Thailand’s third largest operator True Move and mobile newcomer Jasmine International beat out the number one and two players (AIS and dtac) to win two 4G licences for a record price per megahertz, generating a total of THB151.86 billion ($4.22 billion) for the government.

True won 10MHz of 900MHz spectrum with a bid of THB76.3 billion, while Jasmine won a similar block for THB75.56 billion after four days and 199 rounds of bidding by four operators. Both bids were nearly six times higher than the reserve price set by the telecoms regulator at THB12.8 billion. Analysts said the more than $2 billion True and Jasmine each bid for 10MHz of low-band spectrum was a world record per megahertz.

Together with last month’s 1.8GHz auction, which brought in THB80.8 billion ($2.25 billion), the government has raised THB232.66 billion in the country’s long-delayed 4G auctions.

Last month market leader AIS won 15MHz of 1.8MHz with a THB41 billion bid and True paid THB39.8 billion. Those bids were 158 per cent and 150 per cent over the reserve price respectively. Both have said they will launch 4G service this month, without giving details on the planned coverage area.

Bottom-line impact
True CEO Suphachai Chearavanont said its bid for the 900MHz was “within our expectations of reasonable value, following our considerable research into determining the real value of the spectrum”, the Bangkok Post reported.

True has acquired two blocks of 4G spectrum for a staggering THB116 billion ($3.22 billion).

After True won the 1.8MHz auction last month, Dominic Arena, managing director of ASEAN-based consultancy AEC Advisory, said the price True paid for spectrum in terms of annual amortisation cost alone is equal to 67 per cent of its current EBT (earning before tax) based on his analysis. “The impact on True will be much greater as its EBT in absolute terms is less than one-tenth that of AIS.”

As for Jasmine, a local ISP with deep pockets, it will need to roll out 10,000 base stations quickly since Thailand’s infrastructure sharing regulatory framework isn’t the most proactive. Beside the huge investment in spectrum and infrastructure, it will face increased competition from the three established players, and many analysts question the viability of a fourth greenfield mobile operator given the high mobile penetration in the country.

Fitch said last month that the high upfront spectrum fee and sustained high capex for network expansion will raise net debt for the country’s operators, and their financial leverage is likely to deteriorate over the next two years.

The auctions were pushed back by more than a year after the military seized power in a coup in May 2014.

4G services are expected to boost the Thai economy by an estimated THB1 trillion ($28 billion) over the next five years, according to a study by the National Broadcasting and Telecommunications Commission (NBTC). 4G subscribers on the 1.8GHz band are forecast to reach 20 million next year, the telecoms regulator said.

True launched 4G on the 2.1GHz band two years ago and has about 1.7 million 4G users, mostly in the Bangkok area, according to GSMA Intelligence. Number two dtac also offers 4G on a limited scale in Bangkok on the same band. It has about 1.6 million 4G connections.