Information & Communication Technology

Information & Communication Technology (ICT)

- 1800-MHz, 900-MHz networks licenses delayed
According to Thakorn Tanthasit, the secretary-general of NBTC, NCPO ordered
NBTC to suspend four projects for transparency proves: 1) the auction for
1800-MHz network licenses scheduled in late-2014; 2) the auction for 900-MHz
network licenses scheduled in late-2014; 3) basic telecommunications
development projects; and, 4) subsidy vouchers for digital TV set-top boxes.
- ADVANC affected most
The auction has been delayed indefinitely. The delay is expected to affect
ADVANC most. Its 900-MHz 2G network and 2100-MHz 3G network have
reached their capacity of 42 million subscribers, so 2100-MHz network cannot
grant 4G network like TRUE and DTAC with nearly 40% fewer subscribers than
ADVANC. Thus, ADVANC needs 1800-MHz network to provide 4G network.
Moreover, as a result of delayed auction for 900-MHz network license, ADVANC
has to migrate its 2G network subscribers (38% of total subscribers) before the
concession expires on September 15, 2015, so expenses on 3G network would
be higher than expected. Meanwhile, other two companies would be affected
least. TRUE is currently providing 1800-MHz 2G network, 850-MHz 3G network,
and 2100-MHz 4G network. 1800-MHz network license expires on September
15, 2014, so TRUE needs a new 1800-MHz network license for 3.2 million 2G
network subscribers who have not been migrated to 3G network. However,
most of these subscribers are inactive. NBTC will discuss remedy measure for
TRUE. DTAC is likely to face the least impact. It is currently providing 1800-
MHz 2G network, 850-MHz 3G network, and 2100-MHz 4G network. As 1800-
MHz and 850-MHz networks licenses expire in the next four years, DTAC has no
problem on migrating 2G subscribers.
- Avoid ADVANC, speculate on DTAC
We maintain our earnings forecasts and fair values; added value from 1800-
MHz network and 900-MHz network licenses has not been included in our
forecast from the start. We recommend staying away from ADVANC(FV@B270)
and INTUCH(FV@B109) because they are likely to be affected severely. This is
a good entry point to speculate on DTAC(FV@B122); it would be affected least,
and the share price has dropped and showed upside. We recommend BUY for
TRUE; its fair value (before XR) is B10.7, implying upside. TRUE is a
turnaround stock that would get a limited impact.