)

regulations - official rules that control the way that things are done ระเบียบปฏิบัติ ระเบียบ ข้อบังคับ

wary - careful or nervous about someone or something because you think they might cause a problem ระมัดระวัง
wary about participating in the auction

risk - the possibility that something dangerous or unpleasant might happen ความเสี่ยง
legal risk

so long as - during the time that..., while this contitnues ....
so long as this legal risk remains

numerous - many มากมาย
subject to numerous questions about their own compliance

handout - money or things given to people for free (usually because they are poor and need them)  การให้ทาน

sector - a part of a country’s economy or business activity ภาคเศรษฐกิจของประเทศ
private sector

there is no question that - it is sure that .... , it is certain that ...

concession - a right to operate some business (given by government to a company) สัมปทาน
concessionaire - a company that has a concession, that has permission to do some business

revenue - income from taxes or business activities รายได้
revenue sharing requirement

significantly - in an important way อย่างสำคัญ

flexible - can be changed easily (to meet and work in new situations)
business flexibility

argument - a reason or reasons why you support or oppose an idea or suggestion เหตุผล

ultimately - in the end, after a delay; after many events (not now, not immediately)
should ultimately help consumers

incentive - something that makes you want to do something or work harder, because you know that you will benefit by doing this สิ่งกระตุ้น
greater incentive to invest in new technology

greater room to - more freedom and opportunity to do something ...
greater room to reduce tariffs

critics - people who don’t like something and who state their opinion about it  นักวิจารณ์
auction critics

consumer - someone who buys and uses goods and services ผู้บริโภค
advocates - people who strongly and public support something ผู้สนับสนุนความคิด
consumer advocates

What would help reduce tariffs? If authorities scrapped the foreign shareholding limit, and new entrants participated in future spectrum auctions, it would certainly bring new competition to the sector... The NBTC could also impose tariff caps to limit charges, and is reportedly already planning to do so for data charges, similar to the current voice tariff limit now set at 99 satang per minute. [The profitability of Thai telecoms companies is on par with or even higher than telecom companies operating in other countries]..., suggesting that there is further room for tariff cuts or that assuming the proper regulatory reforms are made, there would be interest from new competitors to enter the Thai market in the future...

authorities - government officials; the police or people in official organisations who have the legal power to make people obey laws or rules เจ้าหน้าที่ (ตำรวจ หรือผู้มีอำนาจ)

scrapped - decided not to continue with something, such as a plan or event ยุติแผนที่วางไว้
scrapped the foreign shareholding limit

entrants - someone starting to do some activity or business for the first time
if new entrants participated in future spectrum auctions

impose - to force someone to accept something กำหนด,บังคับ to introduce something, such as a new law or new system and force people to accept it  นำกฎหมายมาบังคับใช้

data - information (such as web pages viewed on mobile phone) ข้อมูล
data charges - the money you must pay to connect to internet

tariff - the price per unit that those who use some service pay for the service

cap - an upper limit; the highest possible amount
tariff caps

impose - give someone a new responsibility (something they are required to do)   กำหนด ความรับผิดชอบ ให้กับ, กำหนดให้มี
impose tariff caps
impose tariff caps to limit charges

current - of the present time ปัจจุบัน
the current voice tariff limit now set at 99 satang per minute

on par with - about the same as ... , roughly equal ...

further room for - possible to do ....
there is further room for tariff cuts

reform - ปฏิรูป
regulatory reforms

proper - actual or real จริง (พระราชพิธีพระราชทานเพลิงพระศพจริง)
the proper regulatory reforms are made

interest - ความสนใจ
interest from new competitors to enter the Thai market in the future

decline - a weakening or reduction in power การเสื่อมอำนาจ