True forgoes 900MHz auction

True forgoes 900MHz auction

Finance chief cites sufficient bandwidth

ICT Minister Uttama Savanayana and telecom officials are seen at last December's partly failed auction of the 900-megahertz spectrum. True Move now has opted out of next week's May 27 re-auction because it already has enough bandwidth, meaning AIS will be the lone bidder. (Photo by Chanat Katanyu)
ICT Minister Uttama Savanayana and telecom officials are seen at last December's partly failed auction of the 900-megahertz spectrum. True Move now has opted out of next week's May 27 re-auction because it already has enough bandwidth, meaning AIS will be the lone bidder. (Photo by Chanat Katanyu)

True Move officially announced Tuesday that it will not enter the new auction round for the 900-megahertz spectrum next week, saying it would rather "promote a free and fair competitive environment" in the mobile industry.

The country's third-largest mobile operator insisted the company already has sufficient bandwidth to provide efficient wireless broadband service in the years ahead.

"After a board meeting on Monday chaired by Dhanin Chearavanont, the True board finally resolved not to participate in the May 27 re-auction of the 900MHz spectrum," said Noppadol Dej-Udom, chief financial officer of True Corporation.

He said True Move has the most comprehensive spectrum portfolio, both low and high frequencies, including slots on the 900MHz, 1800MHz, 2100MHz and 850MHz bands (the last of which is under a contract with the previous concession owner, CAT Telecom).

"With our combined 55MHz of bandwidth, we can efficiently provide optimum mobile coverage and services nationwide for the next 3-5 years," Mr Noppadol said.

In addition, True Move says its wants to promote competition in Thailand's mobile industry to ensure benefits for consumers.

Mr Noppadol said Thailand's mobile data traffic had more than doubled in the past few years, largely driven by the rise of the so-called always-connected consumer due to changing consumer behaviour.

Mobile data traffic is expected to almost double this year alone following the full commercial launches of fourth generation (4G) wireless broadband services by the three major mobile operators.

A True Move 3G customer uses an average of 2.5 gigabytes per second per month, while its 4G subscribers use an average of 4Gbps a month.

Mr Noppadol said True Move actually has the financial capability to finance the second slot of the 900MHz spectrum licence, which will be auctioned next week, due to the flexible payment terms of the licence.

Regulators eased the payment terms for the 900MHz auction from what was required in the 1800MHz bidding in November.

In the 1800MHz auction, each winner was required to pay half of the price it had offered within 90 days and 25% in both the second and third year.

But winners of the 900MHz bidding are required to pay only 8.04 billion baht or 50% of the reserve price in the first 90 days and 25% in both the second and third years. The remaining sum -- the amount above the reserve price -- will be paid in the fourth year.

"With our Ebitda [earnings before interest, tax, depreciation and amortisation] capability of 20 billion baht annually, we could afford another 900MHz licence without financial problems," Mr Noppadol said.

But he said Mr Dhanin, the True chairman, had told the board at Monday's meeting that he did not want to use money in a way that would limit opportunities for industry development and create less value for consumers.

True also wants to reduce the financial exposure of its mobile business.

Mr Noppadol said True has around 90 billion baht in debt as of March 31, 2016. The company expects to complete its recapitalisation of another 60 billion baht by next month.

The company plans to use 50 billion baht of the proceeds from the recapitalisation to repay debts and the rest for business expansion.

True's debt will stand at 40 billion baht by year-end, said Mr Noppadol.

Advanced Info Service, through subsidiary Advanced Wireless Network, and True Move, through True Move H Universal Communication, were the only two mobile companies picking up bidding documents for the 900MHz spectrum auction from the National Broadcasting and Telecommunications Commission (NBTC).

The regulator has allowed potential bidders to pick up bidding documents from April 12 until May 17.

Prospective bidders must submit documents to the NBTC by today.

Takorn Tantasith, secretary-general of the NBTC, said AIS expects to inform the Stock Exchange of Thailand today that it will enter the 900MHz auction.

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