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Dtac most likely candidate for TOT 4G win, says Fitch

Fitch Ratings has pegged Thailand’s number two operator dtac as the most likely to have its proposal accepted for state operator TOT’s 4G public-private partnership contract.

Since winning the contract would provide dtac with a much-needed boost to its spectrum holding, it has the greatest incentive of the Thailand’s three participating private mobile operators to court TOT with attractive terms, according to Fitch.

Private operators had until the end of March to submit their proposals for TOT’s 2.3GHz spectrum, with the state operator opening the process in February. Dtac reportedly held talks with TOT in February about offering services over the 2.3GHz band. The winning proposal is expected to be announced in May.

However, even if dtac’s proposal is accepted, it will still need more spectrum within the next two years as its mobile operations ramp up. The operator currently has a total holding of only 50MHz of spectrum, and will lose 35MHz of this in 2018 as its 2G concession is due to expire. It holds 15MHz of 2.1Ghz spectrum but it is doubtful that this relatively small holding will help it cope with upgraded technology and increasing traffic in the medium term.

Dtac’s market share fell 4% to 26% across the past two years, with Fitch identifying the operator’s relatively low spectrum holding as the likely cause of this drop. In order to boost its network quality and claw back its market share and service revenue, Fitch stated that dtac would need to invest more in its network and acquire more spectrum – even if it wins the state 4G network contract – in the upcoming 1.8GHz and 850MHz spectrum auctions, which are anticipated next year.

Thailand’s regulator NBTC recently resolved an ongoing issue surrounding public-private partnerships in the country, and this has given TOT the green light to begin providing a 4G offering with a private operator partner. 

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