Yesterday’s auction of 3G licenses ended much as we (and everyone else) expected, but critics haven’t cooled their jets in the least.
As reported by Reuters, AIS, DTAC, and True had successful bids totaling 41.63 billion baht ($1.36 billion) for 15-year licenses. The final price was a mere 2.8% above the starting price and slightly lower than experts predicted.
Critics see the results as confirmation that the controversial auction was not competitive and perhaps even corrupt. One expert observer said that the auction price might have been the cheapest in the world for a 3G license over the past 15 years, the Bangkok Post reported. Considering that the proceeds go into state coffers, a state auction that seemed structured to produce a low price for private bidders certainly deserves a raised eyebrow or two.
“It’s the most ridiculous auction in the world,” said Green Politics group leader Suriyasai Katasila, who had previously tried to stop the auction. He said that the telecoms operators will pay less for 3G than what they currently pay the state for their already-held concessions. “Six licenses were given out free to the private sector, correct? And three licenses saw bids only to create the illusion of competition.”
While consumers may not see immediate effects, especially considering all three companies are already operating 3G networks under temporary concessions, long term they should benefit. The new licensing system reportedly will lower regulatory costs, and the low final price of the auction means operators can charge lower prices to consumers. The licenses also stipulate that holders must expand their 3G networks to larger percentages of the Thai population. However, as we pointed out yesterday, the coverage percentage stops at 80% of the populations, so those of you reading us out in the sticks may not have much reason to celebrate.
Despite receiving the licenses at such a rock-bottom price, shares for all three companies fell. “People in the market are still wary about potential legal challenges against the auction,” the AFP quoted telecom analyst Prasit Sujiravorakul as saying. With lawsuits expected soon, we shouldn’t expect this saga to end anytime soon.
Meanwhile plans continue for a 4G license auction to be held in 2013. Unlike in the 3G auction, the bidding in the 4G auction is shaping up to be ferociously competitive.
We can’t wait!
