Fair auction to determine fate of Thaicom satellites

Fair auction to determine fate of Thaicom satellites

EXCLUSIVE INTERVIEW: Thailand starts moving carefully towards a real licensing regime

Satellite dishes located behind Thaicom's headquarters in Nonthaburi. (Photo: Tawatchai Kemgumnerd)
Satellite dishes located behind Thaicom's headquarters in Nonthaburi. (Photo: Tawatchai Kemgumnerd)

The Digital Economy and Society (DES) Ministry says a fair auction will be held to determine the operator of Thaicom's 4 and 6 satellites, which are scheduled to be handed over to National Telecom (NT) after SET-listed Thaicom's concession ends in September.

DES Minister Chaiwut Thanakhamanusorn told the Bangkok Post the satellite and space sector is a key element to national security.

The government is being careful as the country's satellite sector transitions from a concession model to a real licensing regime, he said.

"The bidding will be transparent and we are confident in selecting qualified players," said Mr Chaiwut.

Thaicom operates the Thaicom 4 satellite for broadband service and Thaicom 6 for broadcasting service.

Mr Chaiwut said he recently met the top management of Thaicom for a discussion about the company's experience in the satellite business under the DES Ministry's concession.

Previously, the government had assigned CAT Telecom to look after Thaicom's 4 and 6 satellites after the concession ended but that responsibility currently belongs to NT, which was formed through the merger of CAT and TOT in January this year.

NT has to seek a proper partner to run Thaicom 4 and 6.

Mr Chaiwut said the DES ministry has yet to determine the conditions of NT's partner for Thaicom 4 and 6.

Thaicom is seen as a potential candidate to re-operate the two satellites.

A 41% stake in Thaicom is held by InTouch Holdings, whose biggest shareholder is Singapore's Singtel Global Investment Pte with a 21% stake.

When the satellite concession contract was given by the government in 1991, Shin Corporation, the former name of InTouch, agreed to set up a new firm to run the service with Shin holding a stake of at least 51%. The new firm was named Shinawatra Satellite, which later changed its name to Thaicom.

Under the Thaksin Shinawatra administration, Thaicom in 2003 requested the Information and Communication Technology (ICT) Ministry -- the former name of the DES Ministry -- to adjust the concession by letting InTouch reduce its stake in Thaicom from at least 51% to 40% as it wanted more partners. This proposal was later approved.

However, the National Anti-Corruption Commission later ruled against the approval but InTouch's stake in Thaicom never returned to the 51% as stipulated in the contract.

Previously, Mr Chaiwut pointed out that as InTouch's share proportion in Thaicom should be at least 51% and with Singapore's Singtel holding a 21% stake, efforts must be made to ensure shareholding proportions of foreign entities in Thaicom are not more than Thai entities.

He mentioned that shortly before SET-listed Gulf Energy Development, Thailand's biggest private power producer by market value announced its intention on April 19 to acquire InTouch, the parent firm of Thaicom and Thailand's biggest mobile operator Advanced Info Service (AIS).

Gulf, which now has an 18% stake in InTouch, told the Stock Exchange of Thailand it aims to purchase the remaining shares of InTouch through a conditional voluntary tender.

Mr Chaiwut said he has no idea what will happen after Gulf makes a tender offer or whether the successful move would mean Thaicom will see the shareholding proportion of Thai entitles become more than those of foreign entities after InTouch's stake in the company is pushed up to 51%.

Mr Chaiwut also acknowledged the DES Ministry is in the arbitration process with Thaicom in two dispute cases.

The ministry considers Thaicom 7 and 8 satellites to be part of Thaicom's concession and is demanding the company provide revenue sharing but the firm insists the two satellites are operated under a single licence from the National Broadcasting and Telecommunications Commission (NBTC) for which it has to make a licence fee payment to the regulator.

Another dispute concerns Thaicom's deorbiting of the Thaicom 5 satellite in February 2020 before the concession expires.

The ministry demands Thaicom build and deliver a replacement satellite for Thaicom 5 or pay compensation of around 7 billion baht if it cannot do so.

Thaicom argues the ministry was informed in advance about the satellite's lifespan before it was approved for launch. The firm also indicated it consulted with the DES Ministry and NBTC seeking approval before deorbiting the satellite.

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