Post by Fletchsmile on Dec 21, 2015 11:28:50 GMT 7
Can't help feeling that there are quite a few losers over these 2 auctions, and no-one really got a great deal. First auction seemed expensive, but the second one dwarfed that. My thoughts:
4th place and perhaps the biggest
is JAS. Nothing on the first auction and paid thru the nose on the 900 MHz for the section auction as one of the "winners" = Least value for money
3rd place = DTAC came away with nothing from both - not good either - but possibly can console themselves they haven't overpaid = Came away empty handed and must worry about their market position medium term
2nd place = True. Got a licence in both auctions. The first auction being "cheaper" than the second = Big spenders should at least be able to become a bigger player
1st Place = AIS. Won a licence in the first auction for 1800 Mhz which seemed high at the time, and backed out of the second auction when prices went too high. Probably best value for money
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'Winner's curse' fears follow 4G bid
Telcos face heavy price burden
Industry analysts fear "irrational" bidding for the latest round of 4G spectrum licences could cast a winner’s curse on telecom firms set to pay world record bandwidth prices.
After nearly 66 hours of fierce bidding involving 199 rounds of price offers, the auctions for two licences on the 900MHz band ended just after midnight yesterday with two big-name contenders throwing in the towel.
True Move and Jasmine International triumphed with their combined bids totalling 151.95 billion baht, breaking the record for bandwidth auction value previously held by Hong Kong.
True Move, the country’s third-largest mobile operator, led with 76.298 billion baht, which will allow it to provide 4G services on the 900MHz spectrum for 15 years. The price was 491.3% above reserve.
Jasmine International won the other licence with 75.564 billion baht, or 486.4% above reserve. It will pave the way for the first foray into mobile internet for the company, which currently provides landline broadband services under the 3BB brand.
Mobile leader AIS and Dtac ended their bidding at 75.976 billion and 70.180 billion baht respectively.
The two big questions mobile industry analysts are debating are how AIS failed to re-secure its 900MHz spectrum, and whether True Move and Jasmine International bid too heavily.
Some industry veterans suggested True Move and Jasmine could end up the big losers from the auction given the prohibitive prices they will have to pay for the spectrum.
The introduction of a new player into the market is also expected to increase price competition in the sector, making it harder for operators to recoup their investment. Fears of a price war forced telecom shares to a three-year low on Friday.
Pipat Luengnaruemitchai, assistant managing director of Phatra Securities, wrote on his Facebook page that the high prices could prove a “winner’s curse”, similar to the digital TV industry where returns have failed to match the high prices paid for broadcast licences.
Kasikorn Securities (KS) viewed the auction result as a “negative surprise”, as it brings newcomer Jasmine International into the market. It expects True Move will have to raise funds after the auction. While likely to steal market share from AIS and Dtac, the company could incur steep losses in 2016-18, KS said.
For Jasmine International, KS said its costly bid reflects an “irrational” decision which could affect overall share prices across the telecom sector.
AIS, which had been expected to use its stronger balance sheets to boost its 4G network, said in a statement yesterday that it withdrew from the auction because the price had stretched beyond fair value.
“AIS put a lot of research into determining the fair value of the spectrum, which included working with a professional consulting firm to run possible scenarios and outcomes from the auction,” said the company, which faced accusations of driving up the bid prices for its competitors.
“The bidding price exceeded the company’s expectations of fair value, so we decided to exit the auction. With the decision to withdraw, AIS can allocate capital to deploy our 4G network quickly to ensure higher network capacity and greater quality.”
Col Settapong Malisuwan, vice-chairman of the National Broadcasting and Telecommunication Commission, said the regulator will hold a meeting tomorrow to formally approve the winners. He hailed Jasmine Internationals entry to the market as “good news”.
Col Settapong said True Move’s successful bid means it now has the highest amount of bandwidth of all the Thai operators. “True Move has the opportunity to overtake Dtac to become the country’s second largest operator over the next few years,” he said.
Dtac also missed out on the 1,800MHz spectrum auctions last month.
“Bidders who fail to win a 900MHz licence this time will have to wait another decade for the next low-band auction,” said Prawit Leesathapornwongsa, an NBTC commissioner.
www.bangkokpost.com/business/telecom/799972/winner-curse-fears-follow-4g-bid
4th place and perhaps the biggest
is JAS. Nothing on the first auction and paid thru the nose on the 900 MHz for the section auction as one of the "winners" = Least value for money3rd place = DTAC came away with nothing from both - not good either - but possibly can console themselves they haven't overpaid = Came away empty handed and must worry about their market position medium term
2nd place = True. Got a licence in both auctions. The first auction being "cheaper" than the second = Big spenders should at least be able to become a bigger player
1st Place = AIS. Won a licence in the first auction for 1800 Mhz which seemed high at the time, and backed out of the second auction when prices went too high. Probably best value for money
-------------------------------------------------------------------------
'Winner's curse' fears follow 4G bid
Telcos face heavy price burden
Industry analysts fear "irrational" bidding for the latest round of 4G spectrum licences could cast a winner’s curse on telecom firms set to pay world record bandwidth prices.
After nearly 66 hours of fierce bidding involving 199 rounds of price offers, the auctions for two licences on the 900MHz band ended just after midnight yesterday with two big-name contenders throwing in the towel.
True Move and Jasmine International triumphed with their combined bids totalling 151.95 billion baht, breaking the record for bandwidth auction value previously held by Hong Kong.
True Move, the country’s third-largest mobile operator, led with 76.298 billion baht, which will allow it to provide 4G services on the 900MHz spectrum for 15 years. The price was 491.3% above reserve.
Jasmine International won the other licence with 75.564 billion baht, or 486.4% above reserve. It will pave the way for the first foray into mobile internet for the company, which currently provides landline broadband services under the 3BB brand.
Mobile leader AIS and Dtac ended their bidding at 75.976 billion and 70.180 billion baht respectively.
The two big questions mobile industry analysts are debating are how AIS failed to re-secure its 900MHz spectrum, and whether True Move and Jasmine International bid too heavily.
Some industry veterans suggested True Move and Jasmine could end up the big losers from the auction given the prohibitive prices they will have to pay for the spectrum.
The introduction of a new player into the market is also expected to increase price competition in the sector, making it harder for operators to recoup their investment. Fears of a price war forced telecom shares to a three-year low on Friday.
Pipat Luengnaruemitchai, assistant managing director of Phatra Securities, wrote on his Facebook page that the high prices could prove a “winner’s curse”, similar to the digital TV industry where returns have failed to match the high prices paid for broadcast licences.
Kasikorn Securities (KS) viewed the auction result as a “negative surprise”, as it brings newcomer Jasmine International into the market. It expects True Move will have to raise funds after the auction. While likely to steal market share from AIS and Dtac, the company could incur steep losses in 2016-18, KS said.
For Jasmine International, KS said its costly bid reflects an “irrational” decision which could affect overall share prices across the telecom sector.
AIS, which had been expected to use its stronger balance sheets to boost its 4G network, said in a statement yesterday that it withdrew from the auction because the price had stretched beyond fair value.
“AIS put a lot of research into determining the fair value of the spectrum, which included working with a professional consulting firm to run possible scenarios and outcomes from the auction,” said the company, which faced accusations of driving up the bid prices for its competitors.
“The bidding price exceeded the company’s expectations of fair value, so we decided to exit the auction. With the decision to withdraw, AIS can allocate capital to deploy our 4G network quickly to ensure higher network capacity and greater quality.”
Col Settapong Malisuwan, vice-chairman of the National Broadcasting and Telecommunication Commission, said the regulator will hold a meeting tomorrow to formally approve the winners. He hailed Jasmine Internationals entry to the market as “good news”.
Col Settapong said True Move’s successful bid means it now has the highest amount of bandwidth of all the Thai operators. “True Move has the opportunity to overtake Dtac to become the country’s second largest operator over the next few years,” he said.
Dtac also missed out on the 1,800MHz spectrum auctions last month.
“Bidders who fail to win a 900MHz licence this time will have to wait another decade for the next low-band auction,” said Prawit Leesathapornwongsa, an NBTC commissioner.
www.bangkokpost.com/business/telecom/799972/winner-curse-fears-follow-4g-bid
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