16 May 18

Within the spectrum: How the 2300 MHz deal got inked

The project took over a year to get final approval but ultimately secured dtac’s future.

On April 24, 2018, dtac employees gathered on the 32rd floor of dtac House, Chamchuri Square, to celebrate a big achievement: clinching the 2300 MHz frequency band, for which dtac and TOT had just signed the final deal on April 23, at 1:39 pm. There was a palpable sense of relief as employees clapped and cheered in reaction to the good news. 

This complex deal took more than a year to reach a final agreement, given the legal, technological and business complexities that surround it. The result is a thousand-page document that seemed on the brink of doom at many points during its creation.

We spoke to the eight people responsible for the big project, who told us the inside story of the 2300 MHz deal, a story full of struggle, dedication and ultimately happiness. The team was led by Chief Executive Officer Lars Norling, Chief Corporate Affairs and Business Development Officer Rajiv Bava, Chief Technology Officer Prathet Tankuranun, Head of Government Relations Lertrat Ratananukul, Head of General Counsel Raweepan Pitakchatiwong, Head of Corporate Development Sirawit Klabdee, Head of Regulatory Narupon Rattanasamaharn and Head of Procurement and Network Contracts Nongthanus Tansawas. 

Shifting to a new paradigm

The deal was started with the idea of securing a new spectrum band, which is a key resource of the telco industry. The move came after dtac was outbid for the frequency band of 1800 MHz and 900 MHz under the auction scheme in 2015, which reached prices far higher than global averages. Eventually, the auction’s winning bidders would even ask for emergency relief from the government to pay their dues. But dtac had chosen another way.

Mr. Sirawit said “We at dtac explored many ways of getting a new spectrum, and initially promoted the idea of an early auction, which would allow us to ensure continued services on the same bands as before. The NBTC agreed, but the starting prices for the spectrum auctions remain over 70 billion baht. It left us seeking another way of getting additional band of spectrum.”

Outside of auctions, partnering with state-owned enterprises is another common means to secure additional airwaves. For example, TOT and AIS partnered on the 2100 MHz frequency band while True and the CAT joined hands for the 850 MHz band.

“It’s a huge paradigm shift in the organizational level. We never paid attention on the alternatives in acquiring spectrum apart from the auctions,” said Mr. Narupon. Previously, the assumption was that auctions offer a higher level of transparency and clarity for all stakeholders.

In 2017, the state-owned telecom operator TOT conducted a market sounding in order to gauge the interest of potential investors in the 2300 MHz frequency band. TOT holds 60 MHz of bandwidth on the 2300 MHz band. “It’s a great opportunity for us to seize the most advanced and widest chunk of spectrum available in the market today,” said Mr. Norling. “However, the company needed to ensure that selection process is done with transparency.”

As responsible business practice is at the heart of dtac’s strategy. dtac has a no-gift policy and zero tolerance against all forms of corruption, both internally and externally. 

TOT hired two global management consulting firms – Primestreet Advisory and Detecon – to help select the most preferred partner. This is to ensure that objectivity and transparency throughout the process, with no political intervention. Moreover, each bidder was considered anonymously. Therefore, the selection process solely and strictly happened based on objective criteria. 

“We are not the one who offered the highest price” Mr. Lertrat revealed. “But we are the one who got the highest marks considering all selection parameters. It was the result of a huge effort and dedication from all of dtac’s employees who took part in 2300 MHz deal.”

Additionally, credit for this success should also go to TOT’s commitment on driving the country to fully usher in the digital era under the government’s Thailand 4.0 initiative. The partnership between dtac and TOT is therefore a perfect match.

“We shared a mutual interest to build a foundation for a better Thailand,” said Mr. Lertrat.

Hard work ahead 

After being selected by TOT in May 2017, the road ahead remained long and difficult. dtac and TOT set up a joint working team led by their both CEOs to gear forward quickly and transparently. TOT took a lead in coordinating with related government agencies, such as the NBTC, State Enterprise Policy Office (SEPO) and the Office of the Attorney General.

Mr. Bawa said, “We didn’t know how long the negotiation process would take, but what we knew was that it wasn’t easy due to legal and bureaucratic issues.”

Ultimately, dtac and TOT finally reached the final agreement to provide 4G –LTE TDD services in the 2300 MHz band, marking a historic phenomenon in Thailand’s telecom industry for the use of 2300 MHz for the first time. But the very nature of 2300 MHz makes it a technological challenge, too.

The high-band 2300 MHz is now deployed across 60 countries globally, especially in China, which has a population of nearly 1.4 billion people. China showed the highest potential for the 2300 MHz band, providing services to a large number of people, who are heavy users of social media and mobile applications.

Mr. Prathet reiterated that the 2300 MHz band has 2 key advantages that offer a better experience in using mobile services. First, it provides a single block of 60 MHz bandwidth, the widest band available in the market today. Secondly, it will boost up network capacity to meet rising customer demand for data and prepare for the high-speed and high-capacity 5G era based on TDD (Time Division Duplex) technology.

Mr. Norling added TDD is metaphorically like a highway. It offers flexibility to traffic congestion management based on specific situations. It allows traffic controllers to allocate traffic lanes freely. TDD offers the flexibility of assigning more resources to meet asymmetric data usage, allowing more downlink capacity over uplink, given that changing behaviors, such as streaming HD video, mean consumers need much more downlink bandwidth than uplink.

The advantages of 2300 MHz were enough to make this the best choice to bet dtac’s future on.

As the first mobile operator providing the latest wireless technology in Thailand, dtac has been preparing every aspect for the service launch, ranging from importing signal transmission equipment, radio planning and network installation.

“A huge challenge regarding 2300 MHz is expected to happen during the public launch period, which is a normal situation when we launch a new technological service,” Prathet said.

Over 80 percent of existing 4G phones today are applicable for 2300 MHz, such as Samsung, Apple and Huawei. And that number will reach 80 percent by the end of 2018.

Do the right thing

With more than a year working on this project, the team has learned a lot on making the impossible possible.

Mr. Bawa said faith and transparency between both parties are the key to success. Whenever you struggle or the project is uncontrollably delayed, leaving you feeling unsure, trust will pull you up like a positive force. And this achievement proved that dtac is very committed to providing a better service to its customers. 

“If Thailand strongly desires to become Thailand 4.0, having a strong foundation for its digital infrastructure and ensuring internet access are crucial,” Mr. Norling added.

Ms. Nongthanus said that when it comes to a big project like this, mutual understanding is very important.

Likewise Mr. Prathet said, “With a very lengthy project like 2300 MHz that took more than a year to reach a final agreement, we need to manage the uncertainties that constantly and rapidly change the situation on a daily basis. We sometimes need to step back and look at the big picture to see what the problem is. It’s a kind of do-or-die situation. But luckily, we are very adaptive.”

Mr. Norling said the success of 2300 MHz deal does not belong to only dtac or TOT. Actually, it is a victory for all Thais in preparation to leveling up in the digital world. 

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