Sunday, October 4, 2009

Foreign ownership a key in 3g licence race

EDITORIAL

AIS, a strong player,is controlled by Shin Corp; DTAC is owned by Norway's Telenor; where does
The National Telecommunications Commission has hinted at possibly holding a second public hearing before it goes ahead with publishing the guidelines this month for the auctioning of the long-awaited 3G licences, which would raise the telecom industry to a higher level.

However, many believe that the 3G auction could take place in December, barring any political accidents. Still, the NTC hasn't decided on the second public hearing yet.

Of all the telecom players, Advanced Info Services stands out as the strongest candidate for a 3G licence, followed by DTAC and True Corp.

Many questions were asked by True's representatives at the first hearing:

- Whether the "simultaneous multiple rounds" auctioning method would allow the bidding up of auction prices.

- What would be the impact of higher spectrum fees on consumers.

- Whether the four-year national coverage build-out requirement was too tough to meet.

- Whether it was appropriate for foreign-controlled firms to bid for 3G licences, based on national security and level playing field issues.

AIS is controlled by Shin Corp, whose major shareholder is Temasek Holdings of Singapore, while DTAC is majority owned by Telenor of Norway.

Based on this comment, one research house suspects that True might not have a strategic partner lined up right now.

But the foreign ownership question in the telecom industry has not yet gone away. Thaksin Shinawatra's sale of Shin Corp raised the issue of the use of nominees on the part of Temasek to circumvent the foreign ownership law.

But the authorities' probe into Temasek and also Telenor over the same issue appears to be shrouded in mystery.

Somkiat Tangkitvanich, director of the Thailand Development Research Institute, says a second public hearing into 3G should be held before passing any laws.

"More attention should be paid to competition issues than to auction designs. The foreign ownership issue must be thoroughly investigated for Type 3 licence applicants, in accordance with the Foreign Ownership Business Act," the research house said.

We agree that the authorities should make the matter of foreign ownership in the telecom industry clear first before proceeding with the 3-G auction.

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