Some 400,000 subscribers of Thailand's largest mobile carrier, Advanced Info Service, face a service shutdown at midnight on Tuesday, after the telecom major hands over the 900 MHz license to smaller rival True Corp., which won a hard-fought auction for the bandwidth in December.
AIS CEO Somchai made a last minute appeal at a media conference in Bangkok on Monday.
AIS's concession on the 900 MHz band had initially expired last September. But Thailand's telecom regulator had offered a grace period, allowing AIS to continue operations while it tried to keep its 2G customers connected.
Initially, the company was planning to win back the spectrums in the December auction but as bidding prices shot up to historical highs of over 75 billion baht ($2.1 billion), it decided to drop out. No. 3 carrier True and industry newcomer Jasmine International were the winners.
True CEO Supachai Chearavanont offered on Friday to let AIS use part of its bandwidth for three months, free of charge. But AIS rejected this, saying there could be legal issues.
Instead, it insisted on using the spectrums won by Jasmine, as doubts are looming over the newcomer's ability to pay the hefty auction prices by the March 21 deadline. It offered to pay monthly fees based on the auction prices Jasmine had to pay.
Supachai reportedly said that it was unfair to use Jasmine's slot without investing the entire price. "If AIS is allowed to use [Jasmine's] bandwidth portion, it will be an unprecedented move in the world and people will think bidding in Thailand is just a joke," the English-language Bangkok Post quoted him as saying.
Since it failed to obtain a license in the auction, AIS has been encouraging its 2G subscribers to upgrade to 3G or 4G services by handing out 3G and 4G handsets practically for free. The number of subscribers with 2G SIM cards have decreased to 8 million from 12 million last year, according to the company.
Last week, it signed a "network-roaming agreement" with No. 2 carrier Total Access Communication (Dtac), allowing AIS to continue its 2G service by roaming with Dtac's 1800 MHz band. AIS will pay roaming fees to Dtac.
But while 7.6 million of the 8 million 2G subscribers at AIS will be able to automatically keep their connections by roaming on Dtac's network, the remaining 400,000 will be unable to do so due to their original contracts.
AIS controls roughly 50% of market share with over 38 million subscribers. The 400,000 subscribers account for a mere 1% of the total, and analysts see that the actual impact on its service will be extremely small.
The National Broadcasting and Telecommunications Commission said Monday afternoon that AIS had not made sufficient efforts to update the contracts of the 400,000 subscribers and that its grace period will not be extended.
Takorn Tantasith, the NBTC secretary general, said that the watchdog had notified AIS on March 10 to inform subscribers about the service shutdown. "If AIS had asked its subscribers to upgrade contracts or change to other carriers, the consumers would not have been affected," Thakorn said.
Just before the NBTC decision was announced, CEO Somchai Lertsutiwong held a media conference at his Bangkok headquarters to make a last-minute appeal. "We are confident that another three months will be enough to upgrade the customers to 3G or 4G networks," he said. He did not say that he should have won the auction. "If we had gone with that price, we wouldn't have been able to keep up our network quality or other investments," he said.
A total budget of 8 billion baht has been earmarked for servicing its 2G subscribers this year. A telecom analyst estimated that 5 billion to 6 billion baht of this will be allocated to handset subsidies, while the rest will be for 2G roaming fees for Dtac.
Source: http://asia.nikkei.com/Business/AC/Thai-mobile-giant-faces-fiasco-as-it-shuts-down-2G-service?page=2