According to Brett Tarnutzer, head of spectrum at GSMA, spectrum prices in Thailand have been among the highest in the world.

The 2015 spectrum auctions in the 900 MHz and 1800 MHz bands had record prices totalling over US$4 billion.

The upcoming auctions are set to follow a similar trend, considering the regulator’s decision of setting the reserve prices of the licences for offer in the 900MHz and 1800 MHz bands based on the high final prices from in 2015.

The National Broadcasting and Telecommunications Commission (NBTC) will reclaim 850MHz and 1800MHz bands of Total Access Communication after the company’s concession end on September 15 and put them in auctions in August.

Tarnutzer said that consumers in Thailand expect to benefit from readily available and efficient mobile internet access, for which mobile operators have to finance very high capital and operating expenditure on their networks.

Excessive spectrum prices make this financing very difficult, directly impacting on the operator’s ability for promptly deploy technological solutions to meet the growing demands of mobile users.

Concerns over barriers

Given that an astounding 90 per cent of Internet users in Thailand access online content using smartphones, but only 37 per cent of the population has access to mobile broadband, the government must not let high spectrum prices be a barrier for the advancement of Thailand towards a prosperous digital economy, he added.

This highlights the need for investment in mobile networks in Thailand supported by reasonable spectrum licensing prices instead of using spectrum licensing as a tool for maximising government revenues – an unsustainable path for the mobile industry challenged by the growing user demand for mobile internet access.

Therefore, in Thailand, the investment-intensive mobile provision has become an ongoing challenge for investors due to extremely high licensing costs in addition to the already high network costs, he added.

He said that this issue is an ongoing concern for mobile investors in Thailand, especially as the world starts to move towards the emerging 5G mobile technologies.

5G requires access to much larger spectrum resources, dozens of times larger than the current spectrum requirements of 4G. In a country with extremely high spectrum prices, the 5G vision would seem a very difficult task to achieve for the detriment of citizens.

The GSMA yesterday also released a new report, ‘Spectrum Pricing in Developing Countries’, at the Mobile 360 – Africa conference in Kigali. Tarnutzer presented the report in Thailand yesterday.

According to the report, better spectrum pricing policies are needed in developing countries to improve the economic and social welfare of the billions of people that remain unconnected to mobile broadband services. The study reveals that spectrum prices in developing countries are, on average, more than three times higher than in developed countries, when income is taken into account.

This high spectrum pricing is a major roadblock to increasing mobile penetration.

Authored by GSMA Intelligence, the study also found that governments are playing an active role in increasing spectrum prices to maximise state revenues from spectrum licensing.

The GSMA study assessed over 1,000 spectrum assignments across 102 countries (including 60 developing and 42 developed countries) from 2010 through 2017, making it the largest-ever analysis into spectrum pricing in developing countries, as well as|the drivers and their potential impacts of spectrum pricing on consumers.

Among the countries included in the analysis are Algeria, Bangladesh, Brazil, Colombia, Egypt, Ghana, India, Jordan, Mexico, Myanmar and Thailand – all markets where spectrum licensing is a priority.

The paper added that setting high final prices administratively or setting high auction starting prices (eg reserve prices), artificially limiting the amount of licensed spectrum available, not sharing a clear spectrum roadmap, and setting poor auction rules are some of the policy decisions highlighted in the report that are driving high spectrum prices in developing countries.