Advanced Info, Total Access Slump on Setback in Thai 4G Bid

  • Biggest mobile operators miss out on new spectrum at auction
  • Winners True and Jasmine fall on concern costs might surge

Advanced Info Service Pcl and Total Access Communication Pcl slumped, pacing a decline for Thai stocks, as the nation’s biggest mobile-phone companies failed to win licenses to provide fourth-generation wireless services at an auction last week.

Advanced Info, controlled by Singapore’s Temasek Holdings Pte, dropped 19 percent in Bangkok, its biggest decline since December 2006. Total Access slid 27 percent, the most on record. Successful bidders True Corp. Pcl and Jasmine International also retreated on concern the $4.2 billion price tag for the two licenses will force them to raise fresh capital. The SET Index fell 1.6 percent to its lowest level in almost two years.

Last week’s auction turned into a four-day bidding war as mobile operators sought spectrum that would help them tap surging demand for mobile data in the Southeast Asian nation, which has a population of 68 million and about 86 million mobile subscribers. In a similar auction a month earlier, Advanced Info and True paid a combined $2.25 billion for two 4G licenses.

“We regard this as the worst-case scenario,” Krungsri Securities wrote Monday in a note to clients. Jasmine “would need a strong partner and use pricing strategy to gain market share from other operators in the saturated mobile telecom market.”

Jasmine slumped 23 percent, its lowest close since August 2012. True, 18 percent owned by China Mobile Ltd. and controlled by Thailand’s Charoen Pokphand Group, fell 9 percent to its lowest close since June 2014. Intouch Holdings Pcl, which owns 40 percent of Advanced Info, dropped 20 percent.

True’s victory may leave the company with too much bandwidth, Ana Paepipatmongkol, an analyst at KGI Securities Thailand Pcl, said Monday in a statement. “Costs will surpass revenue in the short term and they may need to raise capital,” he said. “Jasmine, which begins from zero, will face losses for a long while from the investment in its network and brand creation.”

Mobile data usage in Thailand, which averages about 2 gigabytes per user per month, may more than double once all operators start offering 4G services, True’s Chief Executive Officer Suphachai Chearavanont said at a media briefing.

“I don’t think it’s expensive,” Suphachai said of his company’s winning bid, adding that True has no immediate plan to raise capital. “This is not clean spectrum. It is active and being used by our competitor’s customers. By getting this, it means our competitor will have less bandwidth.”

Jasmine will seek international partners for its mobile-phone operations, and also has no plan to raise capital, Chairman Pete Bodharamik said.

Customers will start moving to the new faster networks in February, and the number of 4G subscribers will reach 20 million by the end of next year, the National Broadcasting and Telecommunications Commission said last month. Thai companies began offering 3G services in mid-2013 after eight years of delays caused by legal battles and regulatory wrangling. In 2012, the regulator raised 41.6 billion baht in an auction of 3G licenses, won by Advanced Info, Total Access and True.

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