Yesterday Bangkok Post reported that Thailand’s largest mobile operator, Advanced Information Services, AIS, had agreed to participate in the re-auction of a single license of 10 MHz bandwidth in the 900 MHz spectrum. This is the license that JAS Mobile won in the auction last December and then forfeited by not making the first payment in March. The article says that AIS’ auction participation was “in exchange for an extension of the right to retain [AIS’] existing 400,000-strong 2G customer base”. This quid pro quo intrigued me, so let’s draft a business case together to understand the money. Continue reading “AIS will Participate in Thai Re-Auction”
After weeks of relative quiet in the #Thai4G Spectrum story today there is interesting news. Joseph Waring at Mobile World Live gives the details.
Essentially, here is the recap:
- The spectrum won by by Jas Mobile in the NBTC 900 MHz auction last December, then forfeited for non-payment, will be re-auctioned by order of the Thai Prime Minister’s Digital Economy Commission.
- JAS Mobile has been barred from participating, though they have ben given the privilege of paying the costs of the re-auction. Not much word from JAS since this transpired.
- Thai Operator Dtac has said they are not interested to participate, probably hoping to acquire spectrum at more sensible prices in a couple years. Maybe by then the Thai government will have published a spectrum roadmap.
- True Move has only recently declined to participate in the auction. After paying THB75Billion for another license this seems the smarter play. Doubling down on a second license would saddle True with tremendous debt. And this is serious debt relative to any normal Mobile industry metric.
- One such metric is the cost per MHz-POP, in other words, how much did the license cost relative to the amount of a spectrum and the number of possible subscribers?
- The price True paid for the other license is comparable to some of the higher western rates, around USD1.6/MHz-POP. But in Western countries there is another metric, ARPU, or Average monthly Revenue pre Subscriber, which is near USD40 and sometimes higher. Here in Thailand ARPU is closer to USD6. Another way to look at that is that True’s spectrum debt is 7 times higher than western counterparts. That level of debt will be very challenging to service, so avoiding this re-auction is a better plan.
So the only auction participant remaining is Ais, Thailand’s largest Mobile Operator. Ais won no licenses in the 2 earlier auctions, and with their 4G traffic growing in leaps and bounds, they should have their eyes on preventing network congestion.
As with the initial spectrum auctions, questions now turn to the rules governing the process. What kind of auction can be had with only a single participant? How firm is the rule that the license price this time must be no less than the price previously bid? If that rule were to be relaxed, how might the other operators be given another chance to bid? Since the last auction, has the Thai government learned anything about letters of credit or surety bonds? Speaking of the government, is anyone checking into which pockets True’s license fee is going?
These are a small sample of questions. Feel free to suggest more in the comments.
Having won a 900 MHz license Jasmine Mobile (JAS) must now build a mobile network and launch their service. Everyone is asking “When will JAS launch 4G service?”
Of course, JAS wants to launch as quickly as possible. The Finance department is especially keen to begin collecting revenue so that loans can be serviced. With a THB70 Billion license fee, interest alone is likely around 6 Million/day. JAS aspires to attract 2 Million subscribers in the 1st year of service. Assuming ARPU of 200 and Churn of 10%, that represents revenue of around 11 Million/day. Put those 2 together and every day Launch is delayed or accelerated costs or benefits JAS 17 Million! 17 Million here and there and pretty soon you’re talking real money. So there will be tremendous pressure to get the network into service as quickly as possible. Continue reading “When will JAS Mobile Launch 4G Service?”
The long-awaited, continually challenged, frequently changed and oft-delayed auction of 1800 MHz spectrum in Thailand was finally held Wednesday, November 11. Both AIS and True Move won 15 MHz licenses. Total receipts for the Thai government were almost 81 billion Thai Baht (USD 2.25 billion.)
Read coverage of the story at these links:
- The Nation
- Bangkok Post
- Don Sambandaraksa at TelecomAsia
- Joseph Waring at Mobile World Live
- Total Telecom weighs in with coverage of Dtac’s failure to win a license
- Bangkok Post surveys all the bidders
Update 24 November. More sources with stories about the Thai auctions.
900 MHz licenses are expected to be auctioned next month now that a possible legal challenge from CAT has been thwarted. Bangkok Post reports on the deal. The same for companies, Dtac, True Move, Ais and Jasmine International have signed up to participate in the 900 MHz auctions for 2 licenses of 10 MHz.
I’ve been analyzing the announced bidders for the Thai 4G spectrum auctions. Maybe you’ve already read “Thai 4G Auction Bid Strategies – Jasmine”. When evaluating the positions of the 3 incumbent mobile operators the situation is especially complex. Much of this complexity is due to uncertainty about the auction rules and legal conditions. This uncertainty falls into 3 main categories. Continue reading “Thai 4G Auction Uncertainty”
Six companies have picked up bidding documents for the Thai 4G spectrum auctions: Advanced Wireless Network (AIS); DTAC TriNet and DTAC Broadband; True Move H Universal Communication and Hutchison Telecommunications (Thailand); and Jas Mobile Broadband. With the endless changes and back and forth (we’ve already written about the uncertainty being created) the bidders must factor into their strategy the unreliability of the regulator. Continue reading “Thai 4G Auctions – Opting Out as a Bidding Strategy”
Winning bidders in the upcoming 4G Auctions will be building new 4G networks in the spectrum acquired. Both TRUE and DTAC already offer 4G service, so they may already understand the challenges of building a modern 4G network. AIS, and potentially Jasmine Mobile, have not yet launched 4G service and will be working hard to catch up. This follows our previous article in our series about the Thai 4G Auctions. Continue reading “Thai 4G Auctions – Network Implementation”
Later this year Thailand plans to auction radio spectrum for 4G services. The Thai government, led by the National Broadcasting and Telecoms Commission (NBTC), will auction licenses in 900 MHz and 1800 MHz later this year. The Auctions 1800 MHz spectrum are scheduled for November 11th; the 900 MHz auction a month later, though the exact date remains in doubt. 2 licenses will be auctioned for 12.5 MHz each in 1800MHz spectrum, and 2 licenses of 10 MHz each in 900 MHz spectrum. Continue reading “Thai 4G Auctions Bid Strategies – Jasmine”
Last week I wrote about Thailand’s 3G spectrum auctions in Thailand Should Leapfrog 3G and Move Directly to 4G. Some readers disagreed, mostly on the grounds that 4G was not ready or that existing users of 3G-in-2G-spectrum would be upset that their 3G handset investment would be obsoleted sooner than expected. I felt these comments somewhat missed the point I had hoped to make, and was therefore somewhat gratified when Don Sambandaraksa of the Bangkok Post supported the idea.
The comments to my original article, both positive and negative, got me thinking about the impediments that face a 4G deployment in Thailand. The one that is probably the easiest to address is the availability of nationwide Metro Ethernet. Read on as I explore this critical requirement of 4G mobile networks.
Last week I wrote that Thailand should actively consider skipping 3G altogether in favor of a 4G network. Today’s Bangkok Post, in commentary by Don Sambandaraksa, Peering through the dust that’s settled over 3G, now that 3G spectrum auctions are tied up in litigation and TOT has been approved 19 million Baht to expand their 3G network.
In the commentary Sambandaraksa acknowledges that the 800 MHz spectrum currently used by CAT in service of their 3G CDMA network could also be used for 4G. He goes on to point out that DTAC also has an option to deploy LTE if they are granted a license concession n 1800 MHz. This clearly establishes that spectrum is not an impediment to deploying a 4G network. Thanks for your support, Don. But I beat you to it. Just kidding.
Certainly other concern exists, such as nationwide availability of Metro Ethernet for Base Station backhaul and reliable Internet access. I’ll be writing more on those topics soon.