Advanced Info Service
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Rating unaffected by likely intensified competition SINGAPORE (Standard & Poor's) Dec. 21, 2015--Standard & Poor's Ratings Services said today that its rating on Advanced Info Service Public Co. Ltd.
(AIS: A-/Stable/--; axAA/--) is not immediately affected by likely increased
competition in Thailand's telecom market, following a license auction that
AIS' competitors won. We expect AIS to invest in its third and fourth
generation (3G/4G) services over the next two to three years to maintain its
service quality and protect its strong market position.
We also expect AIS to maintain its sound financial standing over the next few
years, which should also support the rating. The company's capital expenditure
could increase because of investments in service improvement and another
spectrum. However, we believe AIS has the financial flexibility to accommodate
such spending.
Jasmine International Plc and True Corp. Public Co. Ltd. won Thailand's
auction of 4G telecom licenses for the 900 megahertz (MHz) spectrum. After the
auction, AIS stated that the bidding price had exceeded the level that they
were willing to pay. The company intends to maintain its service
competitiveness through strategic efforts, including enhanced site density and
business partnerships, while planning to bid at other upcoming 4G auctions.
Following the 4G auction, we expect intensified competition in Thailand's
mobile telecom market, where AIS has a leading market position. Jasmine, a
fixed broadband service provider, is a new entrant in the mobile business.
True Corp., the third-largest operator, is also expected to strengthen its
competitive position, given it has the most spectrum (2100MHz, 1800MHz, and
850MHz) of all the three existing players. Higher competition could lead to
stronger pricing pressure, in our view.
We have determined, based solely on the developments described herein, that no
rating actions are currently warranted. Only a rating committee may determine
a rating action and, as these developments were not viewed as material to the
ratings, neither they nor this report were reviewed by a rating committee.
