• Boom! There we go, the most expensive 4G license bidding price in the world, Thailand, take a bow, not only does the country have the most number of coups in recent history it can now have another reason to be in the Guinness Book of World Records. A quick recap:
• During the week the stock prices of ADVANC, DTAC, TRUE and JAS were bouncing up and down
• 66 hours of bidding, 199 rounds of price offers with TRUE and JAS paying a combined THB 151.95 bn.
• True won with a THB 76.298 bn bid, JAS won the second license with a THB 75.564 bn (nearly 5x above the reserve price and 50% higher then our highest office pool vote)
• AIS ended bidding at THB 75.975 bn and DTAC quit at THB 70.180 bn

So what?

• As the smartest man in Thailand told me “This is the worst possible outcome for Thailand’s telecom industry and the consumer will come out at the losing end with service quality dropping across the board”  and “If the NBTC is smart, it should reallocate some of the digital TV, 600 MHz to mobile, but they are a bunch of ball-less !@#$ups”
• We have no idea how JAS nor TRUE will pay for this, they’ll need some THB 8 bn in cash, and THB 68 bn in bank guarantees in the next 90 days. Expect to see a lot of capital increases, Investment Bankers should be licking their lips at this, minority shareholders will be cursing under the breaths if they are holding shares in either stock. Note: A capital increase takes 60 days.
• For TRUE its quite simple the conversation will be – “Daddy I need more money, SCB bankers don’t cry, you’ll make a fee and we’ll pay you some interest on the loans, the CEO will probably buy himself another Ferrari, and don’t forget we are your biggest clients so in reality we own you, China Mobile, well it’s your own fault for not requesting any blocking rights when you bought a 19% stake in us :p”
• For JAS..A PP announcement in the morning? A potential takeover target? We’ve heard its the koreans, SK Telecom, willing to back them but much remains to be seen, what else could he sell to an infrastructure fund?!
• DTAC’s concession expires by 2018, so they are praying that there won’t be any delay in the next round of bidding and I dare not imagine how management there is feeling at the moment
• AIS also needs more spectrum and is faced with having to double its capex to rollout nationwide 1800/2100, not the worst position but at least it appears like their dividend payout’s should remain the same.
• Anything positive from this? The country benefits? Debt to GDP drops? More $ for the military to give to low income earners? Who knows…Although we now will have “real 4G”

• Triplying bilateral trade over 5 years from the current US$ 5 bn via connecting the economic zones in Thailand’s Sa Kaeo province and the adjacent Banteay Meanchey province of Cambodia
• Interestingly Thailand asked Cambodia to share its water to ensure power security, while Cambodia expressed gratitude towards Thailand for supplying electricity to parts of Cambodia where there were no local transmission lines.