Thailand's aspirations to lead digitisation in Asean may hinge on the availability of sufficient spectrum, according to a report by the GSM Association (GSMA).
The wireless industry in Thailand uses 320 megahertz of its IMT spectrum, comparable to Bangladesh and Pakistan. That is significantly less than Telenor's nine other markets and represents 50% of the amount of spectrum used in a typical EU country and most developed economies, including Malaysia and Singapore, putting Thailand at a disadvantage compared with its neighbours, said Erlend Fanebust, head spectrum specialist at Telenor Group, which conducted the report together with the GSMA.
If TOT gets the necessary approvals to use its 2300MHz spectrum, this amount will increase to 380MHz, on a par with Myanmar. And if the government awards the 1800MHz spectrum, the figure will rise to 420MHz.
To support further digitisation, the EU plans to double the amount of spectrum available to its mobile industry by 2025 by imposing legal obligations on its member states.
For its part, Thailand has not released "fresh" spectrum into the market since the 3G auction. To prevent the current gap from widening and to deliver on the Thailand 4.0 vision, the country will need to double the amount of spectrum by 2025, the report said.
Mobile network operators have made significant investments in 4G networks, which has allowed Thailand to maintain a reasonable position with respect to its peers. But investing in network infrastructure is not enough. Ensuring a speedy and reliable network that enables consumers to unlock the potential of broadband requires spectrum resources.
According to OpenSignal, Thailand's 4G availability is on a par with that of many developed countries, but its 4G speeds are closer to those of India.
Market impacts
In 2016, Thailand set auction reserve prices at a level lower than independent market value assessments.
This still yielded a "market discovered price" well in excess of the reasonably set reserve prices, though the process can be seen as faulty because the winning bidder was unable to meet its obligations. Thailand is an extreme outlier in spectrum prices in both the 900MHz and 1800MHz bands.
The ultimate goal of spectrum allocation policy should be to achieve the most efficient use of the scarce natural resource and ensure maximum benefit to society. This is achieved by deploying the spectrum to increase network capacity and improve the quality of service for consumers.
The economic damage does not primarily result from the passing on of spectrum costs to consumers via more expensive services, but rather from lower quality of service and lower capacity in wireless networks caused by artificial spectrum scarcity.
Data suggests that almost all the benefits of spectrum are passed on to consumers because, generally, network capacity and quality rise as subscription prices decline. There is a clear incentive for government to work with industry in order to deliver on Thailand 4.0, but following through will require some action in a few key areas.
Steps to follow
The government needs to act quickly to prevent the gap in spectrum availability from widening further.
Consultants should determine reasonable reserve prices and design an auction that ensures that the bidding process generates spectrum prices that reflect the underlying spectrum scarcity.
Increased spectrum availability in the short term must be combined with a clear roadmap for the release of additional spectrum.
The government should apply international best practices for spectrum management to ensure that taxpayers benefit from more revenue and associated taxes.
