Thu, Jan 24, 2013 - Page 4 News List

NCC sets rules for 4G licenses auction

REQUIREMENTS:Telecom firms interested in obtaining 4G frequencies must have at least NT$6bn in capital, post a NT$1 billion bond and pass a qualification review

By Shelley Shan  /  Staff reporter

The National Communications Commission (NCC) is scheduled to make public the bidding price for fourth-generation (4G) telecoms service licenses by the end of June, the regulator said yesterday. Many in the industry believe the price will be higher than that for third-generation (3G) services.

The government announced last year that it would release a total of 270MHz of radio frequencies in the spectrum of 700MHz, 900MHz and 1,800MHz for 4G service use.

The commission drafted regulations governing the issuance of the licenses and held a public hearing in November last year.

The commission has made some changes to the draft regulations after hearing opinions from telecoms operators, reducing the minimum units needed to launch mobile broadband services from 15MHz to 10MHz, both to upload and download speeds, spokesperson Yu Hsiao-cheng (虞孝成) said.

If there are five or more qualified bidders, the total frequencies each bidder can obtain will be capped at 35MHz, Yu said, adding that the cap would be raised to 40MHz if there were only four qualified bidders.

For three or fewer bidders, the frequencies each can obtain is capped at 45MHz, he added.

Those interested in obtaining a license must have at least NT$6 billion (US$207.1 million) in capital and be able to afford a bid bond of NT$1 billion. They will also have to pass a qualification review before they can attend the bidding, Yu said.

The commission will use a simultaneous, multiple-round and ascending bid auction system, Yu said. Each bidder will be able to quote the price for each round onve, with the quoted price being a multiple of NT$5 million.

A quote would be considered ineffective if the bidder violates the bidding requirementd.

A bidder would be disqualified if it does not quote the price or places an ineffective bid during the first round.

A bidder would be banned from quoting prices if it gives up the right to do so more than three times in the second and following rounds.

Telecoms carriers must meet several requirements before they are permitted to sell or trade the frequencies they obtain, Yu said.

“Our concern was that some would simply bid for frequencies and then sell them for a higher price without first building the infrastructure needed to provide services,” Yu said.

Therefore bidders will be required to build at least 250 base stations as well as other relevant infrastructure before they can sell their frequencies, he said. Carriers must also obtain approval for the transaction and the certification of the network infrastructure from the commission before a deal could take effect.

Tsai Kuo-tung (蔡國棟), a specialist with the commission’s competitive policy division, said there are still carriers offering the global system for mobile communication (GSM) service in the frequencies up for bid. Some may not obtain the frequency they thought they owned through the bidding process, Tsai said.

The commission only allows GSM service carriers to trade the frequencies, Tsai said, adding they are not required to build facilities first.

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