Following protracted negotiations, Thai market leader AIS has finally agreed to transfer more than 13,000 towers to state-owned TOT.
Although the talks frequently appeared on the verge of collapse, they now conclude an ongoing arbitration dispute with TOT relating to the 900MHz build-transfer-operate concession under which the towers were constructed. This concession expired at the end of September 2015.
The terms include allowing fellow state operator AIS to lease 2G base stations from TOT for 15 years, costing AIS THB5.6 billion ($154 million) a year for the first five years. This fee would then be reduced to TBH3.6 billion for the next 10 years of the agreement. AIS has also expressed a willingness to pay rental fees on TOT’s behalf, rather than directly to the sites’ owners as previously.
AIS’s enthusiasm is likely due to its failure to procure 900MHz spectrum at auction in December, where it was scuppered by rivals Jasmine International and True Move, although it did partner with True to obtain 15MHz of 1.8GHz spectrum for $1.1 billion in November. TOT is still considering similar network rental offers from these two rival firms.
TOT chose AIS as its mobile operating partner in October 2015, and since then has been augmenting its 2.1GHz (3G) offering. It is also looking to deploy services over its 2.3GHz spectrum with AIS’s support. Prior to this agreement however, TOT had abandoned talks with AIS over the potential formation of a tower joint venture, stating that this “might not be the best course of action” following the expiration of its 900MHz licence.
AIS had floated the idea of creating a 49:51 joint venture with TOT that would have used the latter’s 2G licence to manage towers. At this time, TOT’s acting president Monchai Noosong noted that AIS would need to transfer ownership of all towers over to TOT to the licensing terms to be met.