Thailand’s 4G auction raises $2.25b from True Corp, AIS group cos

The presser at NBTC's headquarter after the auction has completed

After a 30-hour prolonged bidding marathon, True Move H Universal (of True Corp) and Advanced Wireless Network (of AIS) have been announced as the winning bidders for Thailand’s fourth-generation (4G) spectrum auction, which was closed at 80.778 billion baht ($2.25 billion) in the 86th round.

True Move has won the first licence, in the frequency of 1710-1910 MHz and 1,805-1,820 MHz, at the price of 39.792 billion baht. Meanwhile, Advanced Wireless Network, a subsidiary of Advanced Info Service (AIS), got the second license in the frequency of 1725-1740 MHz and 1820-1835 MHz for 40.986 billion baht.

Jas Mobile Broadband dropped off at 38.996 billion baht while the fourth bidder DTAC Trinet gave up at 17.504 billion baht.

The final prices have skyrocketed from the base price at 15.91 billion baht per licence.

“The figure is much beyond our expectation,” Takorn Tantasith, secretary-general of National Broadcasting and Telecommunications Commission (NBTC), told DEALSTREETASIA.

However, he insisted that the high value of the bidding would not affect users because it was cited in the term of references that the winning bidders had to offer 4G tariff rates lower than existing 3G service charges.

That means the maximum 4G rates must be less than 0.69 per minute for voice service and 0.26 baht per megabyte for data service.

“The operators have to plan and calculate by themselves at which price it will be worth for them,” he said.

According to the ToR, the winners must pay half of the bidding fees within 90 days since the auction date. After obtaining the licences, the winners must also roll out their 4G networks to cover half of the population within two years and raise to 80 per cent within four years.

The analyst at DBS Vickers Securities (Thailand) considered that the final price of this auction was twice than expected, which would make the winning operators shoulder higher cost.

“If AIS plans to win two licences (1800MHz and 900 Mhz), it may have to pay for 70 billion baht and half of them are required to pay within 90 days. Therefore, it may need to get more loan than expected, which can affect its financial liquidity and raise its debt-to-equity ratio from 1.3 times to 2-2.5 times,” he said.

The net profit of AIS could be down by 2 per cent from the company’s forecast, however, it should not affect the dividend payment at 5.7 per cent, said Kasikorn Securities’ analyst.

Padon Vannarat, Investment Strategist at Maybank Kim Eng Securities (Thailand), said that the market faced the hard pressure today mostly from the telecom stocks while the bank stocks soared as the banks might benefit from granting loans to the winners.

On the assumption that the winning bidders spent 70 billion baht for two licences, the net profit of AIS would be down no more than 5 per cent and the net profit of True would be lower not over 44 per cent.

Methee Supapong, director of the central bank’s Domestic Economy Department, believed that this auction would be a positive drive toward the Thai economy if the winners could start their investment immediately.

However, shares of the bidding telecom operators slumped today as it closed before the bidding finished and investors were concerned that they would end up paying too much for the contested 4G licences.

The Stock Exchange of Thailand closed at 1,384.29 points, down 0.42 per cent with the trading volume of 46.029 billion baht.

With no change in stock price, JAS close at 5.50 baht with total trading of 4.7 billion baht. Meanwhile, other telecom stocks slump: TRUE close at 9.20 baht per share, down 0.80 baht. INTUCH close at 69 baht per share, down 4.50 baht. ADVANC close at 211 baht per share, down 15 baht.

 

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.