thegreglowe.com

By GREG LOWE
IN BANGKOK

THAILAND’S biggest mobile phone operator has denied reports that it has slashed its 3G budget because of the credit crunch. But it has ‘consolidated’ its plan to roll out 3G technology because of red tape, its president said.

AIS plans two 3G telephone services in Thailand – 3G900 operating on its existing 900 megahertz (MHz) frequency and 3G2100 on a 2100 MHz band that is yet to be licensed.

While more advanced and cheaper to run, 3G 2100 has hit a wall as industry regulator the National Telecommunications Commission (NTC) continues to delay licensing the frequency.

AIS is reluctant to pump fresh money into developing 3G900 when it will have to repeat the process once it upgrades to 2100MHz.

‘It is not rational to further develop 3G900 since the commercial terms and conditions are no better than 3G2100,’ AIS president Wichian Mektrakarn told The Business Times.

‘The overall budget for 3G900 is US$150 million and US$61 million has been approved to use this year. We have not cut back anything yet.’

Thailand’s mobile phone networks have to obtain concessions from one of two state-owned telecommunications companies – TOT and CAT Telecom.

AIS has a TOT concession. For 3G900 it pays TOT annual fees plus 30 per cent of revenue for post-paid services and 20 per cent for pre-paid services, under a build-transfer-operate concession that runs until 2015.

While 3G2100 will include upfront bidding fees of US$200-300 million plus annual fees, revenue sharing is cut to 7 per cent.

AIS is cautious with its remaining plans for 3G900. It is consolidating its coverage in the major provinces of Bangkok, Chiang Mai and Chonburi, rather than spreading its investment more thinly over smaller areas in many provinces.

A further US$89 million will be spent on developing the 3G900 service until 3G2100 is licensed.

‘Once we obtain 3G2100 licence, which has been pending for four years now, we’ll heavily invest in the network build-up,’ said Mr Wichian. ‘We plan to spend US$720 million per year for the first three years. We keep being told by NTC that the licence will be issued next year.

‘I don’t want to guess any more. When it comes, we’ll invest. There’s no point putting together a big budget just to prepare for nothing.’

AIS launched Thailand’s first 3G commercial network in the northern city of Chiang Mai in May – with limited success. 3G data average is still low at 20 megabits per day per user.

Published November 6, 2008
© The Business Times