By THE NATION
THE AUCTION of two telecom licences on the 900-megahertz spectrum this month saw a record-high bid of Bt151.952 billion, versus that of last month’s auction of two 1,800MHz licences, where the top bid was Bt80.778 billion.
It took 65 hours and 55 minutes or 198 rounds before the 900MHz licence auction ended after starting at 9am on December 15 (this duration excluded a break from 6am to 9am and a break from 9pm to 00am of each day).
The intense competition at the auction reflected the high demand for bandwidth by the four bidders, Advanced Info Service (AIS), Total Access Communication (DTAC), True Corp, and Jasmine Inter-national. To everyone’s surprise, the No 1 and No 2 market leaders, AIS and DTAC, failed to grab the 900MHz licences, while the victors were newcomer JAS and the No 3 market leader True, which bid Bt75.654 billion and Bt76.298 billion respectively.
AIS and True each won licences at the 1,800MHz auction by bidding Bt39.792 billion and Bt40.986 billion respectively. The 1,800MHz auction started at 10am on November 11 and took 86 rounds to end at 7.05pm on November 12.
Aviation safety woes
Thailand was shocked when |the International Civil Aviation Organisation (ICAO) expressed concerns on the country’s aviation-safety standards.
The concerns led some countries such as Japan and South Korea to put a brake on Thai airlines’ new routes and chartered flights from Thailand. Thai AirAsia X and NokScoot were forced to halt their plans for new operations in those countries.
In June, the ICAO raised a red flag as the standards were not improved. Thai aviation authorities were in a rush to overhaul the regulatory system, with focus placed on the Civil Aviation Department and outdated regulations. Experts were hired to re-certify all 41 airlines registered in Thailand, to ensure they meet international standards.
The efforts failed to impress the US Federal Aviation Administration. It downgraded Thailand this month, in effect banning new routes.
The good news was that the European Aviation Safety Agency did not follow suit: Thai airlines can maintain flights to European skies.
The excitement will stay until August when the government will finish the aviation-safety overhaul.
Stock market on roller coaster
Stock investors were forced to take a roller-coaster ride this year.
The Stock Exchange of Thailand began the year spectacularly. The SET Index peaked at 1,615.89 points on February 2, an increase by 8 per cent from last year’s closing. But months later the ride got rough. The index touched a two-year low this month of 1,261.66 points, plunging by 15.8 per cent from last year’s close.
Influencing this is mostly external factors, ranging from the increase in the United States policy interest rate, China’s economic slowdown and the fragile recovery in Europe. As the domestic economy was weak, foreign investors packed their bags, selling Thai shares by more than Bt150 billion net this year. The outlook for next year remains shaky.
The financial collapse of Sahaviriya Steel Industries’ upstream steel plant in Britain brought shocks to the banking sector.
The SSI group’s Bt50-billion debt entered a restructuring process, boosting the non-performing loans of three banks – Siam Commercial Bank (SCB), Krungthai Bank (KTB) and Tisco Bank. The banking industry’s overall NPL rate jumped in the third quarter because of the SSI case, from 2.38 per cent of outstanding loans in the second quarter to 2.78 per cent. SCB had to set aside Bt11 billion against loans to SSI, KTB Bt6 billion, and Tisco Bt2.16 billion.
The incident also raised fears of possible debacles at other large corporations, just as Thai banks witnessed trouble from small corporate and individual clients.
Threats over IUU standards
Thailand’s fishing industry suffered dearly after the European Union issued a yellow card on illegal, unreported and unregulated (IUU) fishing after reports of slave labour in the industry.
The yellow card forced the government and seafood companies to ramp up their efforts to clean up the mess. It will be known next year if the actions are satisfactory. If not, Thailand’s seafood will be banned by the EU. Thailand’s global seafood exports generate about Bt300 billion a year, with about 10 per cent of shipments destined for Europe.
The ban would be a further blow to Thailand’s exports, which have contracted for three years in a row. The overall outlook is not bright, as export markets remain fragile. Orders from 12 economies joining the Trans-Pacific Partnership, including the United States, which consumes about 10 per cent of Thailand’s exports, could also be cut.
Japan joins Dawei project
The anticipation was high that Japan would get involved with the development of the Dawei Special Economic Zone after Italian-Thai Development ceased its concession late in 2013. But that only came true this year, allowing Myanmar and Thailand to dream about success in strengthening their regional linkage.
A memorandum of understanding was signed to allow Japan to take over one-third of a special purpose vehicle.
The full-scale Dawei SEZ will feature a 196-square-kilometre industrial estate, a four-lane road, a railway, large power plants and a deep-sea port. Located at the western end of Asean’s East-West Economic Corridor, Dawei SEZ |is expected to win |new investment for Myanmar and extend Thailand’s logistics network to the west.
Hopes are high now that the construction work will resume next year.
Digital TV sees first victim
Hopes were high when digital-TV licences were awarded in 2014. Broadcasting companies and non-broadcasters jumped in, with anticipation of becoming No 1. Luring them was huge advertising money, about Bt60 billion per annum, which was previous shared by only five TV channels.
But exactly a year later, fierce competition claimed the first victim.
Led by celebrity gossip guru Pantipa Sakulchai, commonly known as “Sister Tim TV Pool”, Thai TV Co, operator of the Thai TV digital news channel and MVTV Family channel, decided to give up its ambition to become the No 1 broadcaster in Thailand. The two channels have been suspended while the operator enters a legal fight with the regulator.
It refused to pay the remaining instalments of its upfront licence fees and annual fees, claiming that its poor income was the fault of the regulator’s handling of the transition from analog to digital broadcasting.
It is uncertain if Thai TV will be the last victim. In an industry with 24 commercial channels now, even a big player like BEC World has to work hard to maintain its position.
CTH made headlines when it won the Barclays Premier League (BPL) contract three years ago. From scratch, it built up an empire that is now the country’s second-largest pay-TV operator after TrueVisions.
BPL was the flagship content for CTH, which is owned by big-time investor Wichai Thongtang. But the hefty fee of US$300 million (Bt10.8 billion) put the company in financial trouble. Last year, it showed a net loss of Bt4.45 billion, and further losses are expected this year.
As a second blow, the company failed to extend the contract, leading to questions of how the company will fare and what will happen with its 3 million subscribers.
Long-awaited inheritance tax
Thailand’s first inheritance-tax law was endorsecd after years of talks on reaping more taxes from wealthy families’ heirs. Thailand is the third country in Asean to enact such a law, after Philippines and Vietnam.
To be effective on February 1, the law stipulates that the deceased’s descendants are subject to a 5-per-cent tax if the inheritance is valued above Bt100 million. The tax rate is 10 per cent for non-descendant beneficiaries. All eyes are on how the law might raise Thailand’s tax revenue, which is only about 17 per cent of gross domestic product.