The market position of telecom operator Total Access Communication (DTAC) is likely to strengthen after it secured the 900MHz spectrum at an auction on October 28, plugging the gap in its spectrum portfolio that had constrained its competitiveness, according to Fitch Ratings.
DTAC’s wholly owned subsidiary, DTAC TriNet Co Ltd, on October 28 won a 900MHz licence containing the 2x5MHz bandwidth for Bt38.1 billion.
Fitch believes that the 900MHz spectrum and DTAC’s recent upward revision of planned capital expenditure will help enhance its network quality in rural areas and address its falling market share and service revenue.
In addition, as a condition of the 900MHz auction, DTAC will be allowed to use the 850MHz spectrum – used for its 2G concession which expired in September 2018 – for 3G services. This should prevent network deterioration and assist subscriber retention.
Fitch believes this benefit outweighs the high 900MHz spectrum acquisition cost.
The NBTC 900MHz licensing terms allow DTAC to use the 850MHz for not exceeding two years during its transition to the 900MHz band from the 850MHz.
DTAC’s loss of market share over the past few years has partly been due to its inferior spectrum holding and network quality, according to Fitch. DTAC has wide spectrum bandwidth, but only in high-frequency bands, including 1.8GHz, 2.1GHz and 2.3GHz, which are suitable for serving city areas, Fitch said.
The acquisition cost of the 900MHz spectrum and elevated capital expenditure will affect DTAC’s cash flow and financial leverage. However, Fitch believes DTAC’s relatively low financial leverage should give it the flexibility to support additional investment over the medium term.