Telecom projects halted

The National Council for Peace and Order (NCPO) has put the brakes on three critical broadcasting and telecommunications megaprojects in a move aimed at examining transparency and functioning of the regulator.

The suspension of the three projects worth a combined 85 billion baht has drawn heavy criticism from mobile and digital TV operators. They say the junta's decision will create a domino effect that will cause considerable damage to the industry overall.

The suspended projects are two spectrum auctions to provide fourth-generation (4G) service, worth 40 billion baht; the digital TV subsidy coupons, worth 25 billion; and the universal service obligation fund to provide basic telecommunications infrastructure nationwide, worth 20 billion.

Takorn Tantasith, secretary–general of the National Broadcasting and Telecommunications Commission (NBTC), said the suspensions were necessary because the projects' investment cost exceeded 1 billion baht. They are also in line with the junta's policy of examining transparency and ensuring efficient fiscal budget use.

Currently, the 25-billion-baht digital TV subsidy voucher scheme just received approval from the Broadcasting and Telecommunications Research and Development Fund for the Public Interest to set the coupon value at 1,000 baht. Distribution of the coupons to 22 million households is expected late next month or in early August.

Regarding the 4G auctions, the NBTC will in August auction off two slots on the 1800-megahertz spectrum previously used by True Move and Digital Phone Co, each slot containing 12.5 MHz of bandwidth.

Another auction of two slots containing a combined 17.5 MHz of bandwidth on the 900-MHz spectrum used by Advanced Info Service (AIS) is scheduled for November — one containing 10 MHz of bandwidth and the other 7.5 MHz.

The universal service obligation fund's four-year time frame to provide basic telecommunications infrastructure nationwide is progressing slowly, with only two provinces gaining budget approval so far.

Digital TV operators claim delaying the subsidy coupon scheme will have a negative effect on their broadcasting operations.

Khemmathat Pholladet, president of Bangkok Media and Broadcasting Co, operator of PPTV TV, said the slow coupon distribution means most of the 24 digital TV channels would miss their viewership targets, as viewers would delay purchasing set-top boxes.

These channels are expected to face losses of up to 2.5 billion baht a month.

"If the NCPO wants clarification of all details related to the coupon programme, we are fine with that, as this will tell consumers what they want to know. However, the scheme should not be put on hold indefinitely, as the future of digital TV depends on it as well," Mr Khemmathat said.

He said delaying coupon distribution might affect the banking sector as well since digital TV operators had borrowed massive sums from many commercial banks. If the digital TV channels do not have a strong viewer base and ratings, they will face difficulties repaying loans.

Meanwhile, AIS chief executive Wichian Mektrakarn said the auction delay was bad news for the local mobile industry, as 4G was recognised as an opportunity for consumers to experience super-fast mobile broadband service. Thailand's telecom infrastructure development path could also be affected.

He acknowledged the auction delay would significantly hurt AIS, as the company was at a disadvantage in terms of frequency ownership.

"In an effort to secure our leadership position, we need more spectra to provide 4G service and alleviate heavy data traffic on our existing 3G network," Mr Wichian said.

In the worst-case scenario, AIS would allocate some bandwidth of its 900-MHz spectrum for 4G service temporarily.

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