Thanachart Securities kept its ‘overweight’ rating on the Thai telecom sector, saying the Central Administrative Court’s rejection of a petition against the recent 3G auction could help reinstate confidence over the country’s 3G efforts.
The Office of the Ombudsman had submitted the case to the court to decide whether the Oct. 16 auction was conducted fairly under the constitution and frequency allocation laws. Critics say the telecom companies colluded on pricing at the auction.
“We believe the 3G licensing process will be able to move as planned, while worries had subsided as Advanced Info Service, Total Access Communication, and True Corp had paid a 50 percent deposit of the bidding price and completed the required paperwork,” Thanachart said.
The brokerage said it expects the NBTC to issue the 3G licence by Jan. 18, while telecom operators will be able to provide full service by the second half of 2013.
“Unlike the market, we don’t believe 3G investment will lower the profitability and growth in the future for the operators, since demand for 3G network had been proven to be on the rise while regulatory costs went down”.
Thanachart expected the industry to achieve a 22 percent profit growth in 2013 and 19 percent in 2014.
The telecom subindex was up 0.64 percent. True Corp was flat after touching a high of 5.15 baht. Total Access Communication rose 0.86 percent to 87.75 baht, while shares in Advanced Info Service was down 0.45 percent at 219 baht. (Reporting by Sinsiri Tiwutanond in Bangkok; Editing by Gopakumar Warrier)