AIS deal to give TOT Bt10-bn revenue boost annually

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AIS deal to give TOT Bt10-bn revenue boost annually
USANEE MONGKOLPORN
THE NATION

BANGKOK: -- TOT will gain around Bt10 billion per year from Advanced Info Service (AIS) during the initial period of their planned partnership to provide 3G wireless broadband service on the state agency’s 2.1GHz spectrum.

However, the contract can be reviewed, as both are yet to sign the deal. The deal was developed before the auction of the 900MHz licences in the middle of this month, which saw AIS and Total Access Communication failing to grab a licence.

AIS chief executive officer Somchai Lertsutiwong said he was confident that the deal would be signed next month. According to the deal, AIS will roll out the additional 2.1GHz network for TOT, which in turn will lease the network to wholesale 80 per cent of bandwidth capacity to AIS to provide the service. After squaring AIS' network rollout cost with TOT's purchase of network capacity from AIS, and AIS' payment to buy this bandwidth capacity, TOT will gain a net between Bt3.5 billion and Bt3.9 billion annually.

AIS will also pay B4 billion per year to rent TOT's telecommunications towers and transmission network for 15 years and another Bt2 billion per year to rent the state agency's 13,000 cellular base stations for three years.

The two winners of the 900MHz licences - True Move H Universal Communication of True Corp and Jasmine Mobile Broadband of Jasmine International - are both reportedly interested to lease TOT's telecom infrastructure to provide 900MHz service. Like AIS, True is also interested to be TOT's partner to offer the 3G service on the state agency's 2.1GHz spectrum.

Following the recent auction of new 1800-megahertz (MHz) and 900MHz spectrum licences during November and December, TRIS views the impact on credit ratings of rated telecom operators as dependent on how the industry structure evolves and their strategy to counter the competition.

The four telecom operators rated by TRIS are: True (BBB+/Stable), TUC (BBB+/Stable), DTAC (AA+/Stable), and DTAC TriNet (AA+/Stable). However, the ratings will be monitored as new developments emerge in the industry.

True and Jasmine won the 900MHz bidding at a record price of Bt76.3 billion and Bt75.6 billion, respectively.

In November, True and AIS secured the 1800MHz spectrum licence, at Bt39.8 billion and Bt41 billion, respectively.

Competition is expected to intensify, given the entry of Jas into |the market and the defensive strategies employed by the existing players that could eventually trigger a price war.

According to Kasikorn Research Centre, the 4G telecom operators and the plans of mobile-phone makers to cash in on the 4G trend would drive the growth of smartphone sales in Thailand. The demand is expected to be from consumers who use 2G mobile phones and those whose mobile phones are compatible with only 3G technology. It is estimated that the number of 2G handset users is 10.7 million.

The research house estimated that the sales of smartphones next year would surge to between 17.9 million and 18.7 million units, up by 14.7 per cent to 19.9 per cent year-on-year. The value of the smartphone market next year is expected to reach between Bt93.88 billion and Bt94.48 billion, expanding between 5.1 per cent and 5.8 per cent year-on-year.

Source: http://www.nationmultimedia.com/business/AIS-deal-to-give-TOT-Bt10-bn-revenue-boost-annuall-30275783.html


-- The Nation 2015-12-28