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NEWS UPDATES 19 August 2010

“Foreign dominance” issue heats up Thai telecoms

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In a battle that could end up in the courts, Thailand’s National Telecommunications Commission is not backing down from its stance to limit what it terms, “foreign dominance” in shareholding and management sectors in the telecoms sector.

The limitations are intended to apply to existing companies and new entrants attracted to Thailand’s telecoms due to the auction for 3G licenses coming up at the end of September. One of the commissioners dismissed complaints filed by the European Union that allege the restrictions violate Thailand’s commitments to the General Agreement on Trade in Services (GATS) under the World Trade Organization.

The commission believes it is not subject to the jurisdiction of the Government Procurement Agreement under the WTO.

The rules do not concern public procurement, the commission maintains, but involved private competition for 3G spectrum for commercial services.

A telecommunications expert said companies could seek legal action in the Thai Administrative Court or the WTO itself, as the rule might violate the principles of most-favored nation status and national treatment under GATS.

Two companies currently in Thai telecoms, Advanced Info Service (AIS) and DTAC, the country's two largest mobile operators, may file a court injunction against the commissionprior to submitting their 3G bids. The major shareholders of AIS include Singapore's Temasek Holdings and Singapore Telecom, while DTAC is controlled by Norway's Telenor.

Of particular concern is a suggestion that the nationality of a company's senior management should be considered in the 3G auction, an issue that could affect a number of bidders, including AIS and DTAC.

The commission plans a public hearing on the foreign dominance draft tomorrow.

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