Thailand News: Big three apply for 3G; Tantawan rejected

– Thailand news selected by Gazette editors for Phuket’s international community

PHUKET: It’s clear now that the big three in the cellular service industry will be the only bidders for the long-awaited 2.1-gigahertz spectrum on October 16. The spectrum will be used for third-generation wireless broadband.

Subsidiaries of Advanced Info Service (AIS), Total Access Communication (DTAC) and True Corp, and the newly founded firm Tantawan Telecommunications, submitted applications to the National Broadcasting and Telecommunications Commission (NBTC) yesterday for the right to bid for segments of the spectrum. However, Tantawan’s application was rejected because of the lack of some key required documents and a bank-guarantee cheque.

AIS subsidiary Advanced Wireless Network (AWN) was the first to submit an application and related documents, including bank guarantees, early yesterday morning. It was backed by guarantees of Siam Commercial Bank (SCB), Krung Thai Bank (KTB), Thanachart Bank, Kasikornbank and TMB Bank.

AWN was followed by DTAC subsidiary DTAC Network, guaranteed by Bangkok Bank, and then True Corp subsidiary Real Future, backed by SCB and KTB.

A committee examining the submissions yesterday requested additional documents from AWN and DTAC Network, besides those on the NBTC’s list of requirements, to see if they comply with the commission’s regulations against foreign dominance of telecommunication providers. The additional documents were to cover the shareholding structures of AIS and DTAC. Both AWN and DTAC Network were able to provide these documents to the committee yesterday.

AIS is 40.45 per cent owned by InTouch, formerly known as Shin Corp. InTouch is 41.62 per cent owned by Aspen Holdings and 29.66 per cent by Cedar Holdings, both of which in turn are controlled by Singapore’s Temasek Holdings.

DTAC in July revamped its shareholding structure to clear away the risk of being regarded as a foreign dominated entity. DTAC is 42.61 per cent owned by Norway’s Telenor. Thai Telco Holdings owns more than 22 per cent of DTAC, while Telenor owns 49 per cent of Thai Telco.

Tantawan, founded by the Yuthana Photasuthon family, submitted its application at 4.20pm, 10 minutes before the deadline. However, after examination the NBTC dismissed its application, given the lack of some required documents.

NBTC secretary-general Takorn Tantasit said the company submitted an application fee of 500,000 baht versus the total required 535,000 baht (including value-added tax). It also did not bring a cashier’s cheque of 1.35 billion baht. This is required of bidders as a guarantee of support from banks should they win the auction, and includes the application fee.

Yuthana said Tantawan was serious about joining the auction. He said it had obtained a letter from the China Development Bank guaranteeing that it would provide B1.35bn to the company, which he thought would be enough to make its application acceptable.

He added that the transfer of such a huge amount could not be made to his company on time.

Yuthana is the son of Senator Prasit Photasuthon. It is the second time the Pothasuthon-owned company has failed to get in on an auction for the 2.1GHz spectrum. Two years ago, Prasit’s daughter Patamawadee headed an application by WinWin NGV to join the auction planned by the NBTC’s predecessor, the National Telecommunications Commission (NTC). But that application failed because of the lack of a cashier’s cheque and bank guarantee.

Seventeen companies picked up applications last month, including Tantawan, which was just founded on September 17.

The NBTC will hold the pre-qualification process from October 1-8 and announce the names of pre-qualified bidders on October 9. The bidders can appeal the result of the pre-qualification within three days after the announcement.

The commission will hold a mock auction on October 12 and 13 and open the actual auction on October 16. It will officially announce the names of winning bidders three days after the auction is completed.

The NBTC will auction nine slots of the spectrum, each containing a 5 megahertz bandwidth for a total of 45MHz, at a reserve price of B4.5bn. Each bidder can go for a maximum of three slots.

AIS, DTAC, and True each are expected to go for three slots to enable them to offer 3G cellular service effectively.

— Phuket Gazette Editors

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