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Thai spectrum auctions set high reserve prices - again

Thai spectrum auctions set high reserve prices - again

Thailand’s upcoming auction of 850MHz and 1.8GHz spectrum will see four blocks made available at similar reserve prices to its last auction in 2015.

During the last auctions, analysts expressed concern that the regulator NBTC (National Broadcasting and Telecommunications Commission) had set reserve prices notably higher than the international average. Bidding hit record highs during the two rounds of auctions, with the government raising THB233 billion, adjusting for GDP on a per capita basis.

The latest auctions will see a 10MHz block of 850MHz spectrum priced at THB37.98 billion ($1.14 billion), while a 30MHz block in the 1.8GHz band will have a reserve price of THB37.45 billion. Three 30MHz blocks will be sold in the 1.8GHz band.

In September, the NBTC announced that it was aiming to hold the auctions in January 2018 - three months ahead of its original schedule - to prevent any interruption of services following the expiration of two concessions held by Dtac with state-owned CAT Telecom. Third-placed Dtac operates 10MHz on the 850MHz band and 45MHz on the 1.8GHz band via these concessions, which expire in September 2018.

However, this plan has reportedly now changed, with NBTC secretary general Takorn Tantasith saying that auctions will be held by May 2018 following the publication of draft details in January. This will mean that the licences are awarded by June, so Dtac customers will have time to transfer to another network.

In addition, NBTC has increased the required bid guarantee to THB1.87 – nearly three times the previous amount. This is to prevent a similar situation to early 2016 when Jas International won its bid but defaulted on its licence payment and was forced to surrender both its licence and its THB645 million guarantee. The licence was obtained by market leader AIS upon being resold.

In Thailand’s last auctions, AIS spent THB75.56 billion for airwaves in the 900MHz band and THB41 billion on 1.8GHz spectrum, while True paid THB39.8 billion for a 15MHz block in the 1.8GHz band and THB76.3 billion for a 10MHz block of 900MHz spectrum.

These bids for 900MHz were almost six times higher than the reserve price of THB12.8 billion, with True and Jasmine’s bids of over $2 billion for 10MHz of 900MHz spectrum constituting a world record per megahertz for low-band. 

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