July 18, 2014 / 5:26 AM / 3 years ago

UPDATE 3-Thai military government delays 4G bandwidth auction by a year

* Postponement to ensure transparency, fairness

* Military tells regulator to revise bandwidth allocation

* AIS says has prepared contingency plan

* TAC says has enough bandwidth to limit any impact (Adds comment from TAC)

By Khettiya Jittapong and Viparat Jantraprap

BANGKOK, July 18 (Reuters) - Thailand's military government has postponed for one year an auction for fourth-generation (4G) mobile phone bandwidth, potentially causing billions of dollars of lost investment and sales in a sector that accounts for a tenth of the economy.

Mobile network providers were banking on the extra bandwidth to enable faster data communication services, creating an opportunity to increase revenue. The military gave the auction the all clear in May, but in June said it would be suspended.

The year-long delay will cloud the outlook of Advanced Info Service PCL (AIS), Total Access Communication PCL (TAC) and True Corp PCL. Data services are the only growth driver for the carriers which have seen call revenue fall during months of political turmoil, analysts said.

"4G is the growth story for telecoms companies, so any consequent sell-off of telecoms shares reflects uncertainty in terms of growth," said analyst Parin Kitchatornpitak at KTB Securities (Thailand).

On Friday, the military in a televised statement said the telecommunications regulator must revise the way it allocates bandwidth with transparency, fairness and with a focus on "national security and public interest".

"The postponement is to ensure that things will go smoothly and transparently and that will help protect the public," the military said.

The National Broadcasting and Telecommunication Commission on Friday said it will auction in July next year 25 MHz of bandwidth on the 1800 MHz spectrum and 17.5 MHz on the 900 MHz spectrum. It previously planned to auction the first band next month and the latter in November or December.

The auctions are widely expected to yield at least 42.9 billion baht ($1.33 billion) in state revenue, and prompt investment in the telecommunications sector of at least 100 billion baht, according to the regulator.

Carriers would combined bandwidth won with current concessions to create bandwidth wide enough for 4G services.

CONCESSION EXPIRATION

The military has been scrutinising state-owned companies and major infrastructure projects since seizing power in May, leading to delays in projects approved by a government ousted after months of protests against perceived corruption.

The latest delay will have limited impact on AIS because it had prepared a contingency plan, the market leader said in a statement.

"The delay should benefit us because it gives us more time to develop and upgrade to advanced 4G infrastructure," AIS said.

But analysts said AIS is likely to suffer most from the delay because it has the smallest amount of bandwidth among the top three carriers. It is also the only one without a 4G service though it has the highest number of subscribers with 4G-enabled devices.

Shares of AIS fell as much as 7 percent after the military's announcement. TAC fell 4.0 percent and True 3.1 percent, versus a day-low decline of 0.8 percent in the benchmark index.

AIS, 23 percent owned by Singapore Telecommunications Ltd , is licensed to use its 2G bandwidth on the 900 MHz spectrum until September 2015. But its 3G network is not extensive enough to cope with demand, increasing the pressure to migrate clients to a new spectrum, analysts said.

Second-ranked TAC, which has the most amount of bandwidth and a 2G concession not expiring for four years, said it does not expect any immediate impact from the auction delay because the carrier has sufficient bandwidth to serve its customers.

"TAC currently has the widest bandwidth providing 3G services," Chief Executive Jon Eddy Abdullah said in a statement. "But the industry needs the auction for long-term investment and improved service quality with advanced technology for Thai consumers."

On Friday, regulator Secretary General Takorn Tantasit at a news conference said the expiry dates for 2G concessions will be extended to avoid potential service disruption caused by the auction postponement.

There are about 7 million users on 2G bandwidth on the 1800 MHz spectrum. Most of those are subscribed to True, whose license on the spectrum expires on Sept. 15 this year.

Representatives of True were not immediately available for comment.

$1 = 32.1800 Thai Baht Additional reporting by Manunphattr Dhanananphorn; Editing by Christopher Cushing

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below