Thai Mobile Operators Look to Leapfrog Malaysia With 4G Services

  • Advanced Info needs more spectrum to ease bandwidth shortage
  • Regulator says military junta has helped accelerate auction

Thailand’s biggest mobile-phone companies will break out their checkbooks later today as they begin bidding for four new licenses to provide fourth-generation mobile broadband services in the country, which outstrips all but Singapore for data-use in Southeast Asia.

The allocation of new frequencies will give Thailand a “short cut to enter the digital economy,” said Takorn Tantasith, secretary-general of the National Broadcasting and Telecommunications Commission. It will also see the country move ahead of Malaysia in terms of the quality and accessibility of mobile-phone services, he said.

Singapore, Thailand have highest mobile broadband penetration as Vietnam lags

The auction is most crucial for Advanced Info Service Pcl, in which Singapore Telecommunications Ltd. has a 23 percent stake, because its smaller rivals Total Access Communication Pcl and True Corp. Pcl have already started offering services at speeds approaching 4G using existing spectrum. A unit of Jasmine International Pcl will also bid for the licenses.

“They desperately need to win at least one license to get new frequency to serve their big base of customers,” said Piyachat Ratanasuvan, an analyst at Kasikorn Securities in Bangkok, who expects Advanced Info to win two licenses from the auction today and the one next month. “If they fail to win the license, they will be the biggest loser because they have a bandwidth shortage, while Total Access and True haven’t faced that problem.”

Advanced Info leads True, Total Access in market capitalization

Key facts about Thailand’s 4G license auction

  • The NBTC will auction two 1,800MHz licenses Wednesday
  • Two 900MHz licenses will be auctioned Dec. 15
  • Minimum for each license to start at 15.9 billion baht, with price rising by 5 percent in early bidding rounds, which may take 20 minutes each
  • Mobile Internet speeds will increase 10-fold
  • Call quality will increase and costs will fall
  • Companies to offer 4G services under new spectrum starting January
  • Government expects to net at least 73 billion baht from 2 auctions
  • NBTC estimates operators will invest 150 billion baht to expand services

The use of mobile data has surged in Thailand since companies began offering 3G services in mid-2013 after eight years of delays caused by legal battles and regulatory wrangling. Prime Minister Prayuth Chan-Ocha last week warned companies and state agencies that they risked legal action if they tried to disrupt Wednesday’s auction.

“Working under this government has some benefits,” said Takorn, referring to the junta that’s ruled Thailand since a coup in May 2014. “There are fewer obstacles. Everything works faster than under a normal government. If we held the 4G auction under the normal government, we would face protests from labor unions at every turn. Under this government, they may not be pleased with us. But they can’t come out to protest.”