AIS leads telecom shares lower amid costly auction

AIS leads telecom shares lower amid costly auction

A woman looks at the chart showing progressive bids in the 4G auction at the National Broadcasting and Telecommunications Commission on Thursday. (Photo by Pornprom Satrabhaya)
A woman looks at the chart showing progressive bids in the 4G auction at the National Broadcasting and Telecommunications Commission on Thursday. (Photo by Pornprom Satrabhaya)

Advanced Info Service Plc paced a slump in telecommunication companies on concern aggressive bidding for licences to provide fourth-generation wireless services will boost costs and raise financial risks.

Advanced Info, controlled by Singapore's Temasek Holdings Pte, slid 4.9% as of 12.37pm in Bangkok, heading for its biggest loss since July 2014. Shares of smaller peers Total Access Communication Pcl, True Corp, and Jasmine International Plc fell at least 3.6%.

The four are competing for two licences for in an auction that began Wednesday morning and hasn't produced winners after 74 rounds of bidding.

The stakes are high as a licence will give the winners an edge amid surging mobile data usage in the country of 68 million people that had about 86 million mobile subscribers as of September.

Bids for the licences climbed as high as 74.4 billion baht from starting bids totalling about 33 billion baht. The auction has revenue implications for the government, with Prime Minister Prayut Chan-o-cha last week warning companies and state agencies that they risked legal action if they tried to disrupt the auction.

"Most investors are extremely disappointed with the auction as the licence costs are far beyond their expectations," Ratch Sodsatit, Bangkok-based managing director of Asset Plus Fund Management Co, which oversees about $1 billion of assets, said by phone. "Whoever emerges as the winners, they will face a tough challenge in managing these huge licence costs."

The country's telecommunication regulator has paused the auction of 4G mobile-phone licences until after 2pm after the bidding lasted more than 24 hours without any winners.


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