Fitch Ratings has said the upcoming third-generation (3G) spectrum auction on the 2.1-gigahertz band is unlikely to have a negative effect on the credit ratings of Thai mobile operators.
Fitch rates Advanced Info Service BBB+ and AA(tha) with a stable outlook and Total Access Communication BBB- and A+(tha) with a stable outlook."The high licence fee and additional investment costs for the 3G network will lead to an increase in net debt and financial leverage for the major mobile operators over the next three years, but Fitch believes that these companies' solid cash flow generation and large rating headroom should help them absorb the effect of any significant negative free cash flow," it said in a report last week.
The report also said the spectrum allocation should boost private operators' network capacity and support the rapid growth in mobile data traffic in the medium term.
Fitch expects non-voice revenue of the Thai mobile sector will continue to grow within a range of 30-35% annually over the next two years.