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NEWS UPDATES 29 July 2010

National 3G operator role proposed

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A Thai government committee has proposed that state telecom agencies, TOT Plc and CAT Telecom, serve as national 3G operators and end their retail commercial roles to not compete with private operators, the Bangkok Post report. The state telecom enterprises could set up new subsidiaries to operate businesses on a wholesale basis. The government must hold less than 49 percent in the non-consolidated units, said one of the seven members of the committee chaired by Juti Krairiksh, the Information and Communications Technology minister.

The committee has 30 days to recommend a strategy for third-generation mobile broadband services and finalise details on the Finance Ministry's proposal to terminate concessions. Finance Minister Korn Chatikavanij has proposed ending the 2G concessions of AIS, DTAC and True Move and giving them 15-year licences to create fair competition with the 3G network, as well as minimising duplicate investment by 30-40 percent. Operators would pay 12.5 percent of their revenues as a licence fee.

Having a national 3G operator would provide competitive prices for operators as they could cut duplicate investment costs and share fibre optic infrastructure, cell sites and switching equipment, which could save them 10 billion baht each, said a committee source. TOT and CAT, meanwhile, could receive rental fees from both 2G and 3G networks to offset declining revenues when existing revenue-sharing concessions end, the source said. He said the national operator model would encourage a fair 3G marketplace for operators and the two state agencies.

However, he said it was the duty of the Finance Ministry to create a national operator with transparency, especially in middle organisation, which could be trusted by all operators as well as the government.

The committee now needs to work out details of evaluating all assets of the three mobile operators on a platform-by-platform basis to estimate the rental fees for each operator. The source claimed that mobile operators had intentionally concealed some assets that needed to be transferred to the state under the build-transfer-operate contracts. They have been switching some assets into affiliates on a rental basis to pave the way for future use after their concession ends, he said.

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