Escape from concession prison to 3G land
Don Sambandaraksa interviews
Alcatel Thailand chief Vincent Duda
By Jon Fernquest |
You'd think that companies choose to switch technologies only when new technologies provide some extra benefit that the companies can sell to customers.
Technology changes, however, can be also driven by politics and oppressive government regulations that make it almost impossible for a company to get an adequate return on its investment.
This is exactly the situation in Thailand right now, according to an interview in today's Bangkok Post Database.
It wasn't always like this. Thaksin's rise to billionaire telecom tycoon is well-documented in Baker and Pasuk's recent Thai Capital After the 1997 Crisis (2008) (See "Hello and Goodbye to the mobile phone," by Ukrist Pathmanand and Chris Baker, pages 105-125).
(See photo on right of Vincent Duda, in Thailand for 15 years, "knows a thing or two" about Thai telco politics)
Here is the article in full:
Example sentences:
The real driver of 3G here
It's all about escaping existing concessions, Alcatel-Lucent tells Don SambandaraksaWednesday May 21, 2008
3G telephony will happen in Thailand, but will not be out of market demand for high speed data or higher density voice calls. Rather, 2.1GHz 3G is all about escaping from the revenue sharing agreements that bind today's 2G operators in a country where intense competition means that airtime is already among the cheapest in the world.
In an exclusive interview, Vincent Duda, Managing Director of Alcatel-Lucent Thailand, said all the operators had told him that they could not continue with 2G, not from a technical point of view, but from the financial standpoint. Today's operators are working on concessions and have to share their income with TOT or CAT. They all want to move to something else - WiMAX, 3G, 4G - just to get out of the current concession scheme.
The Thai market today is still all about voice and fashion and there is no compelling technical or marketing reason for 3G. The ratio of data usage to voice in Thailand is tiny unlike in Europe or Japan.
Alcatel-Lucent has also been involved in many backbone projects and Duda says that the nationwide fibre networks are more ready for 3G. This is partly because 3G here will be to avoid paying concessions for voice rather than for high speed data and secondly, the large investments by CAT, TOT and the State Railway Authority of Thailand (SRT) around the years 2000 to 2001 means that today there is sufficient fibre to feed even the fast HSDPA 3G cells.
That said, the terminal equipment will need to be upgraded to modern IP (Internet Protocol) equipment and Alcatel-Lucent is now bidding on many upgrade projects.
Alcatel-Lucent is also active on the WiMAX front with 22 contracts worldwide and the largest WiMAX roll-out in the region, in Malaysia, under its belt.
It is partnering with TT&T and True in their WiMAX trials as well as state-owned CAT and TOT. However, he said that the open nature of public sector procurement meant that it was very difficult for suppliers such as his company to invest time and technology transfer for early field trials and he would much prefer to work with the private sector operators, TT&T and True, which understood partnerships.
"Today the people who are investing the most in WiMAX are the people who have the most invested in ADSL. They are not competing but are aiming to use it to serve areas where it is not commercially viable to lay down copper. You will end up with the same large corporations doing WiMAX and ADSL in Thailand," he said.
Duda expressed concern at the way the National Telecommunications Commission (NTC) had allocated very little frequency for Thailand's WiMAX trials. With just 5MHz of spectrum allocated to each operator (most recommend 30MHz per operator), the lack of spectrum will make roaming between cells very difficult once operators start moving to mobile WiMAX and he expects that soon operators will have to merge to pool their spectrum to provide a quality service. Furthermore, the licence as it stands still makes importing WiMAX equipment a very difficult and time-consuming process.
He urged the incoming regulator, the National Telecommunications and Broadcasting Commission (NTBC), to adhere to common sense. While it sounded politically nice to have huge numbers of operators to promote open competition, that was wishful thinking, he said. In reality, only a handful of companies had the money and the will to invest into WiMAX here.
Part of the problem stems from uncertainty regarding foreign ownership of telecommunications companies.
"It is absolutely impossible for foreigners to invest [in telecommunications in Thailand]. With the repercussions on foreign ownership from Temasek (over Shin Corporation) no foreign operator will invest in Thailand unless they clarify the rules and regulations. So we are looking only at the Thai market, and he asked who had the resources, the money, the technology and the experience for a large scale WiMAX network? Very few and unfortunately it will be the same names we have today.
"You're talking about 3G. We know they will offer three 3G licenses and we all know where they are going to go. Think about the reality. Do you think Vodafone or Orange would come to Thailand? There is a remote chance that a Chinese operator might as they are under political pressure to invest overseas," he said.
Despite being behind one of the largest deployments of WCDMA 850 in North America, Duda said that the recent WCDMA 850 and 900 announcements are more about building awareness about 3G in Thailand than a serious roll-out. When the time comes for real 3G on the 2.1GHz band, none of the companies would want to invest billions of dollars into running two parallel 3G networks and it is clear which network any operator would rather invest in given a choice between the niche 850/900 or mainstream 2100 bands, though 1900 is an outside possibility.
"AIS, Dtac and True Move are aware of the small number of handsets available which are ultra-expensive (on 900 and 850). Not many people are willing to pay 20 to 30,000 baht for a mobile phone today. Claiming that you have launched 3G in Chiang Mai or Mae Hong Sorn is another story and it does raise the awareness of 3G in Thailand.
"WCDMA 1900 is extremely interesting with more cost-effective handsets available, if only there was the political will to encourage TOT to solve their issue with CAT and move towards reviving Thai Mobile. This would be extremely beneficial to both the Thai people and for TOT iself and this frequency would have much more chance of success than the CAT CDMA network Huawei has installed," he said.
Vocabulary:
3G (third generation), 3G telephony - the next generation of mobile phone technology, featuring high-speed packet data mobile wireless Internet access and multimedia communication, analog cellular was the first generation and digital the second generation (See Telus glossary)
telecom, telco, telecommunications - sending signals and messages over long distances by radio and telephone
a tycoon - a person who is rich and powerful from success in business
well-documented - detailed description available (in writing or video)
knows a thing or two - knows a lot (understated provides emphasis)
revenue sharing agreements - agreements among companies doing a business together, on how the money made will be divided
agreements that bind - agreements that force you to act in certain ways
airtime - time spent talking to people over a mobile phone connection
exclusive - only one or a few people have this thing, not shared with anyone
an exclusive interview - interview not available to many media providers
Alcatel-Lucent - one of the world's largest telecommunications companies, providing hardware, software, and services all over the globe, the company is incorporated in France and has its headquarters in Paris (See Wikipedia)
a point of view, a standpoint - one way of looking at an issue
a concession - a special right or privilege to run a certain kind of business for a certain period of time, usually given by the government (See glossary)
TOT - a Thai state-owned telecommunications company, originally established in 1954 and corporatized in 2002, main business is fixed line telephones, other businesses include mobile telephones (See Wikipedia on TOT Thailand)
CAT - the Thai state-owned telecommunications company that owns Thailand’s international telecommunications infrastructure including its international gateways, satellite and submarine cable networks connections, until recently CAT had a monopoly on international telephony and CDMA mobile telephony, CAT partners with sister state-enterprise TOT to provide a GSM mobile service and with Hutchison to provide a CDMA mobile service, corporatized in July 2003, CAT Telecom used to be known as the Communications Authority of Thailand (See Wikipedia)
WiMAX - a wireless technology that provides high-throughput broadband connections over long distances, can be used for last mile broadband connections, Hotspots, cellular backhall and high-speed enterprise connectivity (See Telus glossary)
a scheme - a plan (See glossary)
compelling - making you believe or do something
no compelling technical or marketing reason for -
data usage - using a mobile phone to connect to the internet or send large things like photos or videos
voice usage - talking to people over the mobile phone connection, as people normally do
ratio of data usage to voice - measures how important normal use of mobile phones for talking to people (voice usage) is compared to other usages (data usage), in Europe data usage is important, in Thailand not so important
backbone projects -
fibre networks, optical fiber - (See Wikipedia)
upgraded - install new version with new features, improve
IP (Internet Protocol) - the standard for data communication used by teh internet (See Wikipedia)
roll-out - introduce a new service or product
under its belt - already has experience in this area (like eating a food that is in your stomach already)
partnering with - when two companies work on a project together
trials - tests
WiMAX trials - WiMAX tests (before turning it into a profit making business)
open - everyone can participate, process visible to the public
procurement - the formal process of buying things in large organisations
public sector - the government
open nature of public sector procurement -
field trials - tests where the equipment will actually be used (not just in a controlled laboratory)
ADSL (asymmetric digital subscriber line) - a technology for transmitting digital information at a high bandwidth on existing phone lines, unlike dial-up Internet service ADSL provides continuously available connectivity (See Telus Glossary)
viable - able to continue living
commercially viable - can be made into a successful, long-lasting business
lay down copper - make a traditional phone line (from wire or nowadays optical fiber)
spectrum, frequency - the range of electromagnetic radio frequencies used in the transmission of sound, data and video, the potential capacity of a wireless network is in part a function of the amount of spectrum licensed to the carrier (See Telus glossary and Wikipedia)
allocate - give, share among many people
allocated very little frequency - given only a small range of radio frequencies
lack of spectrum - has small range of radio frequencies to transmit calls with
roaming between cells - moving between different areas covered by different antennas (or transmission towers)
merge - join together to become one
time-consuming process - doing this takes a long, long time
common-sense - the natural ability to make good practical judgements, usually in a simple and straightforward way
adhere to common sense - do the obvious right thing
wishful thinking - dreaming, planning to do something impossible
only a handful of companies - only a small number of companies
will - determination to do something
