Thailand to amend telcos' concession contracts

The Straits Times, May 3, 2007


BANGKOK - THAILAND'S government will revise the telecommunications contracts of any companies that breach foreign ownership laws, and has not ruled out prosecuting them, said Information and Communications Technology Minister Sitthichai Pookaiyaudom.

'We will not cancel their concession contracts as that will upset the industry,' Mr Sitthichai said by phone from Bangkok yesterday. 'But we will alter the contracts to make them right.'

Investments by Singapore's Temasek Holdings and Norway's Telenor are being reviewed to determine whether they exceed Thailand's 49 per cent foreign-ownership cap for telcos.

Temasek controls Advanced Info Service (AIS), Thailand's biggest mobile phone company, and Telenor owns Total Access Communication (TAC), the second biggest.

The ministry will adjust concessions after the Council of State, the government's legal advisory body, delivers its opinion on where companies are non-compliant, Mr Sitthichai said.

A ruling is expected as early as this month, he said.

Telecoms concessions, including True Corp's, will also be revised as they were awarded without Cabinet approval, Mr Sitthichai said.

A Temasek-led group bought Shin Corp last year from investors including the family of deposed prime minister Thaksin Shinawatra, giving it control of assets including AIS.

Telenor, Norway's biggest telco, controls TAC through direct and indirect holdings.

Mr Sitthichai also clarified a report by The Wall Street Journal on Tuesday that said Temasek will not be prosecuted if it is shown to have broken foreign-ownership laws in the purchase of Shin Corp.

'I said our ministry doesn't have a legal role in that, but other related agencies are still working on this issue,' Mr Sitthichai said yesterday.

'When it's clear they have breached the law, they will need to pare their stakes in the telecom units.'

Temasek declined to comment in an e-mailed statement.

Thailand's government is 'still investigating' whether Temasek breached foreign-ownership laws, Mr Sitthichai said.

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