Information and Communications Technology Minister Chuti Krairiksh yesterday denied a rumour that attempts were being made to delay publication of the 3G-spectrum licensing plan in the Royal Gazette.

He said that even Prime Minister Abhisit Vejjajivasupported the National Telecommunications Commission (NTC)’s plan to go ahead and grant the licences. Abhisit had also urged the ICT and finance ministries’ joint committee to complete a stateconcession termination plan within a 30-day deadline to keep pace with the NTC’s schedule for auctioning the licences in September.

The final 3G-spectrum licensing plan was sent to the office of the Cabinet secretary by the NTC on Wednesday to be published in the Royal Gazette. It is expected to be published next week. The NTC is expected to start accepting bid applications on August 30 for an auction to take place in the third week of September.

Chuti said the ICT and finance ministries’ joint committee would conclude its studies on the technical, legal and financial aspects of the concessiontermination plan next Wednesday.

An ICT Ministry source said the committee would hire global law firm Linklaters to consider the legal aspects of the concessiontermination plan. The firm, which has an office in Bangkok, specialises in advising companies, financial institutions and governments on transactional and litigation matters.

Chuti said that the concessiontermination plan could be aborted if it was found that there was no legal channel through which the concessions could be terminated.

According to the Finance Ministry’s concessiontermination concept, mobilephone service concessions will be terminated and replaced with NTC licences that will require an annual licence fee of 12.5 per cent of revenue and will provide a 15-year term. However, the concession holders might have to pay undetermined upfront sums to TOT and CAT Telecom, the owners of their state concessions.

If the NTC grants the 3Gspectrum licences in September, it will then be more difficult for the government to convince concession holders to cooperate with the concessiontermination plan. The licence fee required of 3Gspectrum licence holders is 6 per cent of revenue, less than half the 12.5percent fee proposed by the Finance Ministry for 2G licences.

Chuti has been concerned that the concessiontermination plan may contravene Section 80 of the 2001 Telecom Business Act 2001. The same legal issue was raised by the NTC in its meeting with Abhisit on Wednesday.

Chuti said the ministries’ joint committee would focus on this issue.

Another issue is whether concession termination will invalidate the results of a probe by stateprivate panels into past telecomconcession amendments that allegedly breached the conditions of the concessions.

TOT senior executive vice president Montchai Noonsong said yesterday he was doubtful about concession termination contravening Section 80 of the telecom law.

According to the clause, telecom operators granted concessions by TOT or CAT Telecom prior to the date on which the telecom law came into effect have the right to continue telecom business under the existing scope and rights provided by the concessions until the concessions expire.

The concession term of Advanced Info Service (AIS) ends in 2015; that of True Move in 2013; and that of Total Access Communication (DTAC) in 2018.

The share price of AIS closed at Bt92.25 yesterday, up 5.13 per cent. That of DTAC closed at Bt44.75, up 8.48 per cent, and that of True Corp, True Move’s parent, closed at Bt4.18, up 11.17 per cent.

The private mobile operators are planning to make their opinions on the concession termination known to the joint committee that is now in the process of formulating the plan.

Fitch sees higher risks

According to Fitch Ratings Thailand, the telecom sector is facing higher regulatory risks.

The agency said it was concerned about the regulatory and political risks affecting Thai telecom operators, although a recent government proposal to convert 2G concessions to a licence scheme could be a positive step in resolving some of these uncertainties.

Fitch said it expected the proposal to create a more level playing field among private mobile operators.

However, it noted that if the concession conversion involved a significant lumpsum payment in return for a lower regulatory cost structure and a longer operating period, this could result in an increase in net debt and financial leverage for private mobile operators – although this should improve their cost structures in the long run.

Fitch said the operators also faced significant 3Gdevelopment costs which could result in an increase in leverage in the medium term.

The agency expects limited rating impact as most operators are financially strong.

Tighter scrutiny of foreignownership restrictions and the pending review of past concession amendments are other issues which could potentially affect the private mobile operators, it said.

Fitch gives AIS a longterm foreigncurrency issuer default rating (IDR) of BBB+, with a stable outlook. DTAC’s longterm foreigncurrency IDR is BBB, with a stable outlook.

News item courtesy of The Nation at www.nationmultimedia.com