Fitch says 4G deal with TOT crucial for dtac - Mobile World Live

Fitch says 4G deal with TOT crucial for dtac

06 APR 2017

Thailand’s second largest mobile operator dtac stands to gain the most from winning a 4G public-private partnership contract from state-run telecoms operator TOT, as it would boost dtac’s spectrum holdings, at least in the short term, said Fitch Ratings.

TOT opened a request for proposal for its 2.3GHz spectrum in February, and private mobile operators were required to submit proposals to it by end-March. TOT is expected to select the winning operator in May. Dtac held discussions with the operator in February about launching service on the 2.3GHz band. A dozen other companies expressed interest in running TOT’s 4G service.

Fitch said dtac could be the winner among the country’s three private mobile operators, which participated in the beauty contest for the 2.3GHz spectrum contract, as dtac needs the spectrum the most and, therefore, has the greatest incentive to propose the most attractive terms to TOT.

New spectrum needed
However, Fitch noted the contract alone is unlikely to solve all dtac’s spectrum shortage problems, as more spectrum will be required over the next two years to support its growing mobile operations over the medium term.

With a total spectrum holding of just 50MHz, dtac needs to acquire new spectrum over the next two years to replace the 35MHz it will lose when its 2G concession expires in 2018. The 15MHz of 2.1GHz spectrum it owns under the licence regime may not be enough to support the rapid increase in mobile traffic and technology upgrades in the medium term.

Fitch believes dtac’s loss of market share to competitors over the past few years was partly a result of its inferior spectrum holding position. Additional spectrum and more network investment could help improve its network quality and slow declines in its market share and service revenue, the agency said.

Dtac’s market share fell 4 percentage points over the past two years to 26 per cent at end-March, according to GSMA Intelligence.

Even if dtac secures the 2.3GHz contract, Fitch expects it will still need to participate in the auctions for 1.8GHz and 850MHz spectrum, which are likely next year.

TOT is expected to soon receive approval to move ahead with its planned 4G service with a private operator after the National Broadcasting and Telecommunications Commission settled a long-standing legal dispute about public-private partnerships last month.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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