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Thailand’s 3G saga ends up in new limbo

Thailand’s endless 3G saga has finally find an outcome : back to the good old fashioned way of dealing problems. Give everything to bureaucrats in state monopoly, and never mind the private sector and the rest of the population: sure they will eventually have to pay more for less service, but who cares ?

Olivier Languepin

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3G old phone

Thailand’s endless 3G saga has finally find an outcome: back to the good old fashioned way of dealing problems by giving happy bureaucrats a state monopoly. Never mind the private sector and the rest of the population: sure they will eventually have to pay more for less service, but who cares ?

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In the end, the botched 3G auction seemed to have been just a convenient, but costly, way to get rid of any private or foreign competitors to enter the game. The cabinet finally approved TOT PCL’s planned 19.98 billion baht ($653.3 million) investment in a 3G network. According to the Cabinet resolution, the Finance Ministry will not guarantee any loan for the project, while TOT will set up a new subsidiary to handle investment in partnership with the private sector. TOT is expected to start the bid to procure the network within three months.
3G old phone

With 3G granted to state monopoly, private companies will now have to approach TOT and CAT if they want to take part in this new, lucrative market, without clear and transparent rules

The long-delayed 3G service license auction has made Thailand among the last countries in Southeast Asia to fully deploy advanced wireless technology. The process has repeatedly been delayed due mainly to the absence of an independent body to regulate broadcasting frequencies, as well as changes in state administrations.

Private operators in Thailand currently operate second-generation mobile-phone services under concessions granted by either TOT or CAT Telecom, which require revenue sharing of around 20%-30% with the state companies.

The winning 3G licensees would have to pay an annual fee of 6% of their revenue to the NTC.

This new development will turn TOT and CAT into the sole operators of nationwide 3G services, which allow better and faster flow of such data as text, e-mail, social media and video on mobile phones. These services are considered crucial in generating revenue in an industry where traditional voice revenue is declining because of intense competition.

As the NTC is unsure about the scope of its licensing authority, TOT and CAT will play a dominant role. Even if they are no longer in a position to grant concessions, they will be the sole providers of the new wireless broadband services. Companies will now have to approach TOT and CAT if they want to take part in this new, lucrative market. Without clear and transparent rules, this could take Thailand back to past mismanagement.

Bangkok Correspondent for Siam News Network. Editor at Thailand Business News

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