AIS, DTAC prices fall on reported finding 2.1GHz auction favoured bidder collusion

Corporate May 28, 2014 00:00

By Usanee Mongkolporn
The Nation

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The share prices of two major private cellular operators yesterday dropped after reports that an anti-corruption subcommittee had decided that the auction of 2.1-gigahertz licences in 2012 had favoured collusion among bidders at the expense of the state.

The stock price of Advanced Info Service (AIS) fell 1.73 per cent to close at Bt227, while that of Total Access Communication (DTAC) dipped 1.67 per cent to close at Bt118. 
However, True’s share price rose 4.48 per cent to close the day at Bt7.
A telecom analyst said the market was concerned that if the National Anti Corruption Commission (NACC) sub-panel had indeed reached such a conclusion, this would affect the existing 2.1GHz-3G licences of subsidiaries of both AIS and DTAC. 
True’s share price, meanwhile, was not negatively affected by the reports because stock investors viewed that most of the company’s cellular service revenue came from 850MHz-3G service, and not from 3G-2.1GHz service, said the analyst.
National Broadcasting and Telecommunications Commission secretary-general Takorn Tantasit said that as far as the NBTC knew, the NACC subcommittee had yet to reach any conclusion on the case.
The reports about the anti-graft agency’s position on the case came amid the NBTC’s preparation to call for bids for 1,800MHz and 900MHz spectrum slots by late this year. 
The watchdog will hold a public hearing on the draft plan for the 1,800MHz auction today. 
If the NACC sub-panel reaches the conclusion that has been reported on the 2.1GHz-licensing case, it will submit its findings to the agency’s board for further investigation.
26 million subscribers 
AIS has around 26 million 3G-2.1GHz subscribers out of a total of 42 million mobile-phone users signed up by the company, while DTAC has about 15.9 million 3G-2.1GHz subscribers out of around 28.2 million mobile-phone users on its books. 
In October 2012, the NACC appointed a subcommittee to investigate whether the NBTC telecom panel’s approval of the bid results of the 2.1GHz-3G licence auction had breached the State Bidding Act, and if the auction had lacked meaningful competition. 
This followed a petition to the NACC by the Senate’s corruption inquiry and good-governance committee.
Several parties, including the Senate panel, brought the complaints to the NACC with a focus on two issues: that the auction had allegedly failed to ensure meaningful price competition, and that there had possibly been a breach of anti-collusion law. 
The NBTC has denied all the charges, insisting that the auction was conducted on a transparent and fair basis and did not favour any telecom operators in particular. 
The 2012 auction was slammed by many parties as being a less-than-fiercely competitive affair, with the three highest bidders paying a combined Bt41.625 billion – less than 3 per cent above the reserve price – for the nine prized spectrum slots after seven rounds of bidding. 
Six of the 2.1GHz slots went for exactly the reserve price of Bt4.5 billion each.
The three bid winners were AIS’s Advanced Wireless Network, which paid a total of Bt14.63 billion for three slots; DTAC Network, which paid Bt13.5 billion for three slots; and True Corp unit Real Future, which also paid Bt13.5 billion for three spectrum slots.
After the auction, the three operators jointly refuted the accusations of any bid collusion. 
The five-member telecom committee of the NBTC in December 2012 voted 4-1 to grant spectrum licences to the three bid winners.