True baulks at 4G licence fee
text size

True baulks at 4G licence fee

Rumours swirl amid reauction uncertainty

A woman in front of the National Broadcasting and Telecommunications Commission (NBTC) offices can't get 4G signal, as the process to licence and offer 4G data service has stalled over the NBTC's handling of the bandwidth auctions. (EPA photo)
A woman in front of the National Broadcasting and Telecommunications Commission (NBTC) offices can't get 4G signal, as the process to licence and offer 4G data service has stalled over the NBTC's handling of the bandwidth auctions. (EPA photo)

True Crop has halted the first instalment payment for its 900-megahertz spectrum licence until authorities clarify conditions for a possible new auction round.

The abrupt decision came just a day after a teleconference on Monday between top executives and shareholders of the company along with up to 50 global investment banks and analysts.

The meeting ended with a resolution to hold off paying the bidding fee for the 900MHz licence that True won last December and wait instead for a concrete explanation from the National Broadcasting and Telecommunications Commission (NBTC) about the possible reauction.

"We'll submit a formal letter to the NBTC this week seeking a resolution to any reauction's conditions before we make payment," chief financial officer Noppadol Dej-Udom said.

"The move is just to ensure we don't find ourselves in the unfair position of having to pay an exorbitant licence fee alone while other bidders enjoy much lower bid prices in a new auction round.

"As a matter of best practice, a fair consideration of the framework for a 900MHz reauction should be given to us."

He said the NBTC should implement a new international standard for future auctions in order to prevent similar incidents.

Indeed, True hopes Jasmine International Plc can pay its own bidding fee in order to prevent any turbulence in the industry, Mr Noppadol said.

An NBTC source earlier admitted the regulator was quietly drawing up plans to call a new auction round for the 900MHz spectrum if bid winner and Jasmine subsidiary JAS Mobile Broadband failed to secure the massive funding it needed by March 21.

Rumours have circulated in the industry that Bangkok Bank rejected Jasmine's initial borrowing plan.

The rumours came after banks started asking for new plans before licence winners could receive cash due to bids in the 900MHz fourth-generation (4G) auction running two or three times higher than expected.

Another rumour spreading online is Jasmine's executives have ordered staff to remove the company's 4G advertising billboards.

Jasmine chief executive Pete Bodharamik could not be reached for comment.

Noppadol: True will wait for clarification

Industry veterans have pointed out that global standards for reauctions stipulate a previous winner -- True in this case -- must carry the same bidding price gap from the previous auction with the new co-winner.

One veteran said in the case of True and Jasmine, the latter's JAS subsidiary won the first licence for 75.7 billion baht or 487% higher than the auction reserve price of 12.9 billion.

True Move H Universal Communication (TUC), a subsidiary of True Move, won the second licence for 76.3 billion baht or 491% above the reserve price.

True's licence cost is about 600 million baht higher than JAS's, so the winning price of the new 900MHz auction must have the same 600-million-baht gap with True, the source said.

"Let's say the bidding fee of the new auction round ends at 50 billion baht. The NBTC should then reduce the fee payment for True to 56 billion baht," the source said. "And Jasmine must shoulder the extra costs incurred by the NBTC for a new auction."

The source also urged the regulator to impose a hefty fine on Jasmine to prevent similar incidents from occurring.

The source believes both Advanced Info Service Plc (AIS) and Total Access Communication Plc (DTAC) are interested in a new 900MHz auction if the reserve price is not set at the previous huge winning prices.

Mr Noppadol also said four or five commercial banks had already approved a syndicated loan worth 73 billion baht to True for bank guarantee payments.

Both JAS and TUC were given 90 days after the auction, until March 21, to make the first payment of 8.04 billion baht, half the estimated spectrum value. An additional 25% is to be paid by year-end and the final 25% next year, then any remaining bid amounts in 2018.

When the winners pay their first instalment, they must also post three bank guarantees for the remaining amounts. The delay will postpone the commercial launch of 4G wireless broadband in provincial areas.

"We are ready to make our bidding fee payment but will wait for a clear resolution before making any move," Mr Noppadol added.

Do you like the content of this article?
COMMENT (2)