UPDATE 1-Thai 3G draws closer, licence auctions this year

* Draft 3G terms to be posted on NTC website this week

* Public hearing on Sept. 28, auction on track

* Telecom stocks have soared recently on hopes for 3G (Adds details)

By Pisit Changplayngam

BANGKOK, Sept 9 (Reuters) - Thailand's telecommunications regulator approved draft procedures for long-awaited auctions for third-generation (3G) mobile phone service licences on Wednesday, which means 3G could be available from the second half of 2010.

The auctions for 3G licences on the new 2.1 GHz spectrum will take place by the end of this year, possibly allowing the National Telecommunication Commission (NTC) to issue licences in early 2010, Prasert Apipunya, its deputy secretary-general, said.

The NTC will hold a public hearing on Sept. 28 so that interested parties can give their opinions on the licensing, he told reporters after a board meeting.

"After the public hearing, we will gather information for the NTC to consider. Then the 3G regulations will be announced in the Royal Gazette, paving the way for the auction to be held this year," Prasert said.

The regulator will publish an Information Memorandum (IM) on the 3G terms on its website this week, allowing the public to study details of the plan.

Under the draft plan, NTC will issue four licences, with one licence of 15 MHz bandwidth and 3 licences of 10 MHz, he said.

Telecoms companies have said they will need at least six months to install networks once they get their licences.

The 3G licensing is a key step in reforming the $4.7 billion sector as it will change the way operators pay regulatory fees and should lead to a reduction in costs.

Under the current concession system, operators pay a portion of their revenues to state-owned firms for the use of networks, even though they have built these networks themselves. And the networks become state property once the concession expires.

In contrast, the operators will pay fixed fees for 3G licences, which should work out much cheaper, although operators are also expected to pay a one-off, upfront fee for the licence, with estimates put at a minimum $50 million per licence.

Analysts expect the fixed fees to be equivalent to 7-8 percent of revenue, versus 23-25 percent for existing networks.

The 3G licences, which will enable operators to tap new revenue through music, video, picture and data services, have been delayed for several years by political obstacles.

Shares in Thai telecoms operators have risen sharply in recent weeks on optimism over the 3G licencing.

The top three operators are Advanced Info Service ADVA.BK (AIS), Total Access Communication DTAC.BK (TACC.SI) and True Move, a subsidiary of True Corp TRUE.BK.

True stock has shot up 35 percent over the past month and touched an 11-month high of 3.12 baht this week, while TAC gained 19 percent in the same period and hit an 11-month high of 41.50 baht last week.

On Wednesday, True was down 2.7 percent at 2.88 baht, while TAC fell 1.9 percent to 39.50 baht.

AIS closed up 0.5 percent at 95 baht after trading at 95.75 baht, a level also seen on Tuesday when it was the highest in nearly 15 months. ($1 = 34.00 Baht) (Writing by Khettiya Jittapong; Editing by Alan Raybould)