Mobile phones and iPhone 3G are available since nearly a year in Thailand, but the implementation of the third generation network, has been considerably delayed. Bureaucracy and pressure from the public operator TOT have managed to block the allocation of frequencies, once again postponed to spring 2010.
The mobile business is a highly political issue in Thailand because it is the mobile phone concession awarded to AIS (subsidiary of the holding company Shin Corp), who allowed Thaksin to make a fortune in a record time and subsequently become the most popular politician of the kingdom’s history. It is also the resale of Shin Corp to Singapore’s Temasek fund that was largely responsible for his downfall.
The introduction of 3G is subsequently parasitized by debates nationalist connotation to put aside groups like AIS (main shareholder: Temasek, Singapore) and DTAC (major shareholder Telenor, Norway), whose assets are largely held by foreign companies.
Until now, radio frequencies GSM-900Mhz and 1800Mhz, were held by both public operators (TOT and CAT), which leased the right to use these frequencies to private operators such as AIS or DTAC, required to accept very unfavorable conditions such as the pay back of 20 to 30% of their revenues.
Licensing is seen as a key step in reforming the $4.7 billion sector because companies will pay licence fees instead of giving a portion of their revenue to state-owned firms for the right to operate networks they built themselves, as is the case now.
For Laurent Perche, responsible for Marketing Solution, Alcatel-Lucent (Thailand), 3G is indispensable to the image of Thailand.
“When a company wonders where it will locate its headquarters, telecommunications are a major factor. It’s like questioning the power supply! Today, broadband access is relatively limited. 3G, bringing more competition, would lower costs and better services. The kingdom wants the latest technology with a new airport, Skytrain. But if this continues, it will be the last country to have 3G. “
Both regulators and state and private telecom executives are dumbfounded by economic ministers’ decision on Wednesday to put brakes on the 3G auction process and TOT Plc’s 3G plan.
Gen Choochart Promprasit, the chairman of the National Telecommunications Commission (NTC), said the ministers wanted TOT to delay its nationwide 3G investment project pending clarity on some legal issues from the NTC.
TOT had planned to call bids for its second-phase nationwide 3G investment project worth about 20 billion baht by the end of this year, but was ordered to put the plan on hold.
The NTC’s apparent stubbornness to keep Thailand’s telecommunications industry stuck in technology from the late 1990s is doing the country more harm than its self-proclaimed “for the people” commercials. It is this delay with the auction and subsequent allocation of the 2,100MHz band that is forcing service providers which are on sub-concessions from state-run agencies to make do with what they have.
As long as Thailand lags behind its neighbours in issuing 3G broadband network licences, Thais will lose out on opportunities in exploring the services such as e-books and remote health monitoring.
Thailand is the last remaining country in the Asean group without 3G services, with Vietnam and Laos finally receiving licences this year.
Kaneungjit Suriyathumrongkul, country manager of Qualcomm Thailand, said the new technology would help rural users who cannot connect to the Internet through landline telephones to fully access the web at high speed. The new wireless technology will open up more services to users and accelerate new access options to consumers, as well as open more vertical applications to mobile operators and software developers.
The service would also open new business model possibilities and could allow service providers who own their networks to offer vertical applications.