Thailand's biggest mobile operators battled on Tuesday for more fourth generation (4G) mobile spectrum in an auction expected to net at least $2 billion for a military government struggling to revive the country's economic growth.

Shares in top two operators Advanced Info Service (AIS) and Total Access Communication Pcl surged on expectation that they will win licences to prevent a newcomer from entering the $6.7 billion telecom market, analysts said.

The other bidders are third-largest mobile operator True Corp and broadband operator Jasmine International. AIS and True paid a combined $2.26 billion for the first set of 4G licences auctioned last month.

Unlike top executives of other bidders, Jasmine's CEO was the only one who did not join the company's bidding team and market took this as a sign that Jasmine may not bid aggressively.

AIS shares, which hit near a two-year low on Monday, shot up 8.8 percent at 0826 GMT. TAC surged 20 percent to a three-week high. True rose 8.3 percent, while the main Thai index was 1.5 percent higher.

The National Broadcasting and Telecommunication Commission (NBTC) told a news conference bidding prices might be lower than the previous auction in November given Jasmine is estimated to have an upper bidding limit at 28 billion baht ($776 million).

"TAC and True will be key drivers pushing up bidding prices," NBTC member Pravit Leestapornvongsa said adding, Jasmine's profitability could be hit if it pays licence cost at higher than the limit.

As of 0835 GMT, bids were 20.9 billion baht for each licence, versus a base price of 12.86 billion baht, the regulator said.

The auction continues until 1400 GMT before a three-hour break. Bidding will resume at midnight and continue until 6 a.m. local time. If no winner has emerged by then, the process will start again at 0200 GMT Wednesday.

The new 4G spectrum will enable companies to expand network capacity and tap robust demand for mobile data in a saturated market, where mobile phone penetration is more than 140 percent.

AIS, 23 percent owned by Singapore Telecommunications, has lagged its rivals on 4G services due to limited bandwidth capacity. The company plans a commercial launch of 4G services in late January.

TAC, controlled by Norway's Telenor, wants the 900MHz band licence to reduce its costs, while True, 18 percent owned by China Mobile, could have rising debt burden if it bids aggressively, analysts said. (from yahoo news)