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Thai mobile spectrum auction raises US$1.45b with more bids to come

[BANGKOK] Thailand's biggest mobile operators battled for more fourth generation (4G) mobile spectrum on Tuesday, in an auction expected to net at least $2 billion for a military government struggling to revive the country's economic growth.

After 12 hours of an auction process for two licences on the 900MHz frequency with a starting price of 12.86 billion baht, a total of 52.13 billion baht (S$2.04 billion) was bid, or 26.06 billion baht per licence, according to data from the regulator.

Analysts had expected total bids of between 35 and 40 billion baht.

Shares in the top two operators, Advanced Info Service Pcl(AIS) and Total Access Communication Pcl, surged on expectations they will win licences, preventing a newcomer from entering the $6.7 billion telecom market, analysts said.

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The other bidders are third-largest mobile operator True Corp Pcl and broadband operator Jasmine International Pcl. AIS and True paid a combined $2.26 billion for the first set of 4G licences auctioned last month.

Unlike top executives of other bidders, Jasmine's CEO was the only one who did not join the company's bidding team and the market took this as a sign Jasmine may not bid aggressively.

The companies cannot comment publicly while the auction is going on.

AIS shares, which hit near a two-year low on Monday, jumped 10.8 per cent to a four-week high, TAC surged 17 per cent to a three-week high, True rose 9 per cent, and Jasmine gained 10.3 perc ent. The main Thai index was 2.6 per cent higher.

The National Broadcasting and Telecommunication Commission (NBTC) told a news conference bidding prices might be lower than the previous auction in November, given Jasmine is estimated to have an upper bidding limit at 28 billion baht. "TAC and True will be key drivers pushing up bidding prices," NBTC member Pravit Leestapornvongsa said.

After a three-hour break, bidding will resume at midnight and will continue until 6 am (2300 GMT). If no winner has emerged by then, the process will restart at 0200 GMT Wednesday.

The new 4G spectrum will enable companies to expand network capacity and tap robust demand for mobile data in a saturated market, where mobile phone penetration is more than 140 percent.

AIS, 23 per cent owned by Singapore Telecommunications Ltd , has lagged rivals on 4G services due to limited bandwidth capacity. The company plans a commercial 4G launch in late January.

TAC, controlled by Norway's Telenor ASA, wants the 900MHz band licence to reduce its costs, while True, 18 percent owned by China Mobile Ltd, risks a rising debt burden if it bids too aggressively, analysts say.