Bidders seen likely to favour two bands in upcoming auctions
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Bidders seen likely to favour two bands in upcoming auctions

The 2100-megahertz and 2300MHz bands are expected to attract more prospective bidders than the 850MHz band when the three are put up for auction, according to a stock analyst.

State enterprise National Telecom (NT) currently uses the three bands through partnerships with private telecom operators.

The National Broadcasting and Telecommunications Commission (NBTC) is expected to reallocate them via auction before they expire in September 2025.

Among the three bands, 850MHz is deemed the least attractive because, from a technical perspective, it must be refarmed for optimisation before it can be utilised, said Pisut Ngamvijitvong, senior equity research analyst at Kasikorn Securities (KS).

Refarming refers to transitioning a specific frequency band from one technology to an other.

In addition, the major mobile operators already have enough low-band spectra bandwidth in their portfolios such as 700MHz to serve 5G coverage nationwide, said Mr Pisut.

These three bands of NT are key factors in creating ambiguity in terms of the mobile phone operators’ performance next year, he said.

If the licence auctions for these bands end with winning bidders paying hefty prices, this would affect the telcos' performance again, he added.

In contrast, if the auctions end with low winning prices, this represents a good sign with regard to the telecom operators' future capital expenditure.

Mr Pisut said KS is reviewing its analysis of the mobile phone operators' performance related to the planned auction of the three spectrum ranges.

The telecom regulator plans to auction the bands prior to their expiry dates, but has not yet announced official details concerning the auction timeline.

NT is the merged entity of TOT and CAT Telecom.

Through a deal with TOT, NT once partnered Advanced Info Service (AIS) on TOT’s 2100MHz service offering.

NT also partnered with Total Access Communication (DTAC) on TOT’s 2300MHz.

Through deals with CAT in the past, NT partnered with True Move H Universal Communication (TUC) on CAT’s 850MHz.

The full merger of True and DTAC, which became True Corporation, took place in March 2023.

After 2025 NT will operate via some of the spectrum range it won in a licence auction held in February 2020, such as 700MHz and 26GHz.

The spectrum partnership deals with private telecom operators generate combined revenue of 40 billion baht per year to NT, according to NT.

Mr Pisut said through its partnership deal with NT, AIS generates profit margin to NT of around 3.9 billion baht per year while True Corp (through True-DTAC deals with NT) generates profit to NT of 7.5 billion baht per year.

Mr Pisut said KS believes the winning bid prices at the planned auction would not be high. 

All the auctions in Thailand for 3G, 4G and 5G spectrum licences combined generated 500 billion baht during the period 2012 to 2020.

The major telcos have invested heavily in their 5G network installation and coverage over the past few years.

However, their investment in 5G capacity at present is significantly lower than the past, in line with saturation of new individual 5G users in the mass market.

“I believe the upcoming auctions are a positive sign for telecom capital expenditure in future,” Mr Pisut said.

He said it is impossible for the winning bids at the auctions, especially for the 2100MHz and 2300MHz bands, to be higher than the profit AIS and True generate for NT annually, based on the valid term of the licences (12 or 15 years).

Mr Pisut said AIS generates profit to NT of around 3.9 billion baht per year or 58.5 billion over 15 years and True generates profit to NT of 7.5 billion baht per year or 112 billion over 15 years. He added that it would be unlikely to see such high prices being paid in the upcoming auctions. 

Telecom regulator NBTC has vowed to prepare reasonable conditions for the upcoming auctions. 

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