Thailand talks of revoking concessions

Metaratings
20 May 2011
00:00
Article

As if things were not complicated enough in Thailand, with everyone suing everyone else in various courts, The Ministry of Information and Communication Technology has dropped a bombshell on the industry which could lead to renationalization of the entire mobile telco space.

MICT Permanent Secretary Jirawan Boonperm held a press conference on the conclusion of talks between concession holders, state telcos CAT and TOT, and their concessionaires, AIS, DTAC, TrueMove and also little known DPC (now part of AIS) which collapsed after what she said were useless statements made by CAT.

The negotiations were centred on changes made to the concessions approved by Prime Minister Thaksin Shinawatra’s Cabinet. The Supreme Court has already found Thaksin guilty for policy changes that benefited the companies that was owned by his family (and cook and driver). Among these were changes to the telecom concessions AIS and others were operating under, chiefly a reduction in prepaid revenue share from the 25% down to 20% and also, as highlighted by MICT, extensions of the concession periods.

The MICT Permanent Secretary said that she would forward her findings to the Cabinet. If the cabinet agrees with the MICT that the Public Private Joint Investment Act has been violated, the Cabinet can either revoke the amendments or revoke the concessions entirely.

However, both termination and cancellation of amendments will result in the same thing. For instance, DTAC had its concession extended to 2018. Without the amendments, it would have expired last year.

MICT has instructed TOT and CAT to come up with contingency plans to take on the subscribers to ensured continued service if such a move does happen in what would be one of the biggest telecom renationalizations to hit the industry in modern times.

Of course, there is a lot of room for appeal and further legal battles before renationalization actually happens, and few, apart from some die-hard bureaucrats, believe it would get that far.

CAT for its part insisted in this round of talks that there was no monetary damages stemming from the concession amendments, contradicting earlier reports from its own internal committees.

TOT has summarised damages from the concession amendments at 88.36 billion baht ($2.91 billion) that it believes AIS should pay up.

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