Monday, 27 April 2009

Double standards at CAT

CAT blocks Dtac's request for 3G shortly after approving TrueMove's request for the same.

The Nation recently ran a story on how former state enterprise CAT Telecom recently, finally, refused a request from number two telco Dtac to launch a 3G service on the 850 MHz band that it currently uses for 1G AMPS, citing that it would be considered a concession amendment that falls under article 22 of the Public-Private Joint Venture act.

What the story did not mention was that when TOT partner AIS made the same request, TOT decided it was not an amendment and that it was a network upgrade and hence AIS was allowed to launch 3G on its existing, if somewhat cramped, 900MHz spectrum. CAT also recently allowed TrueMove to launch trial 3G services on the same 850MHz that Dtac wants.

A while back, I talked to Dtac CEO Torre Johnsen who put things in a somewhat different light.

Dtac was the first of the Thai Telcos who, fed up with the delay that the NTC was having getting its 2.1 GHz 3G act together, wanted to do in-band migration and go for 850 MHz 3G on frequencies it was already using for the 1G AMPS network. Dtac told, not asked, but told CAT it would be performing a network upgrade. CAT had other ideas and came back with all sorts of demands, such as asking Dtac to move its frequencies a bit so that another 5MHz slot could be squeezed in for TrueMove and that CAT, not Dtac, would be the point of call termination for the new 3G network.

In other words, no, Dtac could not just upgrade their network, but would have to move over so that TrueMove could have a say and also bend over so that CAT could control who gets the calls and how.

Dtac's point of view was that upgrading a network with existing frequencies should have been legal and within the existing agreement and that the matter would not have to go to the section 22 committee. On the contrary, asking Dtac to move over and give TrueMove space would definitely be considered a new agreement and would have to go to section 22.

Indeed, when AIS later asked its concession holder TOT the same question, TOT deemed it was a network upgrade and that led to Thailand's first 3G 900MHz cell up in Chiang Mai. Ironically now that TrueMove is using that bit of 2.5 MHz spectrum that Dtac claims it owns, both TrueMove and AIS now have 850 and 900 MHz 3G live in Bangkok, but Dtac still has yet to launch.

The mess leads to a much bigger question: Who runs the show in Thailand? We are supposed to have an independent regulator, the National Telecommunications Commission (as per the 1997 constitution) or its replacement National Broadcasting and Telecommunications Commission (NBTC) as per the 2007 constitution (or, to be precise, as per the interpretation of the 2007 constitution in the pending Frequency Allocation Act, but that is getting a bit too detailed); we are supposed to have privatised the Telephone Organisation of Thailand and the Communications Authority of Thailand and thus move to a free market. But the truth is that the real power still lies in the hands of CAT / TOT and that they continue to act as a government regulator when the time suits them, and as a private entity when the government breathes down the neck.

Thailand seemed to have already decided, once in 1997 and the other in 2007, that the country would be on the way to a free market economy with a liberalised telecom sector. Obviously someone forgot to tell CAT and TOT. Worse, someone also forgot to tell the governments that we have had in the past decade as the Anti-Monopololy act explicitly excludes former state enterprises from the anti-competition legislation.

Today we are in a mess. A mess to the tune of 50 billion Baht a year that these competitors / regulators / privatised entities suck up dry; money that should be returned to the government coffers so that it could be spent strategically by the real regulator in a way that benefits all 60 million people, not just the 17,000 or so employees of the de facto regulator.

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