June 15, 2018 / 2:58 AM / a year ago

UPDATE 3-Thai telcos sit out $3.5 bln spectrum auction, regulator to review process

* All 3 Thai mobile operators to give 1800 Mhz auction a miss

* AIS, DTAC announce decision on Friday; True Corp decided in May

* Regulator says to decide in 2 weeks whether to postpone auction

* DTAC shares slump 8 pct as winning spectrum was seen as crucial (Recasts with AIS decision to not participate; adds regulator’s comment)

By Chayut Setboonsarng

BANGKOK, June 15 (Reuters) - Thailand’s three mobile operators have decided to not bid for new spectrum in the Southeast Asian nation, citing onerous terms of an auction that was seeking to raise $3.5 billion, potentially derailing the process.

The largest mobile operator, Advanced Info Service Pcl , and third-ranked Total Access Communications Pcl (DTAC), which is 43 percent owned by Norway’s Telenor Group, announced on Friday they won’t participate in the auction.

True Corporation, the second-biggest, and part of CP Group, which is owned by Thai billionaire Dhanin Chearavanont, said last month it would sit out.

Thailand, in its first spectrum auction since 2015, has put up three 15-MHz licences under the 1800 Mhz spectrum, with a reserve price of 37.5 billion baht ($1.17 billion) each. The licences have a 15-year lifetime.

The deadline for firms to indicate whether they will bid or not was Friday, while the auction itself has been scheduled to be held in August.

All three mobile operators have criticized the regulator’s conditions.

The “terms are not appropriate nor in the best interest of the company,” AIS said in a statement. DTAC has called the terms “out of step” with industry needs.

The Thai telecoms regulator, National Broadcasting and Telecommunications Commission (NBTC), said after the company’s announcements on Friday that it will decide in two weeks whether to keep the auction alive or postpone it. It has previously said that if there were no bids, it would reschedule the auction, possibly within a year.

DTAC has said the spectrum blocks were too large.

“We urge the regulator to introduce a spectrum roadmap for release of lower band spectrum,” Marcus Adaktusson, Telenor group vice president for public affairs, Asia, said in an email, adding that the “the large block sizes create artificial spectrum scarcity.”

DTAC’s shares slumped more than 8 percent on Friday and were down 6.1 percent at the midday break, with rival operators’ shares climbing around 2 percent.

Analysts have said DTAC needed the spectrum as its current concession on a separate license on the 1800 MHz spectrum is set to expire in September. Ratings agency Fitch has said securing the 1800 Mhz spectrum was “crucial” for DTAC because it had lost market share due to spectrum inferiority.

“DTAC currently has enough high-band spectrum to handle the growth of data services,” Chief Executive Lars Norling said in a statement on Friday. “The auction conditions did not allow for long-term value creation,” Norling added. (Reporting by Chayut Setboonsarng and Aukkarapon Niyomyat; Editing by Stephen Coates and Muralikumar Anantharaman)

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