3G likely focus of new players

New entrants in the local telecommunications market after liberalisation in 2006 are likely to focus only on third generation (3G) mobile technology and the Internet, as the local mobile market is almost saturated, according to the Thailand Development Research Institute.

The TDRI made the comment in a new study on telecom reform, financed by the National Research Council. The study covers such issues as licensing, administration costs, the new national telecommunications Commission (NTC) and interconnection.

It said both existing and new players would compete for next-generation business but the new players would have to work harder because of the large customer bases held by existing operators. The only advantage the newcomers might have would be the right to interconnection with existing networks, as stated in the new telecom Business Law.

The study recommended holding open bids for 3G licences, which would be more costly than other licences because the radio frequency resources for 3G were limited.

It said interest in the fixed-line business was likely to be slim, as the three existing operators _ TOT Corp, TelecomAsia and TT&T _ were facing tough competition from mobile services and also had several hundred thousand unused lines.

The mobile penetration rate, currently 21% of the population, was approaching the saturation point, so the best new opportunities would be in 3G segments such as data communication.

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The TDRI also recommended that the NTC, once it is formed, keep licence fees low, preferably at a level sufficient to cover its administrative costs.

TelecomAsia vice-chairman Athueck Asvanond said that if the NTC issued licences to new operators before existing concessions were converted, it would create an unfair environment for existing players.

Newcomers would have no cost while existing players continued to have the cost burden or revenue-sharing payments under concessions, he said.

But he said that if existing operators could apply for new licences and shift their customers to the new licence holder, then TOT Corp would be affected as it now obtained 25% of its revenue from private operators through concession contracts.

But TOT president Sutham Malila said the NTC should regulate licensing by banning existing operators from applying for new licences, as it would create unfair competition.

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