CGS International Securities (CGSI) noted that the Royal Gazette has officially set a date for the highly anticipated spectrum auction, slated for June 29, 2025. This auction will include the 850MHz, 1500MHz, 2100MHz, and 2300MHz frequency bands, as proposed by the Office of the National Broadcasting and Telecommunications Commission (NBTC). Interested participants will have from April 29 to May 28, 2025, to submit their applications.
In a notable move, NBTC has significantly increased the minimum reserve prices for the auction, with adjustments ranging from 17% to 55% compared to the earlier announcement in February 2025. The reserve prices for the 2100MHz and 2300MHz bands have seen particularly steep hikes, up 33% and 55% respectively, indicating strong demand among telecommunications companies.
However, the analyst anticipates that the 850MHz and 1500MHz bands might not see full bids due to their limitations in supporting future services.
Meanwhile, it is noteworthy that the latest minimum reserve price for the 2100MHz band is now 14% lower than the closing price in the last auction. Detailed final pricing data for the 850MHz and 2300MHz bands remains unavailable due to their current allocation to the National Telecom.
The auction procedure, based on suggestions from AIS and True Corp during a public consultation on February 6, 2025, includes the division of spectrum into three categories: low band (850MHz), mid band (2100MHz and 2300MHz), and another mid band (1500MHz). A simultaneous clock auction format will be employed, featuring two key phases: allocation and assignment.
For the assignment stage, the first-price sealed bid auction will be utilized. Payments will occur in three installments: 50% before the license is granted, with the remaining 50% split equally between the third and fourth years.
In light of the uncertainties surrounding this spectrum auction, CGSI maintains a ‘Neutral’ stance on the telecommunications sector. The analyst recommends investors await the completion of the auction to gain clearer insights into the future cash flow prospects of the involved companies.
