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Thailand claims low 3G prices are justified

Considering the saga of Thailand’s 3G auctions, it is perhaps unsurprising that even after the bidding finally happened this week, they continued to court controversy. The auctions raised a fairly low sum for the Thai government – just THB41.7 billion (US$1.36 billion), around 30% lower than the value projected by regulatory advisors.

Although the final figure only exceeded the government’s reserve price by 2.8%, the committee which headed the auction process has defended the sum, with chairman Settapong Malisuwan stating that the government had aimed to award 3G licences in a timely fashion so that it could allocate 4G licences – possibly as early as next year.

The Thailand Development Research Institute dismissed the auctions as “uncompetitive and underpriced”, although industry analysts have defended the low prices, with Credit Suisse noting that the 3G market was now "an environment under which an arm’s length regulator has created a level playing field for all operators, vastly less complex than the concession structure endured under 2G.”

Thailand’s government maintains that it never intended to sell the licences for the highest possible amount. The three winning bidders were the market leading trio of AIS, DTAC and True Move; they are expected to receive their licences in January 2013 once the regulator has approved the results of the auction.

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