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NEWS UPDATES Asean Affairs        3  March 2011

Government minister scrutinized for AIS move

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Information and Communications Technology (ICT) Minister Juti Krairiksh has come under fire from industry watchers for floating a plan to sell the mobile business of Advanced Info Service (AIS) to a group of foreign telecom giants if compensation negotiations fail.

They say no foreign investors would want the company under the present unfavourable conditions. Mr. Juti had identified eight potential foreign buyers in the event of the worst-case scenario of AIS failing to pay 74 billion baht in compensation to its concession owner TOT Plc.

They are Telecom Italia of Italy, China Mobile, NTT DoCoMo of Japan, SK Telecom of South Korea, Axiata of Malaysia and three US operators.He failed to elaborate on how a sale might work, since AIS is not the government's to sell. As well, the mobile market leader's shareholders have not indicated any desire to exit the business.

AIS president Wichian Mektrakarn said Mr Juti's proposal came as a surprise to Temasek of Singapore, the major shareholder in AIS's parent, Shin Corp.

"They were amazed by this unexpected move by the Thai government, but they'd rather wait and see what happens while monitoring the situation closely," he said.

Somkiat Tangkitvanich, vice-chairman of the Thailand Development Research Institute, said the ministry's move was too early, especially considering the foreign dominance regulations under the Telecom Business Act.

AIS's concession will expire in 2015.

Any such move by the ministry would be inappropriate as long as AIS operates under a state telecom enterprise's concession, said Dr. Somkiat.

The 2010 Supreme Court ruling on the assets seizure case against former prime minister Thaksin Shinawatra coincided with the ministry setting up a committee to resolve past concession amendments, but AIS was found not at fault on a juristic person basis.

Dr Somkiat said he personally believed there was little chance for Mr. Juti to convince the foreign telecom giants to take over AIS's mobile business, especially since most of those companies are owned by their countries' governments.

The Telecom Business Act caps foreign company ownership of a Thai venture at 49 percent, said Dr. Somkiat.

However, he believes foreign investors would be interested in investing in AIS if the company's concession could be changed to a new licensing model.

Dr Somkiat said the ICT minister's move is probably aimed at pressuring AIS to accept any compensation figure from the committee.

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