The government has ordered the Information and Communication Technology Ministry to reclaim the unused portion of the 2300-megahertz frequency from TOT Plc for the fourth-generation (4G) auction.
The development comes after the government decided to allocate other telecommunications spectrum for 4G mobile phones, apart from the existing 900-MHz and 1800-MHz frequencies.
"The ICT Ministry and TOT are studying the possibility of taking an unused 100-MHz portion of TOT's 2300-MHz spectrum and putting it up for auction to widen the bandwidth supply serving skyrocketing demand for mobile data," said ICT Minister Pornchai Rujiprapa.
In exchange for returning the frequency, the ICT minister said TOT might be allowed to keep the 900-MHz spectrum now used by mobile leader Advanced Info Service (AIS) to provide public telecom services for 10 years, keeping it in line with a fundamental requirement of the universal service obligation.
"This proposal could help TOT survive once its concession to AIS expires this September," Mr Pornchai said.
TOT has 100 MHz of the 2300-MHz spectrum. Of the total, 40 MHz of the spectrum can be used to serve 4G demand in Bangkok, with the remaining 60 MHz for the provinces.
He said now would be a good time for the country to redesign current spectrum management policies in order to benefit the telecoms industry and the country.
Mr Pornchai said the National Broadcasting and Telecommunications Commission (NBTC) could prepare a frequency auction for all existing available frequencies without waiting for those that are not ready.
He acknowledged that the government needs to work closely with the NBTC and state concession owners like TOT and CAT Telecom for greater cooperation.
TOT owns 17.5 MHz of bandwidth capacity under the 900-MHz spectrum of AIS through a build-transfer-operate concession contract that will expire this September.
TOT wants to keep the 900-MHz spectrum after its concession expires to provide its own 4G service in order to generate revenue.
The state enterprise also wants to keep the unused 2300-MHz spectrum for its own benefit.
Section 45 of the Frequency Allocation Act stipulates that spectra be allocated only through auctions.
An industry source said TOT has no bargaining power to keep both the unused portions of the 2300-MHz and 900-MHz frequencies.
The source suggested a more practical and feasible solution for TOT to survive is to return the unused 2300-MHz frequency to the state in exchange for keeping a portion of the 900-MHz spectra.
TOT has failed to operate commercial 3G service even though the state enterprise was the first operator to provide 3G service on the 2100-MHz spectrum a decade ago.
However, an industry analyst said the 17.5-MHz bandwidth of the 900-MHz spectra is too small for an auction and too narrow a band to provide 4G service.
Nevertheless, it would be sufficient for TOT to provide public telecom services, said the analyst.