3G sends stocks 52% higher

Thai telecom shares are trading 52.5% higher on average this year thanks to the successful issue of third-generation (3G) licences on the international standard frequency, says Kiatnakin Securities.

Analyst Mintra Ratayapas said stock prices of all 27 telecommunications firms have enjoyed solid gains of almost 53% compared with only 8% last year.

Shares of True Corporation saw an increase of 57%, followed by Advanced Info Service (AIS) at 47% and Total Access Communication (DTAC) at 30%.

Shares of both AIS and DTAC soared 65% last year, while True stocks fell 57%.

Shares of Jasmine International have surged 150% this year, followed by Samart Telcom (70%), Loxley (65%) and Advanced Information Technology (20%).

Ms Mintra said the sharp increase is based on the fact that mobile operators will enjoy lower costs in operating 3G services, paying only 7% of annual revenue as a licence fee compared with 25-30% under the concession system.

Medium-sized stocks of telecoms providing network integration services will enjoy positive growth in the first half of next year, boosted by deployment of the 3G network, she said.

"The telecom sector looks set for attractive trading next year with the advent of the imminent 3G mobile broadband service," said Ms Mintra.

But she said earnings per share of telecommunications firms will remain stable or decline, as mobile operators must spend large amounts on 3G network expansion.

The Thai Chamber of Commerce forecasts the telecommunications industry will rank second among sunrise businesses next year, behind only the medical and beauty sector. It ranks sixth place this year.

The Kasikorn Research Center believes full commercial 3G service will stimulate the Thai mobile industry to a market value of 215 billion baht next year, with wireless data services making up 32.5% of the total.

The 27-stock information and communication technology sector (ICT) index shed 1.30% on Friday to close at 178.07, in trade worth 2.86 billion baht.

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Writer: Suchit Leesa-nguansuk
Position: Senior Reporter