Our submission to the public hearing on the NBTC’s Telecommunications Business Master Plan 2024 – 2028

Over the past decade the public has seen a range of notifications with fine words in the vision and mission statements, i.e.: Licensing of Spectrum for Telecommunications Service, Notification on MVNOs, Promotion of MVNOs, Wholesale pricing, Per second billing, etc.

Unfortunately, the NBTC has not followed up on these words and actually regulated accordingly. As a consequence, players with significant market power have taken advantage of this vacuum, which has now resulted in a market fully dominated by a duopoly acting as gatekeepers, lowering the development of the digital economy and the country.

However, as we now have a new NBTC in place, we hope and look forward to see these fine words turned into reality by actually implementing – and regulating accordingly, to open the gates for equal access, competition, innovation, and affordable services in the market.

We strongly and urgently advocate for National Telecom to be able to keep its existing spectrum, as this is the ONLY operator in the market to provide access to MVNA/MVNOs and thereby a chance for competition in the market.

The timing on this matter is of the outmost importance, without it, there will be no option for the development of competition, and the defacto duopoly will be able to continue its control of the market.

In the research report “A National Telecom Wholesale Network” we explore the benefits of strengthening the role of National Telecom Pcl. (NT), as a neutral player, by allowing it to retain its spectrum and partner with a MVNA/MVNE, to establish a National Wholesale Network (NWN), as a solution to enable competition into the market.
This approach is largely modeled on best practice from Malaysia’s “Digital Nasional Berhad (DNB)” and the “Red Compartida (Shared network)” in Mexico.

In 2021, Malaysia created a Single Wholesale Network (SWN) model, through the formation of the government owned Digital Nasional Berhad (DNB), to manage the infrastructure. DNB was established to accelerate the deployment of 5G infrastructure and network in Malaysia, and realize its potential to spur Malaysia’s Digital Economy and future, in line with the goals of the Malaysia Digital Economy Blueprint (MyDIGITAL).

This allowed all service providers in Malaysia to join the network through wholesale access agreements. As a result, MNOs and MVNOs have successfully launched 5G services and are now competing on services, innovation and affordability instead of spectrum ownership.

In March this year, the mobile network testing company, Ookla noticed how the network continues to lead, not only outperforming its ASEAN neighbors, with a 5G median download speed of 451.79 Mbps, vs. Singapore’s 329.73 Mbps, Thailand’s 129.40 Mbps, and the Philippines’ 125.14 Mbps – but also globally in terms of consistency, where it scored the highest Consistency Score globally for Q4 2023 at 97.3%.

At the end of 2023, DNB’s 5G wholesale network had achieved a 5G adoption rate of more than 30% and reached a 80.2% coverage in populated areas. In comparison, Thailand launched 5G in 2020 and at the end of 2023 the 5G adoption rate in Thailand was only 20%

When Mexico was faced with a non-competitive situation similar to the one in Thailand today, the government allocated 90 MHz bandwidth on the 700 MHz spectrum to a national, independent 4G wholesale network named “Red Compartida”. The network began its roll-out in 2018 for enterprises and organizations to enter the market as MVNOs, to increase consumer choice, improve quality of service and overcome the digital divide between urban and rural areas.

In the period 2021 – 2022, at least 53 MVNOs launched and began operations, and at the end of 2022 a total of 111 MVNOs were operating in Mexico.

The mobile subscribers served by the MVNOs in Mexico quadrupled from 2020 to 2022, going from 2.55 million to 10.52 million representing a market share growth from 2.5% to 8.6% of total mobile connection in the country.

According to the telecom regulator, Instituto Federal de Telecomunicaciones (IFT), the figure rose to 13.3 million at the end of 2023, equal to a market share of 9.7% of total connections and equivalent to an increase of 2.5 million mobile subscribers/connections in one year.

We cannot underline enough the outmost urgency on letting the National Telecom keep its spectrum slated to be returned next year (2025). The existing MVNOs and MVNO licensees in the market are not able to plan and run or launch their business, as their basic necessities of life = access to spectrum, is in jeopardy with no alternatives.

Why would any company consider investing into a MVNO/IoT/M2M/Private network with only a few months horizon on their business plan/break-even/return of investment?

The suggestion of using NT’s 700 MHz is not a suitable solution for the flowing reasons:

– With both AIS and NT using the small block, there is not enough capacity left for the MVNOs.

– The operation of the 700 MHz will be under AIS and NT will have to pay rental fees to AIS, which will further increase the wholesale price NT can offer to the MVNOs. Hence the MVNOs will never be able to compete. In addition, AIS will need to get information from the MVNO’s business, in order to manage the capacity for them. As such, AIS will have the unfair advantage of knowing what the possible competition is up to and take action before it arrives.

– The MVNOs will be burdened with the heavy costs and regulation of a SIM swap, as its existing customers would need to be moved from the existing spectrum to the 700 MHz, which will result in further loss of customers and the cost related to make and distribute new SIMs.

– While the network will be under the control of AIS, it will be CAT Telecom’s part of NT who will be in charge of the MVNOs. The same CAT Telecom, who lost all their MVNOs partners to TOT in the past because CAT lacked the knowledge and interest in supporting MVNOs.

– Both MVNA and MVNOs have tried to get access to AIS and TRUE/DTAC’s network for a decade but the duopoly have not let anyone in, despite their license conditions of having to give access to minimum 10 percent of their capacity. Although the NBTC says the spectrum license holder have to provide access, and a dispute case can be opened if not, no MVNOs have dared to do so, and right now it does not matter, as such a case can go on for 10-12 years before a final decision.

– Some of the MVNOs are considering closing their business now due to the lack of a spectrum and MVNA/MVNE solution in sight. This not only limits the competition in the market further, but has already send a signal to potential MVNOs candidates and investors to steer away.

Hence we once again, strongly underline the outmost urgency on a solution here and now, and for the foreseeable future regarding the current spectrum at National Telecom.

This matter cannot wait, and as a temporary plaster on the bleeding wound we suggest an extension by minimum 5 years in line with normal business planning and the validity of the MVNO licenses. For a more sustainable solution, we do however, advocate for National Telecom to become a National Telecom Wholesale Network using its existing spectrum.

Although Section 45 of the Frequency Allocation Act stipulates that spectra must be allocated only through auctions and that after expiry of concessions, spectra must be returned for reallocation, there is also precedent for allocating spectrum by other means than by auction.

a) In 2014, NBTC made a deal with TOT (now NT), where TOT got the permission (no auction) to use the 2300MHz in return for giving up its 900MHz, so the NBTC could hold a 900MHz auction. It is the same spectrum we are talking about today (2300MHz).

b) The Thai Constitution, Section 60, stipulates that the state must preserve spectrum frequencies – to be – in the best interests of the people, state security and public benefits.

c) When the NBTC was drafting its plan on unsold satellite orbital slots, to prevent the slots being cancelled by the ITU. The draft provided other methods than an auction of awarding the slots, such as a beauty contest, a revenue-sharing basis and direct awarding of the slots.

d) There has been discussions and reports, on allocating spectrum by other means than by auction since 2014, following the first auction in Thailand, as the primary barrier to successful auctions is the low number of qualified bidders in Thailand.

e) A set of amendments was added to the National Broadcasting and Telecommunications Commission Act, in late 2021. A royal decree that ”supports convergence of technologies for the benefit of the country,” was formulated based on Section 30 of the amended Act.

f) NBTC received recommendations from the House of Representatives and the Senate to add the definition of “technology convergence” stipulated in the legislation, as the infusion of technologies for the benefit of the country, people and economy. Along with it, the NBTC also drafted four new regulations:

– Criteria for allocating spectrum ranges other than from auctions,
– An amendment to the Spectrum Management Master Plan,
– Criteria for applying for business licenses,
– Criteria for spectrum license transfer.

AIS and TRUE will probably challenge a decision to let NT keep its spectrum, with the help from GSMA (the lobby organization of mobile network operators), citing the need for the spectrum to be auctioned instead for “economical benefits” and the “digital economy”.

However, the regulator must consider the situation in the market = will an auction bring the best value?

a) The market is de-facto a duopoly with only two operators AIS and TRUE/DTAC making the amount of bidders even lower than in 2013, where it was already low.

b) The only other time, another party entered a mobile spectrum auction in Thailand was when JAS Mobile Broadband, a subsidiary of Jasmine International, entered the auction for the two 900 MHz licenses in 2014. However, Jasmine was unable to secure sufficient financing and bank guarantees in the market.

Subsequently, AWN (AIS) “won” the re-auction with no other bidders and 10 years later (2024), the NBTC approved AIS’ 100% acquisition of 3BB, as well as a 19% stake in Jasmine Broadband Internet Infrastructure Fund (JASIF), the owner of 3BB’s fiber optic assets.

c) After the TRUE/DTAC merger, the mobile packages by AIS and TRUE/DTAC somehow, and unexplainable caused a collective outcome with the same pricing and usage amount. Could a similar unexplainable collective outcome happen during the bidding at an auction?

d) AIS and TRUE sent similar worded letters to the NBTC about the need for a reprieve on their 900MHz auction payment, which was granted by adding another 5 year instalment period and an interest rate of only 1.5% for the extension period. The controversial extension meant that around THB 19 billion – supposed to benefit the public went to the two operators. This underlines the issue with the auction approach.

e) Opposite other merger cases, the NBTC did not add spectrum divestment, as part of its TRUE/DTAC merger conditions. Instead, the merger maintained and combined TRUE’s and DTAC’s individual spectra, thereby changing the distribution of spectrum in the market.

f) More than a year has passed, and TRUE/DTAC has not delivered on the merger conditions, and there has been no consequences, as such NBTC could consider not allowing TRUE/DTAC to participate in an auction.

g) Since the first license was awarded in 2013, and all licenses since, it states in the terms and condition of the licenses, that a minimum of 10 percent of the capacity has to go to MVNOs. AIS, TRUE and DTAC has never delivered on these terms. The MVNA and MVNOs have never gotten their capacity – only from TOT and CAT Telecom (NT today).

h) NBTC is considering defining a portion of the 3500MHz for private networks. NBTC commissioner Somphop Purivigraipong, who is responsible for telecom business, said that the allocation should not be carried out via an auction. The high cost for spectrum investment would create a barrier to promoting a 5G private network.

However, he also said that the NBTC is unable to prohibit AIS and TRUE/DTAC from participating in the allocation process, even if this portion is mainly supposed to be for an industry 5G private networks.
As such, an auction on National Telecom’s spectrum would be unable to perform to the best advantage.

We would like to direct you attention to “Single Points of Failure”. Relying solely on AIS and TRUE/DTAC as network providers in Thailand means that any significant issue, affecting either network (such as technical failures, natural disasters, or cyberattacks) will have widespread consequences and affect millions of users. Businesses, hospitals, emergency services, public services, law enforcement and other organizations across the country, will face disruptions.

Case in point: The outage at Australia’s telecom operator Optus (Singtel) in November 2023, which left 10 million Australians (40% of the population), without internet or phone services. The outage impacted business, payment, logistic and health systems and raised questions about the country’s core infrastructure.

Indeed, the reliance on only two networks in Thailand highlights the urgent need for diversification and redundancy in critical infrastructure. Having only two mobile networks will lead to severe vulnerabilities and challenges during outages or disruptions.

FULL MVNO/MVNA

We advocate for an update to NBTC’s types of MVNO (“Thin”, “Medium”, “MVNA”), and which
network elements the MVNAs and MVNOs are allowed to have, by proposing that the NBTC allow for “Full MVNO/MVNA” in the market to reflect the changes that have taken place in technology, business models, and services.

The first MVNOs (MVNO 1.0) was mostly basic resellers who did not own any telecommunications infrastructure. They purchased airtime at wholesale rates from mobile network operators and resold wireless services (and other value added services) under their own brand to their subscribers.

However, as ITU points out in: Guidelines for the preparation of national wireless Broadband masterplans for the Asia Pacific Region 2013 (Page 24), MVNOs today (MVNO 2.0) have gone beyond simple resellers to being full MVNO/MVNA with own network elements (I.e. GGSN, SGSN, SMSC, IN, HLR/HSS, etc.) capable of providing a compelling mix of service to end users and M2M.

We draw the NBTC’s attention to the regulatory decision on allowing “FULL MVNO” by its colleagues at: The Info-communications Development Authority (IDA) of Singapore: “Framework for the allocation of spectrum for international mobile telecommunications (“IMT”) and IMT-advanced services, for the enhancement of competition in the mobile market”. (“the IDA Decision”).

The Malaysian Communications And Multimedia Commission (MCMC) facilitates “Full MVNOs”.

The Department of Telecom (DoT) in India, states in its guidelines for MVNO License”, that the MVNOs are free to choose its business model (Full or Intermediate or Thin).

“Full MVNO/MVNA” access is also mandated by the National Regulatory Authorities in EU/EEA Member States.

We encourage the NBTC to consider these Regulatory Decision to facilitate the entry of “Full” MVNO/MVNA, which we consider is particularly important and relevant precedent for the sustainability of MVNOs in Thailand. Not only will this level the playing field, but also update the policy to get with the times, providing vital flexibility to MVNAs and MVNOs in establishing business models suitable for 5G, e-SIM, IoT/ M2M, NFV, etc.

PUBLISH INFORMATION REGARDING MVNO AND WHOLESALE ON NBTC

The NBTC should launch a sub-category on its website with the policies, notification and information in relation to MVNO and wholesale. To encourage foreign investment, all the content should be available in at least Thai and English. In line with Thailand’s entry in to ASEAN it was announced that acts, regulations and notification should be made available in English language as well.