The partnership deal between Advanced Info Service (AIS) and state telecom enterprise National Telecom (NT) on the latter's 700-megahertz spectrum has passed consideration by two subcommittees of the National Broadcasting and Telecommunications Commission (NBTC).
The deal awaits a nod from the telecom regulator's board, which is expected to approve it at its next meeting, according to a source on the NBTC board who requested anonymity.
The two subcommittees considering the deal were for telecom business and another considering the economic impact of the deal.
NT is the merged entity of TOT and CAT Telecom.
Before the merger, CAT Telecom won 20MHz on the 700MHz spectrum bandwidth for signal upload and download during a 2020 auction by bidding 34.3 billion baht.
On March 14, the cabinet approved NT's 700MHz investment project and operational expenditure with a budget of 61 billion baht spanning 14 years.
AIS and NT signed a memorandum of understanding on the partnership last year.
However, NT has yet to provide a commercial service on the spectrum, either via its own operation or via the partnership.
Through the partnership model, AIS plans to buy and operate half of NT's 700MHz spectrum capacity, or 10MHz of bandwidth.
AIS will pay half of NT's 700MHz licence costs on behalf of NT to the NBTC until the end of the payment term.
NT plans to rent and pay rental fees for AIS's cellular networks and related equipment for providing its 5G services on the remaining 10MHz of bandwidth until the end of the licence term.
As part of the deal, AIS plans to help facilitate NT services through network collaboration in the future.
The partnership reduces NT's costs for the licence by half, although NT pays network rental fees to AIS through the licence term.
For its part, AIS expands its bandwidth to 40MHz on the 700MHz spectrum.
AIS chief executive Somchai Lertsutiwong previously told the Bangkok Post the company will invest to expand the 700MHz network to serve mobile demand from both companies.
NT pays rental fees for all related telecom infrastructure to AIS.
Mr Somchai said the 700MHz project will help improve both companies' capabilities in the long term.
AIS holds 30MHz of bandwidth for upload and download (15x2 MHz) on the 700MHz range, while True Corporation and Total Access Communication (DTAC) each hold 20MHz.
True and DTAC already merged, keeping the former's company name. True holds a combined 40MHz of bandwidth on the 700MHz range.
A source on the NT board who requested anonymity said the AIS-NT partnership is in line with the amended NBTC law, which allows more flexible criteria in applying for additional business licences, spectrum licence transfers, and the spectrum licensing regime through means other than auctions.
The law allows spectrum licence holders to transfer the right to use spectrum to others in exchange for the latter paying for the remaining licence payment term.
The NT source said the company already paid three instalments of its licence fee to the NBTC, including 3.3 billion baht for both the first instalment in 2021 and the second instalment in 2022.
NT paid 1.65 billion baht for the third instalment this year, while AIS is responsible for the remainder, or 1.65 billion baht, though AIS is yet to utilise the spectrum.
The NBTC source said the AIS-NT partnership deal was listed as an urgent agenda item at the board meeting on Aug 9 after its two subcommittees submitted their results for the board's consideration.
However, the NBTC board did not consider the agenda as the chairman closed the meeting before it could do so.
A telecom veteran who requested anonymity said there were some critical challenges for the 700MHz mobile phone service launch by NT.
First, the veteran said the service still lacks clear details about a viable business direction, although NT management set a conservative target for a mobile customer base of only 3 million over the next few years after the launch, up from its current tally of 2 million customers on all of its spectrum ranges.
"NT has no real experience nor business mindset to compete in the mobile service market and has not competed for decades, while the market is now saturated," said the veteran.
Second, there is still an unclear projection of potential service revenue and return on investment for the 700MHz service, noted the veteran.
