With most markets from Pakistan to the Philippines planning to issue spectrum licences during 2012, opportunities abound for existing players, new entrants and others involved.  But a brief look at various plans also highlights the disparate state of development of telecoms in various markets in terms of penetration, technologies and involvement of foreign investors.  This raises a number of complex and strategic issues for governments, regulators, operators, investors and lenders alike.

Bangladesh

During 2012, the Telecommunications Regulatory Commission plans to auction four 2100MHz licences (10MHz each) for 3G/4G services.  One is to be reserved for a new entrant, one for the state-owned operator and two for other existing mobile operators.

The launch of these services in Bangladesh will still be some time away, given that network roll-outs will have to follow the auction.  2.3GHz and 2.5/2.6GHz licences were issued in 2008 and commercial services have been launched.

Cambodia

Spectrum management has led to notable spectrum and pricing disputes in the past (including in relation to 2.5-2.7GHz licences).  A recent decision by the government to establish the Cambodia Telecom Regulator (first touted some years ago) is intended to improve the telecom sector’s present management system.

Nevertheless, Cambodia has a dynamic mobile sector with many operators, foreign investors, and relatively modern technological deployment (including launched WiMax services and plans to launch 4G services).

India

It has been well-publicised that the Telecom Regulatory Authority of India plans to re-issue spectrum licences (via auctions), after the Supreme Court cancelled all 122 licences issued in 2008 due to a corruption investigation.  The cancellation affects 11 operators and 60MHz and 413.6MHz of spectrum in 800Mhz and 1800Mhz spectrum bands respectively.  It has affected a number of foreign investors, some of whom have announced they will leave the Indian market.  The TRAI has recommended that the auctions be open, rather than closed for only those who lost their licences, subject to spectrum caps.  The TRAI recommendations are currently being considered by the government.

2.1GHz, 2.3GHz and 2.5GHz spectrum was auctioned in 2010 and commercial 3G and WiMax services have since been launched.

The TRAI has also recommended spectrum liberalisation for 2G spectrum (800/900/1800MHz bands), as part of the auctions and for other holders of 1800MHz spectrum licences which have not been cancelled, the 2010 auctions already providing for technology-neutrality for that spectrum. 

Further, the TRAI has recommended re-farming of 800MHz and 900MHz spectrum (with current licences expiring from 2014 to 2024), to certain 1900MHz and 1800MHz spectrum respectively, in conjunction with the upcoming auctions (given a number of complexities relating to the re-farming of that spectrum as part of the TRAI's overall agenda).  The 1800MHz spectrum remaining, after the auction and amount reserved for re-farming, may be offered to existing licensees who have so far been allocated only the start-up spectrum.

In its recommendations, the TRAI has suggested:

  • that in 2012/13, 5MHz of 1800MHz be auctioned, an additional 1.25MHz spectrum in the 1800MHz bands be allocated to the holders of start-up spectrum, and an auction of spectrum in the 800MHz band be held;
  • that in the first half of 2013/14, an auction of spectrum in the 900MHz band should be held as well as the balance of the spectrum in 1800MHz band (totalling 2x2.4MHz of 1800MHz re-farmed spectrum and an additional 162.6MHz of 1800MHz spectrum);
  • in the second half of 2013/14, the auction of spectrum in the 2.1GHz band be held (5MHz of 2100MHz spectrum which may be vacated by the defence forces);
  • in the first half of 2014/15, the auction of spectrum in the 700MHz band (2x30MHz) should be held;
  • in the second half of 2014/15, an auction of additional spectrum in 2.3GHz band (up to 20MHz) should be held; and
  • some limited ability to trade spectrum be introduced.  

Indonesia

The Ministry of Communication and Information Technology is currently considering proposals to make certain spectrum technology-neutral and to re-farm or release it.  It is anticipated that two additional blocks of 5MHz 3G licensed frequency bandwidth (2.1GHz) will be allocated in 2012.  It has also been announced that additional 2.3 GHz radio frequency in the 2300-2360MHz range for broadband wireless access services utilising neutral technology may be made available for bidding.

There are also proposals to accelerate the switchover from analogue to digital television in order to re-farm the 700MHz spectrum dividend, expected to commence no later than 2013.

3G licences and additional bandwidth have been issued since 2003.  2.3GHz and 3.3GHz licences were issued in 2009 and commercial services have been launched.

Laos

3G services were launched in 2008.  2.5GHz and 3.5GHz licences were awarded in 2005 and 2006 and commercial services have been launched.  Licence applications for 4G serviceshave recently been made to the National Authority of Post and Communications.

Malaysia

The Malaysian Communications and Multimedia Commission has announced plans to award nine companies spectrum in the 2.6GHz band.  It has also said that it anticipates industry cooperation in areas like 4G roll-out.

The MCMC is also consulting on re-farming 850/900/1800MHz spectrum.  700MHz may also become available in due course, including as a result of the switchover from analogue to digital television.  2.3GHz spectrum was awarded in 2007 and commercial services have been launched.

Myanmar

It has been reported that the Post & Telecommunications Department proposes issuing licences for local or foreign owned commercial telecoms networks.

The exact nature and timing of the licences remains unclear, as does the process involved (given the legislative and other reforms required to allow private companies to own telecom infrastructure and to make spectrum available if required, as well as dealing with foreign investment, foreign exchange, sanctions and other restrictions or reforms).

One proposal seems to involve issuing at least two licences for local or foreign owned networks.  Another proposal seems to involve government-run Myanmar Post and Telecommunication building and running a single network, with each state/division granted at least one licence/concession for a service provider to lease capacity from MPT (with the service providers, at least 20 of them in total, able to form joint ventures with local or foreign partners).

With one of the lowest mobile penetration rates in the world, a relatively large population and the government targeting 50% penetration by 2015, there has been significant interest in potential opportunities in Myanmar.

GSM (1900MHz) was commercially launched in 2002, 3G (2100MHz) WCDMA was launched in 2008 (following CDMA (450MHz and 1800MHz)), and WiMax was launched in 2009.

Nepal

The Public Accounts Committee issued a report in early 2012 requiring a review of the radio frequency policy, following allegations of irregularities in the Nepal Telecommunications Authority's issuing of licences.  The report suggests operators may be required to surrender frequency to be auctioned.

The NTA had issued 2G, 3G and wireless broadband access spectrum, and had been considering applications for 4G spectrum and plans to use the digital dividend as a result of the switchover from analogue to digital television for 4G mobile services.  It also recently completed a review of its merger and acquisition policy.

Pakistan

During 2012, the Pakistan Telecommunication Authority plans to auction three 1900MHz/2100MHz frequency licenses (9.8+9.8MHz each) for 3G/4G/LTE services, and to re-issue the 800MHz licence (7.38MHz and 7.38MHz) of defunct Instaphone.  It also plans to issue licences for wireless local loop, fixed local loop and class value added services in the 1900MHz and 3.5GHz bands.

3.5GHz licences were also awarded in 2004 and commercial services have been launched.

Philippines

As part of a recent merger, the National Telecommunications Commission has required the divestiture of 10MHz 3G frequency spectrum in the 2100MHz band.

Four 3G licences were awarded in 2005, but since then significant consolidation has occurred in the market.  A fifth 3G has not yet been awarded, with recent applications rejected on eligibility grounds.  2.3GHz and 2.5GHz spectrum, and certain 700MHz and 3.5/3.75GHz spectrum, has been awarded and commercial services launched.

Singapore

The Infocomm Development Authority is currently consulting on the 'early' re-allocation of relevant spectrum bands "to enable and encourage investment in 4G systems and the provision of 4G services".  2.3GHz and 2.5/2.6GHz bands were assigned in 2005 (with some traded in 2009) and expire in 2015.  900MHz and 1800MHz band assignments expire in 2017.  While some 4G services have already been launched on existing frequency bands, there are concerns that uncertainty over the future of spectrum may hamper development.

The IDA considered, but decided against, re-allocating the 900MHz band at this stage.  14 lots of paired spectrum (2x5MHz per lot) in the 1800MHz band, eight lots of paired spectrum (2x5MHz per lot) in the 2.5GHz band and six lots of spectrum (10MHz per lot) in the 2.3 GHz and 2.5 GHz bands is proposed for re-allocation for use for either LTE or WiMax.  Spectrum caps are proposed, of up to 2x45MHz of spectrum in total for both the 1800MHz and 2.5GHz band paired categories.  The consultation also proposes 2x20MHz in the 2.5GHz band for which only new entrants would be eligible to bid - a different reserve price for that spectrum and longer time frames to achieve roll-out for new entrants is also proposed.

2.1GHz spectrum for 3G mobile was awarded in 2001 and additional spectrum issued to the existing holders in 2010, which expires in 2021.  700/800MHz spectrum is unlikely to be available at this stage given ongoing spectrum coordination with neighbouring countries and their timeline for analogue television switch-off.  There are no foreign direct investment limits in relation to telecoms licences held by companies registered in Singapore.

Sri Lanka

The first commercial 3G mobile licence in Sri Lanka was issued in 2006.  2.3GHz and 2.5GHz spectrum has also been allocated and commercial services launched.   Plans for 4G mobile services have also been announced.  There are a number of foreign direct investors in the market.

Thailand

The National Broadcasting and Telecommunications Commission plans to auction 2.1GHz spectrum to provide 3G services during 2012.  The auction was originally scheduled for 2010 but was prevented at the time by a court injunction initiated by one of the two state-owned telecoms companies.  A touted proposal to encourage a new entrant would involve auctioning 5MHz in each round.

The NBTC has also recently looked at whether to re-farm 1800MHz, 2.3GHz and 2.5/2.6GHz bands for 4G services.  There are a number of foreign direct investors in the market.

Timor-Leste

With the end of Timor Telecom's monopoly, the government has started a tender process for two spectrum licences in the 900MHz, 1800MHz and 2.1GHz bands (with an option for the 850MHz band) for the provision of mobile services. In a departure from current international norms, a points system is to be used based on roll-out and coverage commitments, performance bond amount, track record and financial and operational readiness.

Vietnam

3G licences were awarded in 2009.  The Ministry of Information and Communications approved testing for 4G in the 2.3-3.3GHz range, but an auction of 4G spectrum initially expected in 2012 may be delayed significantly, including to allow for further development of 3G.

Digital dividend spectrum (700MHz) may also be allocated after the switchover from analogue to digital television.  800-1800MHz spectrum is used for 2G and 1900-2100MHz and 2200MHz for 3G.  There are some foreign direct investors in the market.

Potential opportunities

Spectrum is becoming increasingly sought after in a technologically fast-paced and increasingly competitive telecoms world.  Spectrum is a valuable national and business asset, so the management of it is often the subject of debate.

Forthcoming licence issuances in many markets create opportunities for existing players and new entrants, both local and foreign, as well as for investors and lenders.  However, the complex and high-stakes nature of dealing with spectrum issues means that proper consideration should be given to any investment.

We have regional and international tech, media and telecoms experts on-the-ground in South & South East Asia if you need any further information.  We also have leading full-service capability and resources for TMT-related regulatory, commercial, corporate, dispute and finance work – across our teams in Singapore, Jakarta and Bangkok, as well as our four other offices in Asia and offices in Europe and the Middle East.