Information & Communication

Information & Communication (ICT)

 

- Good signal for 4G bid  

1800 MHz and 900 MHz 4G spectrum bid on November 11-12 has become more certain after the prime minister Prayuth Chan-ocha said that the government supported the bid and wanted it to proceed as scheduled since it would generate income for the government. For the 900 MHz spectrum issue, although TOT has right to file the lawsuit, a mutual agreement should be made to solve the problem; the NBTC accepted the proposal. It will be decided today whether TOT would be permitted to utilize total 64 MHz of 2300 MHz spectrum to provide high-speed internet (using frequency instead of installing new network lines) in addition to its current 10 MHz bandwidth used only for long-distance call service. This would be in line with the TOT's plan to seek allies, revive the organization, and reduce loss after the 900 MHz concession with the private sector ends and it stops recognizing shared income from the concession. 

- Better chance for 4G bid 

The aforementioned issues would have positive sentiment on mobile operators today. For TOT's injunction proposal on 900 MHz spectrum that will reach the conclusion on October 30, the order is less likely to be issued as the NBTC accepted the government's statement. TOT would be allowed to use 2300 MHz spectrum to generate more income; if TOT use the spectrum to provide high-speed internet, it would enjoy higher subscriber volume and lower cost as it would not have to install more network lines. In addition, TOT may be able to put the spectrum out for private companies to rent, like TRUE and CAT's 850 MHz spectrum (TRUE rents the spectrum at yearly flat rate throughout the contract period). ADVANC has the highest chance because it has worked with TOT for years, but this issue takes time to reach the conclusion. If 4G bid takes place as scheduled, ADVANC would benefit most as the only mobile operator without 4G network. With the strongest financial position, ADVANC is projected to win bid for 1800 MHz and 900 MHz spectrums, using the former to cover its weakness of not providing 4G network and the latter to enhance 2G and 3G services. 

- Top Picks: ADVANC, INTUCH 

The bid has made progress. However, as the winners have to bear higher expense on 4G network after the bid, their earnings may be revised down, so we reiterate NEUTRAL for the sector. Top picks are ADVANC(FV@B285) and its parent company INTUCH(FV@B113), which would benefit from every progress in 4G bidding.