Approaching the end of January is not traditionally the time to look at back at New Year’s predictions, but in the case of Thailand and 3G, convention and sense tend to go out the window.
In my predictions for 2011 in Thailand I optimistically wrote that I hoped for “progress” with the process of getting 3G rolled out in the country… well progress has certainly been made after a hectic couple of days saw two 3G deals inked in quick succession. There’s probably a line there about waiting for buses, but rather than going there here’s a look back at events from last week.
What’s important to note is the overall auction did not take place last week, instead state owned operations CAT and TOT made agreements (albeit one used an auction, ironically) to upgrade their 2G networks to 3G and lease out the newly formed network to existing Thai operators as MVNOs (mobile virtual network operators), which are mobile companies using rented ‘space’ (aka network).
- CAT & True
First up, CAT came to an agreement which will see True complete an upgrade on its network which will be leased out to True enabling the company to offer full, public 3G for 15 years using a new name, Real Move.
More details from Total Telecom:
True Corp.’s Real Move unit will resell 3G mobile services on CAT’s High Speed Packet Access, or HSPA, network for approximately 15 years to 2026, True Corp. said in a statement to the Stock Exchange of Thailand.
Under the contracts, True will upgrade equipment at CAT’s 3,000 base stations to convert CAT’s Code Division Multiple Access network to HSPA.
True plans to spend THB5 billion to THB6 billion ($162 million-$194 million) to install the equipment and convert the 3,000 stations within two years, True Corp. Chief Executive Supachai Chearavanont told a press conference.
Full details of the agreement are summarised in The Nation:
– Real Move to oversee about 800,000 CAT customers on the CDMA network in 25 provinces for two years, during which time it will share 20 per cent of the revenue from the CDMA cellular service with CAT.
– Real Future to install HSPA equipment on the two CDMA networks nationwide.
– CAT will lease from Real Future the HSPA equipment to provide a wholesale 3G service.
– Real Move will resell the HSPA service for 14 years. CAT and True declined to specify further details.
Note: the last 3G auction was postponed due to an objection from CAT Telecom, while further reading on this article can be found at The Nation.
TOT & Sammart, Loxley and others
TOT, the other government-owned operator, elected to auction its network capacity off, rather than pursue a deal as CAT did, with the a consortium comprised of Loxley, Samart, Nokia Siemens Networks, and Huawei Technologies winning out.
Financial details come courtesy of the Bangkok Post:
The SL consortium of Samart, Loxley, Nokia Siemens Networks and Huawei Technologies won the auction with a minimum bid of 16.29 billion baht, which was 6.59 per cent less than the reserve price. The contract is scheduled to be signed next month.
The AU consortium of Advanced Information Technology and United Communications submitted a bid of 16.77 billion baht.
In terms of roll-out time, a separate Bangkok Post article claims that “high-speed telecom services (from Samart) are expected to be available in 13 provinces within six months, and nationwide within one year.”
What about the rest?
AIS was a beaten bidder in the TOT e-auction but there has been no sign of DTAC. Perhaps someone better connected with the situation can fill in the gaps here?
To review, these two deals mean that we are scheduled to see full and public 3G available in Thailand within the next six months at the latest.
The service will come from Real Move, a True Move MVNO subsidiary, and Samart, itself an MVNO, while CAT and TOT will have 3G networks which, I believe they could also use to role out a service.
The rest of the industry – AIS and DTAC – will need to wait until the 3G auction progresses before having a chance to catch up. Unless they can strike similar 3G MVNO deals with TOT or CAT, certainly not likely for now.
Why the wait and auctions if 3G can be done in a flash?
The issue has always been the presence of state-owned operators in a market that includes private telecoms companies. TOT and CAT, the state-owned firms, currently lease the CDMA (2G) network across the industry and progress of 3G auctions broke down after they claimed that the designated government office, NBTC, was not in a position to decide the fate of 3G given CAT and TOT’s unique positions.
It has been claimed that both were looking out for themselves with their objections in order to ensure that they could make lucrative 3G contracts with other telcos, such as these two. A successful 3G auction would seriously cut into the value that their networks could offer, when upgraded to 3G, which would hurt their bottom line. When you add private, foreign-owned firms to the mixer, the outcome is a difficult one as the progress of 3G in Thailand shows.
As I tweeted last week, it is hard to believe that these deals have been agreed in what seems like a very short space of time given that after years of toil the Thai 3G auction has got nowhere. But again this comes down to the politicisation of events through to state involvement in the process with CAT and TOT.
And what of the 3G auction?
These MVNO deals are separate to the main 3G auctions which have been delayed since late last year. The momentum from these two announcements, which give a huge competitive advantage in allowing TOT and Samart/Loxley to offer 3G exclusively of their rivals, puts even greater emphasis on the an auction to allow the rest of the industry to catch up.
Unfortunately, this being Thailand and TOT/CAT having behaved as they have in regard to preventing the 3G process moving forward, it would be of little surprise to see no added emphasis on taking the process forward as public 3G will become a reality and both TOT and CAT may have addition network spectrum to lend out and make profit from.
Certainly the quick fire news of these developments will come as a blow to all who have worked tireless to move the 3G process forward without success thus far, such as Supinya.
So, about that prediction, this may be “progress” for 3G but the future and likely outcome of the auction process just became a whole lot less clear and significantly more important for the industry, can we call that progressive too?