Comments on the NBTC’s public hearing regarding spectrum auction and the TIMO theory

We are deeply concerned by the NBTC’s proposal for a simultaneous multi-band spectrum auction.

Several key issues remain unresolved, including the merger conditions (capacity allocation for MVNA/MVNO, pricing, and service quality), MVNA/MVNO promotion, wholesale pricing frameworks, and the overall lack of competition in the market.

A simultaneous auction risks perpetuating the current stagnant market structure for another 15 years, which will impact future development and competition.

Before proceeding with any auction, the NBTC must address these outstanding issues and enforce its own regulations. We therefore strongly recommend a phased auction approach, initially limited to one or two bands, and only after the NBTC has satisfied these prerequisites.

Given that over the past decade, the enforcement of the current regulatory requirements on capacity allocation to MVNA /MVNO has not yielded any concrete results, MVNO Services Co., Ltd. proposes to set clear conditions for license applicants in the auction, requiring them to demonstrate a concrete commitment to enter into a wholesale network agreement.

In particular, applicants will be required to have evidence of an existing wholesale agreement with an MVNA/MVNO or at least a signed “Head of Terms” document setting out the key terms of such agreement in order to be eligible to participate in the auction.

This requirement not only addresses the shortage of access to the network for MVNA/MVNOs, but also supports the goal of making the best use of spectrum resources (which are national assets) by balancing market interests, promoting competition, and ensuring that spectrum allocation benefits all parties, including the country, businesses, and end-users.

This requirement is in line with existing regulations, including merger conditions and practices in foreign markets, which aim to promote fair competition and provide more comprehensive services.

MVNO Services Co., Ltd. would like to express our opinion on the concept of “Thailand Independent Market Operator ( TIMO )” as follows:

1. TIMO should not be part of the spectrum auction:

TIMO is just a theoretical concept with no empirical evidence in the telecommunications industry, and it is therefore inappropriate to include TIMO in any regulatory framework, including this spectrum auction. TIMO has not yet been established, there is no clear timeframe for its implementation, and its actual role and scope are unclear.

The introduction of TIMO into the auction process will result in delays and uncertainty in the market, which will hinder investment and service expansion by actual service providers.

2. The TIMO theory has no evidence of success in the telecommunications industry:

Although some of TIMO’s concepts may be appropriate for the energy industry, there are no case studies or empirical evidence to support its effective application in the telecommunications market.

The structure of the energy and telecommunications markets differs greatly. Electricity is a homogeneous commodity, which makes the pricing and distribution of the resource systematic and predictable. In contrast, telecommunications spectrums are heterogeneous and vary greatly in frequency, coverage and propagation characteristics.

Requiring MNOs to allocate capacity to TIMOs for MVNA/MVNO use will only lead to further delays and will not truly solve the problem of competition in the market.

3. Existing regulatory enforcement issues that have not been resolved:

For over a decade, MNOs have been required to allocate capacity to MVNAs/MVNOs, but this has not been done effectively due to the lack of enforcement of their own regulations by the NBTC.

Instead of the TIMO theory, the solution is to effectively enforce existing regulations, rather than creating new, unproven and unknown theories, such as TIMOs.

4. Concerns regarding the cost and effectiveness of TIMO:

Establishing TIMOs will require additional management and operational structures, which will lead to higher costs and burdens for the industry.

The introduction of TIMO, an unproven theory, will increase the complexity of spectrum allocation and service provision, which will result in delays in the development of the MVNO market in Thailand.

Consultants who recommend TIMO theory lack important detailed information about the Thai telecommunications market and MVNA/MVNO in general.

5. Recommendations to NBTC:

MNOs should be regulated to ensure compliance with the conditions for providing capacity to MVNAs/MVNOs under existing regulations to ensure fair competition and allow new operators to enter the market.

It is important to study examples from 100 countries that have successfully developed MVNAs/MVNOs and apply appropriate approaches in the Thai context.

Consider allowing National Telecom (NT) to retain some of the 2300MHz spectrum rights to conduct wholesale business similar to the “National Wholesale Network” (Red Compartida) in Mexico, as NT is the only independent service provider in the market.

Allowing NT to hold and service part of the 2300MHz spectrum on a wholesale basis will help balance the competitive landscape in the Thai telecommunications market by allowing smaller operators, including MVNAs/MVNOs, to access the network at fair prices, which will promote competition, reduce industry concentration and provide more choice to consumers.

In addition, the National Telecom Wholesale Network model has been proven to promote competition and expand access to telecommunications services in many countries. Applying this approach to NT may be an effective way to optimize the country’s spectrum resources, support the sustainable development of telecommunications infrastructure, and increase economic value from efficient spectrum utilization.

Importantly, NT is a key hope in reducing the dual-mode telecom market that has limited true competition. Strengthening NT’s position as an independent network operator will open up the market to new players, reduce the concentration of network control, and create a fairer competitive environment, leading to better service quality, pricing, and innovation for both consumers and businesses.

In addition to promoting competition, this move also addresses the security issue of a Single Point of Failure in the event of a failure of one of the two MNOs, which will have widespread impacts on both the public and the business sector. Strengthening NT as an independent network operator is therefore an important mechanism for risk diversification and creating a more stable and sustainable telecommunications infrastructure.