Second-largest mobile operator True Move H says it will not join the planned 1800-megahertz auction on Aug 4 after concluding it has sufficient bandwidth on a variety spectra to provide services.
Moreover, the reserve price of 37.45 billion baht per licence, based on the winning price of the 2015 auction, would create an excessive financial burden after the participants bid up the price, the company said yesterday in a release.
According to the telecom regulator, a key factor in True Move H declining to join the bid is its existing financial burden from licence payments for the previous 1800MHz and 900MHz auctions in 2015.
The coming auction of 1800MHz licences requires that each prospective bidder place 1.87 billion baht (5% of the reserve price) as a bid guarantee on June 15, the submission date for bidding documents, plus 5.61 billion baht reserved for a fine in the event that a winning bidder defaults on a licence payment.
Takorn Tantasith, secretary-general of the National Broadcasting and Telecommunications Commission (NBTC), said he acknowledged True Move H's announcement and felt disappointed.
"The submitting date of bid documents on June 15 may be too tight for True Move to secure its sources of capital, including bank guarantees, on time," Mr Takorn said.
In 2015, the NBTC auctioned off two licences on the 1800MHz spectrum, each containing 30MHz of bandwidth for download and upload. True Move won the first licence at a winning price of 39.79 billion baht, and Advanced Info Service (AIS), Thailand's biggest mobile operator, won the second at 40.9 billion baht.
The NBTC also auctioned off two licences on the 900MHz spectrum in December 2015. AIS won a 900MHz licence at 75.65 billion baht, while True Move won one at 76.29 billion baht.
Each company already made licence payments of 8.04 billion and 4.02 billion baht in 2016 and 2017, respectively.
AIS and True Move each must make the third licence payment of 4.02 billion baht in 2018. For the last payment in 2019, AIS and True Move must pay 59.5 billion and 60.2 billion baht, respectively.
AIS and True Move jointly asked the government late last year to invoke Section 44 powers and allow an extension on their final payment term. That request remains up in the air.
"The NBTC respects the decision of a private company," Mr Takorn said, though he added that the move will inevitably create disadvantages in the form of reduced digital service opportunities for customers.
Each telecom must hold at least 200MHz of bandwidth to ensure bandwidth capacity for providing digital services, especially 5G wireless broadband.
The current combined bandwidth from a variety of spectra already allocated and operated by telecoms will be insufficient for 5G services.
Mr Takorn said the NBTC will move ahead with the planned auction of 1800MHz licences scheduled for August.
AIS chief executive Somchai Lertsutiwong said his company is studying the details of the auction conditions and will make a final decision based on the executive committee's recommendation.