TOT seeks partners for 2.3-GHz band amid licensing confusion

Thailand state telco TOT has begun the search for a partner for its lucrative 2.3 GHz band, of which it has 64-MHz until 2025.

TOT’s SE-VP for wireless business Rungsun Channarukul announced that starting this week, the state telco would begin talks with vendors and potential partners. Once the bidding documents are ready, those potential partners will then compete via a beauty contest to see who make TOT the best offer, with the final selection expected in March.

The capacity of the network will be split 20% for TOT mobile, 20% for TOT fixed lines and 60% for the partner.

Rangsan said the network will cover 80% of the population by 2020, and that TOT expects 10-19 million subscribers. He said that an MVNO would be selected in Q2 this year, and that TOT expects to generate $19.8-$22.6 million (700-800 million baht) in revenue in the second half of the year.

However, the announcement has opened a can of worms. Allan Rasmussen from consultancy Yozzo pointed out that back in October when the plan was first discussed, NBTC Secretary-General Takorn Tantasit said, “TOT will have the rights to use the spectrum to operate a wireless broadband service without an operating license.”

This statement is clearly worded carefully to avoid triggering Article 46 of the NBTC Act that says a licensee must use its spectrum itself and cannot sub-let it. Article 46 was specifically put in to prevent spectrum from being acquired by rent collectors – which is ostensibly what CAT and TOT have become over the years.

However, Section 84 of the NBTC Act clearly says that any person lawfully using an assigned frequency on the date the act comes into force – and who is in compliance with Section 82 – is deemed to be licensed under the act.

The setup of TOT’s deal mirrors the deal between fellow state telco CAT Telecom and True on the 850-MHz band, whereby CAT has sub-let its legacy AMPS 800-MHz spectrum to True in a de facto network concession in all but name, and it is run without a license.

Then there is the delay in getting 2.3 GHz off the ground. In the two years since the project was first discussed, all that TOT has succeeded in doing is talking to people.

TOT currently has the most spectrum of all telcos – 145 MHz in total – yet has 0.18% market share in a market of 91 million subscribers. The telco had a three-year head start in 3G launching in December 2009 but has failed to develop the network beyond an embryonic phase.