The telecom regulator has settled on reserve prices for the auction of four 5G 1800- and 850-megahertz spectrum licences, an event that will take place before May 2018 and generate an estimated 150 billion baht.
The benchmark prices were approved at a meeting yesterday and will be submitted to the National Broadcasting and Telecommunications Commission (NBTC) board for endorsement on Nov 8 before public hearings in December.
The auction's design (including reserve prices) is based on the auction of 4G licences in 2015. In common with 2015, the regulator will propose a starting price for each spectrum in order to promote fair price competition among operators, according to NBTC secretary-general Takorn Tantasith.
For the 850MHz spectrum, the bidding will start at 37.98 billion baht and increase in 76-million-baht increments. The bidding for the 1800MHz spectrum will start at 37.45 billion baht, increasing in 75-million-baht increments.
There is only one licence on the 850MHz spectrum, which covers the frequency ranges of 890-895MHz of bandwidth for upload and 935-940MHz for download. The duration of the licence is 15 years.
There are three licences available for the 1800MHz auction: the first slot, 1740-1755MHz of bandwidth for upload and 1835-1850MHz for download; the second slot, 1755-1770MHz/1850-1865MHz; and the third slot, 1770-1785MHz/1865-1880MHz.
Each bidder must place a 1.87-billion-baht bid guarantee with the NBTC before the auction.
NBTC will let JAS Mobile Broadband join next year's auction, even though the company defaulted on its first licence instalment in the 2015 900MHz auction.
"JAS had its 645-million-baht bid guarantee confiscated and was ordered by the regulator to pay an additional 200-million-baht fine," Mr Takorn said. "The company did not file a court appeal at that time."
He said the NBTC must let JAS take part in the planned 5G auction to prevent a legal backlash from the company.
"After a thorough consideration, it's better to allow JAS because the company could file a complaint to the court against the NBTC if the company is blacklisted, which could damage the auction's timeline," Mr Takorn said.
The NBTC has set "very high" penalties for winners that default on their first licence instalment, he said.
Under the latest auction draft, a winner of the 850MHz spectrum that defaults on the first licence instalment will have its 1.9-billion-baht bid guarantee seized and will be ordered to pay an additional 5.7-billion-baht fine.
A winner of the 1800MHz spectrum that defaults on the first licence instalment will have its 1.87-billion-baht bid guarantee confiscated and will be ordered to pay an additional 5.61-billion-baht fine.
"Such high fines will make the possibility of default less threatening to the state," Mr Takorn said.
The NBTC expects the draft auction design to be published in the Royal Gazette in January 2018. But the auction will be run by a new NBTC board, since the existing board ended its working term on Oct 6 but continues to operate as an acting board.
The 1800- and 850MHz spectra are now operated by Total Access Communication (DTAC) under concessions of state enterprise CAT Telecom. Those concessions expire on Sept 30, 2018.
"We hope the planned auctions will be held by May 2018 and licences awarded by June 2018, two months ahead of the expiration of the concessions," Mr Takorn said.
"Two months ahead of the expiry date of DTAC's concession is a proper period to allow customers to transfer and avoid service disruption," Mr Takorn said.
Mr Takorn said only one qualified bidder has signed up for the 850MHz auction. In the absence of another bidder, the NBTC will extend the auction date for another 30 days in order to attract additional participants.
The NBTC will use the N-1 rule for the auction, meaning the number of qualified bidders must be larger than the number of licences auctioned. If all four licences cannot be auctioned off, the regulator will keep the remaining licences to auction later.
