Journey to the Top with MCOT!

The phenomenon of “hiking too high” of MCOT Public Company Limited (MCOT) share price after The National Broadcasting and Telecommunications Commission (NBTC) made an announcement on March 5, 2019, to recall 2600 MHz to prepare for the upcoming 5G auction had caused a lot of investors to regret following MCOT in this hike and stuck at the recent highs.

Expecting high compensation from the recall, investors jumped in without a second thought, which made a total value of MCOT on March 5 to record at THB 51 million in value when it normally closed the session with less than THB 1 million in value. The share went as high as ฿11.40/share on that day.

 

The probability of receiving compensation from NBTC depends on how the 5G auction goes, but by the look of financial status of the top three telecommunication companies in Thailand: Advanced Info Service Public Company Limited (ADVANC), Total Access Communication Public Company Limited (DTAC), and True Corporation Public Company Limited (TRUE), it is highly unlikely that any of them will participate in this auction as there is a pile of debt to be paid from 4G license.

Both ADVANC and TRUE have two-year installments remaining to be paid in 2019 and 2020 for THB 4,000 million and THB 60,000 million, respectively. While three-year installments of 1800 MHz remain for DTAC in 2019, 2021 and 2020 for THB 2,000 million, THB 2,000 million and THB 30,000 million, respectively.

Why get all worked up with the auction for 2600 MHz while struggling with the auction for 700 MHz?

Some speculate that MCOT would receive “a lot” of compensation when compared to the closest spectrum that had been auctioned. 1 MHz of 2100 MHz spectrum was worth THB 31 million per year, so how much would MCOT get when the company has six years remaining? And if the speculation is correct, that is.

 

Part of the speculation was the reason for “hiking too high” in share price which is now trapping investors at the top of the candlestick on March 5.