High bids for 4G licences a boost for the economy and the IT sector
THE THAI economy and the information technology sector will benefit from the awarding of new 4G telecom licences as early as next year as the bid winners will quickly implement their investment plans, according to Supant Mongkolsuthree, chairman of Federa
Supant, who is also president of TKS Technologies, said the relatively high bidding prices that exceeded Bt35 billion per licence could, however, affect consumers in terms of service pricing.
According to a JP Morgan research, the bidding prices have far exceeded analysts’ expectation since each licence was earlier thought to cost just around Bt15 billion to Bt20 billion.
Such a huge premium for the 1800mhz spectrum would also set a high expectation on the pricing of 900Mhz spectrum auctions, which will take place next month.
The high bid prices will also have negative implications on revenues and cashflow as reflected by yesterday’s decline in the prices of Thai telecom stocks, especially those of DTAC and AIS.
Supant said the 4G auction should benefit consumers rather than result in higher service prices.
Speaking at a Thammasat Economics Association seminar, he said there is nevertheless a mechanism that will govern the pricing of voice and data services. The winners of the 1800-MHz spectrum auctions must offer 4G tariff rates lower than existing 3G service charges where the maximum 3G rates are currently less than Bt0.69 a minute for voice service and Bt0.26 per megabyte for data service.
Kirida Bhaopichitr, research director for the International Research and Advisory Service at Thailand Development Research Institute, said the National Broadcasting and Telecommunication Commission’s regulation to cap 4G tariff rates to be lower than existing 3G service charges should limit the financial burden being passed on to customers because of the high 4G prices.
“It will be hard for companies that have to pay a lot in this auction to try to increase the service charges because of the NBTC’s condition,” she said.
