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NEWS UPDATES 6 August 2010

Thailand tries to curb foreign telecom role

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Thailand tries to curb foreign telecom role Nationalism is no stranger to Thai politics and it has again raised its not too attractive head in the much delayed start to get Thai mobile phones into the 3G world.

The National Telecommunications Commission (NTC), the organization responsible for the upcoming 3G license auction has announced a draft regulation to stave off what it terms foreign dominance. A public hearing is slated for August 20.

The regulation defines "foreign dominance" as direct and indirect control or influence on a company in setting policy and engaging in management beyond that permitted by their share ownership. This includes the use of nominees and foreign ownership that exceeds the levels permissible by law.

Most noteworthy is a suggestion that the nationality of senior executives would be taken into consideration in deciding whether companies could bid for 3G mobile broadband licenses. The country's two largest mobile operators, Advanced Info Service and DTAC, have major foreign shareholdings, Singaporein AIS parent Shin Corp and Norway in DTAC. Two of DTAC's top executives in Thailand are Norwegians.

Thana Thienachariya, chief corporate affairs and strategy officer for DTAC, said he was very confused about the regulation and noted that under the Asean Economic Community plan that the region intends to adopt by 2015, the Thai government was preparing to liberalise many service areas, including telecoms, by allowing foreigners to hold up to 75 percent in local companies. The NTC, he said, was doing the opposite of liberalisation.

The pre-qualification process for 3G bidding is scheduled August 25-26 and bidders would be asked to submit formal applications on August 30. The new regulation might force the planned 3G auction to collapse because no foreign investors would be interested.

Recent NTC road shows had drawn interest from several foreign operators including China Mobile, China Unicom, SK Telecom of Korea, NTT DoCoMo and KDDI of Japan, Maxis of Malaysia and Atis of the UAE.

With Thailand already trailing its supposedly “less advanced” neighboring countries in the adoption of 3G technology, this is something the country does not need, observers believe.

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