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Wednesday , October 28 , 2009
3G Lesson Not Learned
Posted by klinsong , Reader : 2445 , 14:37:27   | Category : Technology  

Thailand soon will have our very own spectrum auction for 3G frequency in 2.1 GHz. The way the auction is set up will allow maximum earning to the States. Meaning lot and lot of money will go into the government coffer. It sounded pretty good to have high earning for our beloved government, who is so efficient earning revenue for our national resource.

Many papers have been written about the lesson learn on the 3G spectrum auction, some as old as 2001. I quoted one of them here from Peter Cramton "Lessons Learned from the UK 3G Spectrum Auction" (http://ideas.repec.org/p/pcc/pccumd/01nao.html). One recurring finding from these papers is the slow build out of the 3G network when the initial cost for the right to use the frequency is so high. Slow build out mean, low subscriber based which tend to increase the service charge to the end users.

"In practice, excessive spectrum fees can have a negative impact on services. ... Companies may slow the pace of buildout in order to limit the acquisition of debt. ... Excessively high auction prices can slow the roll-out of 3G services and reduce competition in the market for these services". You can read the rest of the article on the internet.

Auction is being use by government not as a mean to encourage fair and beneficial competitionfor the end users, but as a mean to raise maximum revenue for the states. This is an unfortunate side effect of auction. Highlicense pricewill also be needed to compensatethe lost of concession revenue for the two concessionaires.

If there is no farther delay, the government may have its wishes on maximizing the national resource revenue for 2.1 GHz frequency this December. I hope they don't forget to come back and regulate when the operators decide to maximized its recovery from the initial licensing fee by increasing the service fee with the users, like us little people.

Effect of slow build out

3G cost billions: Will it ever live up to its hype?

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comment 2
Alien date : 28/10/2009 time : 21.47

According to the commercials I see on TV here, Verizon has just about covered the U. S. as far as 3G goes with A T & T pretty far behind. (Obviously this was a Verizon commercial). But if this is true, it's pretty impressive. The U. S. is a big country and according to the Verizon map, there are only a few missing spots out in the southwest. Sprint claims they are working on bringing us 4G. They are falling behind Verizon and A T & T for cell phone subscribers, so now they are saying if you sign up for them all cell phone calls to any other cell phones will be free. With my Verizon plan, all my calls to other Verizon phones are free and all my calls are free after 9:00 PM at night. This isn't a problem in the daytime though since nearly everyone I know uses Verizon.
comment 1
panya date : 28/10/2009 time : 18.54

The varying prices which I have read for implementing 3G in more of Thailand than just downtown Bangkok suggest that the telecom companies will have to impose high charges, maybe too high to maintain general public interest.

If the take-up is slower than expected, the charges may well be raised. This will have a negative effect.

As 3G is coming to Thailand so late, this all means that the service will be bad and the advent of 4G will remain even more distant.

The government have handled this extremely badly. As usual, far too much greed and little interest in the welfare of the people.


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Mobile WiMAX Trial

This is a good study case for Thailand to follow. Soon to be release WiMAX trial license to the broadband operator in Thailand!

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