Advanced Info Service (AIS) has finally re-secured the 900-megahertz spectrum licence it briefly lost to JAS Mobile Broadband in the last failed auction, returning the crucial spectrum to its portfolio.
As expected, AIS was the sole bidder in the re-auction yesterday. It was declared the winner by the National Broadcasting and Telecommunications Commission (NBTC) by bidding the same price of 75.654 billion baht that JAS offered, though the latter defaulted on the licence payment by the March 21 deadline.
AIS is paying less than its last bid in the previous auction of 75.976 billion baht.
AIS spearheads expansion
"It turns out our licence bidding strategy paid off as we got the licence at a reasonable price," said Somchai Lertsuthivong, chief executive of AIS.
AIS will pay combined licence costs for its three mobile spectra -- the 2100-, 1800- and 900MHz bands -- of only 8 billion baht per year. It previously paid a concession of 20 billion baht to owner TOT Plc for the right to provide 2G service on the 900MHz band.
AIS, through its subsidiary Advanced Wireless Network (AWN), has allocated 10 billion baht to roll out 3G and 4G networks on the 900MHz spectrum this year, part of the company's 2016 budget of 40 billion.
"We expect our 4G network coverage to reach 80% of the population this year, up from our initial estimate of 50%," said Hui Weng Cheong, chief operating officer of AIS.
Mr Somchai said that with the combined 40MHz of bandwidth in its spectrum portfolio thanks to the 10MHz on the 900MHz spectrum, AIS has the capacity to strengthen its market lead through a commitment to providing high-quality networks, applications and mobile services.
He said AIS decided to enter the auction because the reserve price was lower than its last bid. The company wants to capitalise on the red-hot Internet of Things (IoT) technology, which is set to transform the telecom industry over the next five years, said Mr Somchai.
Auction fee payment
AWN must make its first payment of 8.04 billion baht by Aug 24 along with three bank guarantees for the remaining 72.346 billion.
NBTC secretary-general Takorn Tantasith believes AWN will have to make its payment before June 30 or the company's existing 250,000 2G customers on the 900MHz spectrum will see their network cut off.
AIS's 2G users received protection to continue using their existing mobile network until June 30 via the prime minister's special powers.
Prime Minister Prayut Chan-o-cha invoked Section 44 of the interim charter to order the re-auction of the 900MHz spectrum licence on May 27.
He also ordered the validity of existing 900MHz spectrum licences to last until a new licence is issued to a new winning bidder. The NBTC has been ordered to extend the deadline for the network shutdown of the expired licence held by AIS until June 30.
4G tariff ceiling
Mr Takorn insisted both AIS and True Move must keep their 4G service charges below 69 satang a minute for voice service and below 26 satang per megabyte for data.
All calls must also be charged on a per-second basis.
JAS's penalty
The NBTC's telecom committee will conclude how much JAS must pay in penalties by June 1.
The issue was raised as an urgent matter at the NBTC's board meeting, said Mr Takorn.
Future spectrum benchmark
The regulator will determine the average auction price for future wireless spectrum auctions based on the recent bids for the 1800- and 900MHz spectra last year.
The average price will be based on per-megahertz rates along with the country's inflation rate plus the consumer price index, he said.
The reserve price for upcoming auctions will not be lower than the rates for the 1800- and 900MHz bands, said Mr Takorn.
The NBTC's 11 commissioners will have to step down from their positions by Oct 7, 2016, he said.
New commissioners will take over responsibilities for upcoming auctions, including the 2600MHz spectrum controlled by MCOT Plc and the 1800MHz operated by Total Access Communication (DTAC) that is due to expire in September 2018.