JAS fined B200m for default

JAS fined B200m for default

NBTC acts over failure to pay 4G licence fee

Flashback: Pete Bodharamik, CEO of Jasmine International, is watched by members of the National Broadcasting and Telecommunications Commission (NBTC) as he draws credentials for his bidding war for a 4G licence - which his firm proved unable to pay for. (Photo by Pornprom Satrabhaya)
Flashback: Pete Bodharamik, CEO of Jasmine International, is watched by members of the National Broadcasting and Telecommunications Commission (NBTC) as he draws credentials for his bidding war for a 4G licence - which his firm proved unable to pay for. (Photo by Pornprom Satrabhaya)

JAS Mobile Broadband must pay a fine of almost 200 million baht to the national telecom regulator by June 16 for its failure to pay the first instalment of its 900-megahertz licence fee.

The National Broadcasting and Telecommunications Commission (NBTC) confiscated JAS's 645-million-baht guarantee on March 21 -- the deadline for JAS to make its first payment of 8.04 billion baht and provide bank guarantees for the rest of its winning bid of 75.65 billion baht.

JAS has the right to file an appeal with the Civil Court if it disagrees with the decision.

However, operating licences of parent firm Jasmine International, including those for fixed broadband and digital TV, will not be revoked.

The resolution on JAS's penalties was reached by the NBTC's telecom committee Wednesday.

NBTC secretary-general Takorn Tantasith said the regulator has no authority to revoke Jasmine's operating licences as it could violate telecom laws and regulations.

He said the fine was calculated based on three elements: compensation for operating expenses incurred during the auction in December, the cost of the re-auction on May 27, and interest starting from JAS's default on March 21.

The interest of 169 million baht was based on an interest rate of 7.5% for JAS's first instalment of 8.04 billion baht from March 21 until June 30, the date Advanced Info Service Plc (AIS) is required to make its first payment for the 900MHz spectrum after the re-auction on May 27.

Another fine of 10 million baht was calculated from operating expenses for the re-auction, plus 20.24 million baht for December's auction.

Mr Takorn said JAS would not have to pay for any difference in bidding because AIS, through subsidiary Advanced Wireless Network, took over the licence at JAS's winning price of 75.65 billion baht.

However, he said any possible damage from 4G service delay due to JAS's payment failure had not been determined.

In another development, S&P Global Ratings said it had lowered its long-term corporate credit rating for AIS to BBB+ from A-. It also lowered its long-term Asean regional scale rating for AIS to axA+ from axAA. The mobile operator's outlook is negative.

"We lowered the ratings because we believe AIS's tolerance for leverage has increased," said S&P Global Ratings credit analyst Wei Kiat Ng.

"AIS's capital structure has weakened markedly given the debt-funded substantial payment that the company has committed to make to secure the 900MHz spectrum licence."

AIS also won an 1800MHz licence with a bid of 40.9 billion baht at an auction held last November.

Payments for the licences will be made until 2020 and committed bank guarantees will probably offset any material negative impact on the company's liquidity position, S&P said.

S&P expects AIS's pro-forma adjusted leverage, as measured by a ratio of debt to earnings before interest, tax, depreciation and amortisation (Ebitda) to increase to 2.7 times this year from 1.2 times on Dec 31, 2015.

The company's debt-to-Ebitda ratio has been below 1.0 in recent years.


Do you like the content of this article?
COMMENT (1)

Vietnam to produce more Sputnik V vaccine in deal with Russia

MOSCOW: Russia and Vietnam have agreed to expand production of Russia's Sputnik V COVID-19 vaccine in Vietnam, Russian sovereign wealth fund RDIF, which markets the vaccine internationally, said on Wednesday.

23:00

Protesters flock to US Supreme Court ahead of pivotal abortion case

WASHINGTON: Hundreds of demonstrators gathered outside the US Supreme Court on Wednesday as the nine justices heard arguments in a pivotal case that could roll back 50 years of abortion rights in the country.

22:45

PDRC rallies haunt Thai-born K-pop star Sitala

Sitala Wongkrachang, a daughter of late actor and director-turned activist Saranyu, has decided to release her first girl-group album in South Korea.

20:31