NBTC ‘sternly warned’ on collusion in 3G bidding

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BANGKOK, Oct 19 – Thailand’s Finance Ministry today warned the National Broadcasting and Telecommunications Commission (NBTC) of breaching the Price Collusion Act in its auction of third-generation (3G) mobile licences.

Supa Piyajitti, deputy permanent secretary for finance, submitted a letter to the NBTC indicating that the Tuesday’s auction was not in accord with e-auction procedures—a method which requires more suppliers than the goods put up for bid.

“In this case, the 3G spectrum was divided into nine slots. The nine slots were split into three sets and three suppliers joined the bidding. A question has arisen on whether there was competition at all since the number of products and bidders were equal,” said Ms Supa in her capacity as chairman of the Electronic Government Procurement (e-GP) committee.

She pointed out that there was no competition in the 3G auction, and that the bid winners will profit from the frequencies, which are state resources, for 15 consecutive years. She said that Tuesday’s auction could be in violation of the Price Collusion Act of 1999 as it resulted in the country’s extensive loss of potential revenue.

The NBTC must be accountable for its action, she said.

Comparing it to a car auction, Ms Supa said a bidder who loses in bid can acquire another car elsewhere but the state’s 45 MHZ frequencies are valuable and non-replaceable.

Thailand’s three biggest mobile companies which won the 3G auction on Tuesday were Advanced Info Service, DTAC and True Corp.

Ms Supa said the three telecom operators want licences for uninterrupted service and the value of the auctioned frequencies is overwhelming. She likened the bid results to a clearance sale of the country’s resources.

She said she made the warning in her capacity as deputy permanent secretary for finance and e-GP chairman after observing that there was no genuine competition and the bid prices secured by two operators were not higher than the floor prices originally set by the NBTC.

The Finance Ministry concurrently submitted its reservations on the 3G auction to the National Anti-Corruption Commission, insisting that the NBTC could be in violation of Section 111 of the Price Collusion Act if it proceeds with the 3G assignments.

Ms Supa would not comment on whether the NBTC must follow the Finance Ministry’s instruction. She stressed that the ministry will not interfere in the NBTC’s operations if the agency’s action does not incur such a great loss to the country.

She indicated that the NBTC could have initially called off the auction after finding that the bid price was not higher than its base price of Bt 4.5 billion.