National Telecom (NT) has picked Advanced Info Service (AIS), the country's biggest mobile operator by subscriber base, as its 700-megahertz spectrum business partner, with an agreement expected to be signed in August, according to a source close to the state telecom enterprise's board.
The move is expected to help ease NT's concerns over how it can capitalise on its 700MHz spectrum range and prevent spending huge amounts to utilise the spectrum.
NT was founded on Jan 7 last year through the merger of state telecom enterprises CAT Telecom and TOT. NT holds 20MHz of bandwidth on the 700MHz spectrum range worth 34 billion baht via a 2020 auction won by CAT Telecom, but NT has yet to capitalise on the frequency.
Under the deal, AIS will buy 10MHz of bandwidth on the 700MHz spectrum from NT, half of the 20MHz of bandwidth on the range held by NT.
The telecom regulator obliges the spectrum's bidding winner to pay in 10 instalments with 10% of the bid price each time. NT has already paid for two instalments -- 3.6 billion baht each time -- for its 20MHz of bandwidth.
Under the deal, AIS will pay NT's remaining costs to the regulator for the 10MHz bandwidth on the frequency.
NT will rent AIS's cellular network and related equipment in order to provide its 5G services on the remaining 10MHz of bandwidth, with a rental fee paid to AIS until the spectrum licence expires.
AIS will also facilitate NT services through future network collaboration.
The deal would help save huge costs for NT regarding spectrum fee payments, though NT still has to pay a rental fee for the cellular network for AIS, the source said.
AIS, which already has 30MHz of bandwidth on the 700MHz spectrum, will be able to increase the size of its bandwidth to 40Mhz.
AIS's rivals True and Total Access Communication (DTAC) each occupy 20MHz of bandwidth on the 700MHz range at present. With their upcoming merger, the enlarged firm would have a combined 40MHz of bandwidth on the spectrum.
"The move can ensure AIS's competitiveness with branding strategy against its rivals," the NT source said.
The source said AIS's offers were seen as more flexible and attractive than those of its rival True.
