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Thailand may relax licence payment terms to attract bidders

Thailand could relax licence payment terms to attract bidders

In an effort to drum up greater interest in its upcoming 4G auction, Thai regulator NBTC (National Broadcasting and Telecommunications Commission) could significantly extend the payment period for winning bidders.

The regulator has lined up an auction in February 2019 in which it will attempt to sell the 1800MHz spectrum that failed to attract bidders in August this year. The terms of that auction allowed its winners three years to pay off their bids, which placed them under significant financial pressure. According to the Bangkok Post, the NBTC may increase this period to eight or ten years.

The regulator’s secretary-general Takorn Tantasith told the paper that increasing the payment period would mean operators could pay back the fee at a rate of THB1.2 billion ($36.4 million) per year - a less punitive rate that would allow them to compete better in the market.

In previous auctions, winning bidders had just 90 days to pay off half of their bid. A year after the auction closed, they would be required to pay a further 25%, and the final 25% would need to be paid by the end of the third year.

The NBTC’s acting board briefly considered granting leading operators AIS and True Move an extra five years to pay off the fees for spectrum that they acquired in late 2015 and early 2016, but scrapped this proposal. The operators each owe around THB60 billion.

Thailand’s spectrum auctions have continually been delayed or abandoned by the regulator for failing to attract enough interest from operators. August’s much-delayed 1800MHz sale saw only two of nine available 10MHz blocks being sold, with sole bidders AIS and dtac picking up their spectrum for THB12.5 billion each.

The available airwaves had formed part of a 2G concession between state-owned CAT Telecom and dtac which expired on 15th September. The remaining 70MHz will be made available as seven 10MHz blocks, each retaining the August auction’s reserve price of THB12.48 billion.

Reserve prices have been something of an issue in Thailand’s auctions, with Takorn noting that 5G spectrum must “have a reasonable starting price to avoid creating untenable financial burdens for operators.”

AIS and True Move have declined to participate in a 900MHz spectrum auctions scheduled for 8th November on the grounds that their current holdings are sufficient. Dtac will therefore be the only bidder.

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