* AIS up 2.4 pct, True up 4.4 pct despite earnings downgrade
* TAC lower 5 pct, Jasmine down 4.6 pct
* Citigroup cuts target prices, UBS underweight on sector (Adds analysts, company comments)
By Khettiya Jittapong
BANGKOK, Nov 13 (Reuters) - Shares of Thailand’s leading mobile operators Advanced Info Service Pcl (AIS) and True Corp rebounded on Friday from a two-day decline after they won 4G mobile licences valued at $2.26 billion in a marathon auction.
The new 4G spectrum will allow the winners to secure network capacity for 18 years and tap robust demand for mobile data services in a saturated market, where mobile phone penetration is more than 140 percent, analysts said.
Shares in second-ranked Total Access Communication and broadband operator Jasmine International, which had also taken part in the auction, plunged after they lost in the bidding on Thursday.
Market leader AIS, 23 percent owned by Singapore Telecommunications Ltd, is the only major Thai operator that does not offer 4G services because it has limited bandwidth capacity.
“Winning the 1800MHz licence will help reduce risk of losing market share for AIS and boost long-term growth prospects,” Supachai Wattanavitheskul, analyst at Maybank Kim Eng Securities, said in a note.
Third-ranked True Corp, 18 percent owned by China Mobile , and controlled by billionaire Dhanin Chearavanont’s Charoen Pokphand Group, may take market share from TAC, said Supachai.
But the winnings companies’ earnings growth would be affected by the high costs of the licence, he added.
Many analysts, including Citigroup, cut target prices and earnings growth forecasts for Thai telecoms companies after the auction. The higher-than-expected cost of the licences could affect their profitability and dividend payout ratio, they said.
The balance sheet of the winners would be weaker after the auction, UBS said, maintaining an “underweight” position on the Thai telecoms sector with a “sell” on AIS and True but a “buy” on TAC.
At 0500 GMT, AIS shares were up 2.37 percent after hitting a 14-month low on Thursday, while True shares rose 4.35 percent, recovering from a two-and-a-half month low.
TAC fell 5 percent in a third consecutive day of losses and Jasmine dropped 4.6 percent. The overall Thai market index was down 0.17 percent.
TAC said in a statement it has sufficient spectrum to provide 4G services despite not winning 1800MHz spectrum auction and is on track to achieve a target of 2.5 million 4G subscribers by the end of 2015.
TAC has rolled out 4G services on 1800MHz spectrum under a concession agreement with state-owned CAT Telecom. The company now has three spectra, more than other operators.
Thailand’s telecom regulators will hold another 4G spectrum auction on Dec. 15. ($1 = 35.8100 baht) (Reporting by Khettiya Jittapong; Editing by Simon Webb and Subhranshu Sahu)