Jasmine steps back from mobile
Lack of fundingelicits internal debate
Reports of JAS Mobile Broadband's great difficulties in paying off the 76-billion-baht fee for the 900-megahertz spectrum licence have been substantiated.
The subsidiary of SET-listed Jasmine International, which won a bidding war for the licence, is now sounding out authorities' reactions about "making the payment in instalments" rather than one lump-sum as stipulated in auction rules.
"The move reinforces the widespread expectation that the company has run into difficulties meeting its financial obligations," a source close to Jasmine's executives said.
The National Broadcasting and Telecommunications Commission (NBTC), however, insists JAS must pay the 76-billion-baht front-end payment for the 900MHz spectrum licence in full as stipulated by the auction rules.
"The full payment must be made by March 21," NBTC secretary-general Takorn Tantasith stressed.
JAS and True were given until March 21 to make their first payments of 8.04 billion baht each, plus three bank guarantees for the remaining amounts including an additional 25% of the spectrum value (or 4 billion baht) to be paid in 2017, a final 25% (another 4 billion) in 2018 and the remaining bid amounts in 2019.
Despite uncertainty around JAS's finances, True Corporation confirmed it would pay the full amount for its 900MHz spectrum licence by next week, in compliance with the rules.
"We won't follow JAS's lead even though this puts us in the unfair position of being the sole payer of the full amount," a high-ranking source at True Corporation said, adding that True would strictly comply with the auction rules.
True, through subsidiary True Move H Universal Communication, plans to sign a syndicated loan today worth 73 billion baht with six commercial banks -- Bangkok Bank (BBL), Krungthai Bank, Kasikornbank, Siam Commercial Bank, Kiatnakin Bank and Industrial and Commercial Bank of China (Thai).
A source close to Jasmine chief executive Pete Bodharamik said Mr Pete wanted the NBTC to confiscate the guarantee JAS placed before the auction worth 645 million baht, 5% of the reserve price, because he no longer wanted to set up a mobile business.
But his father, former commerce minister Adisai Bodharamik, wants his son to continue fighting to secure the massive funding. He believes the mobile business could complement Jasmine's fixed-line broadband internet service.
"Whether the company will set up a mobile business depends on the resolution of the between Mr Adisai and Mr Pete]," the source said.
Mr Pete could not be reached for comment Monday.
The source said the three prospective foreign partners -- Temasek Holdings of Singapore, SK Telecom of South Korea and Chungwa Telecom of Taiwan -- have all suspended partnership talks with JAS, waiting for a clear resolution on new payment terms.
A BBL source said JAS's new borrowing plan had been rejected for a second time, as the bank was not confident in JAS's ability to acquire new mobile subscribers while competing with the three major operators -- AIS, DTAC and True Move.
"We have no doubts about JAS's ability to make revenue per user per month," the source said.
"Our concerns are the company's ability to acquire customers."
An industry veteran said if the NBTC allowed JAS to pay by instalments, the company could secure a partnership and acquire loans from banks.
Mr Takorn said the regulator could face criminal charges for violating auction rules if it allowed JAS to pay by instalments after the deadline or a legal backlash from winners of 1800MHz spectrum licences claiming unfair treatment. Any relaxation of payment terms must be raised at the NBTC's telecom committee and legal panel for consideration.
Jasmine Group will face stiff penalties if it fails to make its payments including being blacklisted by the NBTC. All of its licences including for fixed broadband and digital TV will be revoked.