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NEWS UPDATES 22 July 2010

Thai NTC backs conversion proposal

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A government plan to convert mobile phone operators' concessions into licences has been backed by the National Telecommunications Commission, which previously warned of possible legal wrangles.

The support from the telecoms regulator came after talks were held yesterday between Prime Minister Abhisit Vejjajiva and the seven board members of the NTC to discuss the conversion proposal unveiled by Finance Minister Korn Chatikavanij on Sunday, according to the Bangkok Post.

Under the proposal, the 2G telecom concessions of Advanced Info Service, DTAC and True Move, will be terminated and replaced by 15-year licences. They will have to pay 12.5% of their revenues as a licence fee.

True's concession ends in 2013, while AIS's expires in 2015 and DTAC's comes to an end in 2018. AIS now pays 30 percent of its revenues to TOT. DTAC and True pay 25 percent to CAT Telecom (CAT).

The government's proposal is aimed at creating a level playing field for the operators and fair competition with the 3G network.

The auction for the 3G network licences is expected in late September. Any firm that wins a 3G licence must pay a 6 percent fee.

The government wants to increase the fee for a 3G licence to 12.5 percent, the same as for the 2G concessionaires.

The prime minister said after the meeting that the NTC board agrees with the proposal that was acknowledged on Monday by the economic ministers.

"What the NTC is doing is the same as what we are doing. That is to see fair competition, ultimate benefits [to consumers] and full utilisation of national resources," Mr. Abhisit said.

But what differs is that the government and the NTC have their own duties to perform and so they have to fine-tune each other.

He said the NTC will go ahead with its scheduled 3G licence auction in September.

The NTC has submitted the 3G auction rules for publication in the Royal Gazette. The auction rules will take effect after they are published.

Mr Abhisit said there is a time frame of 30 to 45 days for private operators to decide whether to enter the bid after publication of the rules in the Royal Gazette.

He said the time frame corresponded with the 30-day period which the government gave the joint panel of the Information and Communications Technology (ICT) and Finance ministries to look into all legal aspects and problems if 2G concessions are terminated.

He insisted the government will not break the law and that it shares a common understanding with the NTC that if any regulations result in legal problems for the 2G concession terminations, then they could be revised.

Mr Abhisit also said it is too soon to say how many problems the finance minister's proposal will encounter, adding it was up to the joint committee to work out all of these within the designated time frame.

Commenting on the opposition to the proposal by the TOT's union, the prime minister said it is normal for some parties to disagree. But he said everything depends on understanding and the ultimate benefits to consumers.

He said he understands the worries of the union but they should realise that the government is trying to find the best solution.

The union on Tuesday opposed the proposal, saying it will benefit mobile phone operators whose concessions will expire soon.

NTC commissioner Natee Sukolrat said the board supported the prime minister's initiative as it could lead to free and fair competition under the same rules and regulations.

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