TDRI chief slams 3G bid as 'fake' and 'calculated'

The president of the Thailand Development Research Institute (TDRI) has slammed the government's "fake" auction for 3G mobile phone service licences, saying bidders got everything they wanted at an artificially low price.

Somkiat Tangkitvanich, TDRI president, alleged Sunday on the think-tank's website that the auction - organised by the National Broadcasting and Telecommunications Commission (NBTC) - was fraught with irregularities.

Advanced Info Service (AIS) bid 14.6 billion baht, while Total Access Communications (Dtac) and True Corp bid 13.5 billion baht to win their licences.

The state made only 41.6 billion baht, Mr Somkiat said, only 2.8% more than the NBTC's combined minimum reserve price.

Compared to similar auctions held for 3G bandwidth around the world, he added, the revenue generated from the 3G auction in Thailand is one of the lowest.

Mr Somkiat said bidders in the NBTC's auction were confident they would obtain the licences without having to offer competitive bids to the state.

He said AIS may have offered a slightly higher bid possibly because it wants the privilege of choosing bandwidths that can be merged with TOT in the future.

Nine slots of bandwidth were available in last week's auction and there are only three major mobile phone service providers in the country.

The NBTC set the minimum reserve price of each slot at 4.5 billion baht for a 15-year licence.

The three major operators won three slots each.

Mr Somkiat said that AIS's decision to offer 1 billion baht more than DTAC and True for preferred bandwidths was suspicious.

He said a 225 million baht margin would have been sufficient for AIS to win its preferred slot of bandwidths.

The unnecessarily high bid, the TDRI president argued, occurred right at the beginning of the auction, in the first round.

This is strange because contenders can gradually raise their bids in later rounds if necessary, he said.

Mr Somkiat said he thought the unnecessarily high early bid was a calculated strategy to show there was an element of competition among bidders.

Green Politics group leader Suriyasai Katasila will today ask the National Anti-Corruption Commission (NACC) and the Office of the Ombudsman to investigate the 3G auction.

He said an NACC sub-committee had advised the NBTC to offer fewer 3G licences than the number of bidders to guarantee real competition, but his advice was ignored.

Vichai Vivitsevi, an NACC member, said the anti-corruption watchdog is only authorised to rule if the NBTC violated its duties.

The power to nullify the auction rests with the Administrative Court, he said.

Share your thoughts

Discussion 1 : 22/10/2012 at 10:20 PM
Currently enjoying the somewhat old 4G network in the Oslo area of Norway. Welcome to back to the future Thailand
Discussion 2 : 22/10/2012 at 09:34 PM
Why the public put up with this bad management and Big" C."is beyond me.The outcome of this auction was as plain as the nose on your face.The unfortunate thing was those making the objections used poor reasoning.
Discussion 3 : 22/10/2012 at 08:19 PM
Anybody had a de ja vu here. Mine is severe.
Discussion 4 : 22/10/2012 at 12:13 PM
"The NBTC set the minimum reserve price of each slot at 4.5 billion baht for a 15-year licence." Do we get stuck with 3G for 15 years now?
Discussion 5 : 22/10/2012 at 12:07 PM
I think it is great that the bandwidth "pie" was split 3 ways although many year late. It could have been quite different a few years back when a previous government just coincidentily changed the laws and allowed AIS to be 49% owned by foreign entities just before a previous prime minister sold his shares. A sweetheart deal at that time could have given it all to AIS and made it more valuable. It was an auction with reserve prices. If the reserve was too low that isn't the fault of the bidders. It could have been without reserve and split three ways at a much lower price or "sold" 100% to a Dubai company for a token fee.
Discussion 6 : 22/10/2012 at 11:51 AM
Of course the auction was a setup but some quick profits for the fugitive and his cronies.
Discussion 7 : 22/10/2012 at 11:39 AM
3G is already outdated..They should skipped ahead and launched 4G instead
Discussion 8 : 22/10/2012 at 09:55 AM
3G, a virtual legacy technology backed up by legacy/counterproductive thinking.
Discussion 9 : 22/10/2012 at 09:54 AM
Is generating income for the State the NBTC's primary objective? Then I think minimum reserve price should be at least one trillion (joking to scare away bidders on a near obsolete 3G). Maybe we should conduct a national referendum on the minimum reserve. LOL.
Discussion 10 : 22/10/2012 at 09:08 AM
Another person who needs to move on and let Thailand enter the modern era.
Discussion 11 : 22/10/2012 at 08:51 AM
Further to my previous comment , it goes without saying that the Thai government is benefitting even though keeping the entry prices relatively low for new spectrum made available now to the three service providers , through increased revenue generated by the public's ability to purchase airtime at relatively low price . These plans are of necessity taxable , whether a monthly plan or prepaid and provide the government with a generous inflow of the latter. I rest my case. from iPhone application.
Discussion 12 : 22/10/2012 at 08:45 AM
I think the 'winners' are finding themselves paying a much higher price - cooked up criticisms. Somkiat singled out "AIS's decision to offer 1 billion baht more than DTAC and True for preferred bandwidths was suspicious" was in itself suspicious. Investor of TRUE (CP food) may find it paying too high for a near obsolete 3G and may also put financial pressure on them. Didn't a president of such an organization as the TDRI that NBTC is an independent agency formed under the Constitution? How is it than that it was "...the government's "fake" auction for 3G mobile phone service licences...." Or was it BP quoted him wrongly?
Discussion 13 : 22/10/2012 at 08:38 AM
Hopefully the low sale price will be reflected in subscriber rates.
Discussion 14 : 22/10/2012 at 08:36 AM
My take on this issue is we must realize that Thailand provides very low cost mobil phone services compared to other developed countries . My average monthly bills were in the vicinity of $140 in the US . The same for Canada . Europe is even more costly . Here in Thailand my bills for the same services are never more than B 1000 monthly , usually far less . So , the bottom line is that Thai people are indeed receiving great value for their mobil services at an extremely fair price. Yes , maybe it is true that to some extent Thailand lags behind in development and deployment of faster networks...of note , Taiwan and S. Korea are already using 5 G bandwidth . To my mind it's an appropriate tradeoff however. So, why " rock the boat " as pundits may say..? from iPhone application.
Discussion 15 : 22/10/2012 at 07:55 AM
Buying a 3G license is like buying a used car. The only reason there were buyers is because it may be the next millenium before 4G is authorized by the greed merchants.
Discussion 16 : 22/10/2012 at 07:48 AM
I agree with Discussion 1. When technology is five years older or more, one can not expect to pay the same price that it was when it was first introduced. Case in point, would you pay 20,000 baht or more for an older version I-phone? I seriously doubt it. If the stores tried to do sell older products at original prices they wouldn't sell anything. While the auction was more than likely a farce at taxpayers expense and it was as usual a behind the doors dodgy deal those who are screaming foul should be thankful they got 2.8 % profit. They should be arguing about why Thailand isn't pushing for 4G.
Discussion 17 : 22/10/2012 at 07:47 AM
Did the president of the TDRI make any comments BEFORE the auction or was he fence sitting as usual. Of course if the government REALLY wanted to make money then they could have scrapped the restrictive laws, opened the bidding worldwide and had sealed bids.
Discussion 18 : 22/10/2012 at 06:51 AM
Perhaps if the restrictive business ownership laws set by the Govt where eased, then maybe there would have been more bidders. Sealed bids as are standard practice in most developed countries, may have helped too. But as with all large projects here of any type, the deal is settled long before the bidding stage.
Discussion 19 : 22/10/2012 at 06:02 AM
I thought NBTC is an independent agency formed under the constitution. I thought BP should know this better on this. How has it becomes a "government's "fake" auction for 3G mobile phone service licences......,"
Discussion 20 : 22/10/2012 at 05:58 AM
No doubt we will see more money being sent abroad after this auction.
Discussion 21 : 22/10/2012 at 05:45 AM
As I have said before, there was no auction. The 3 companies were buying bandwidth at a set price. There would be nothing wrong with selling at a set price if the government would just be honest and say that is what they are doing. Why does Thailand always have to make things so difficult?
Discussion 22 : 22/10/2012 at 05:02 AM
Somkiat "..revenue generated from the 3G auction in Thailand is one of the lowest." Well, the TDRI president may wish to take into account socio-economic factors and the fact that other countries had their auctions 5 years or more ago. At the medium/end of the technology life-cycle (other countries are at 4G), don't expect the prices to remain high. There will always be jokers like the TDRI chief who wants us to just scrap 3G and go back to using smoke signals for long distance communication.

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