Telecoms relief plan draws flak

Telecoms relief plan draws flak

Cabinet to consider proposal Tuesday

Under the plan submitted by the lame-duck National Broadcasting and Telecommunications Commission (NBTC) the prime minister will use Section 44 powers to delay payments for G4 licences won by the phone companies at auction.
Under the plan submitted by the lame-duck National Broadcasting and Telecommunications Commission (NBTC) the prime minister will use Section 44 powers to delay payments for G4 licences won by the phone companies at auction.

Opposition to the controversial relief plan allowing two telecom operators to extend payment for the 900-megahertz mobile spectrum has intensified ahead of Tuesday's cabinet meeting.

The cabinet is expected to consider the proposal Tuesday after Prime Minister Prayut Chan-o-cha put the brakes on it two weeks ago following criticism by the Thailand Development Research Institute (TDRI). The prime minister asked the NBTC for a written explanation how the relief plan benefits the public.

The NBTC last week submitted its justification to the cabinet, claiming the state will earn 3.6 billion baht from Advanced Info Service Plc (AIS) and True Corp as the operators will pay a 1.5% interest rate per year for the proposed five-year extension of their payment for the mobile spectrum, instead of lump sums in 2019 worth 59.5 and 60.2 billion baht respectively.

By allowing them to pay in instalments, the pair can free up funds to bid for the upcoming 1800MHz spectrum, instead of leaving it to third-ranked Total Access Communication Plc (Dtac), the sole contender, according to the telecom regulator. The NBTC move followed calls by AIS and True to seek more generous payment terms from the government through the use of Section 44.

TDRI president Somkiat Tangkitva­nich on Sunday criticised the relief plan, describing it as "strange logic" by the NBTC, apparently aimed at "carrying" the operators, as the pair have had shown no signs of financial difficulties running their businesses.

AIS has the largest market share with profits last year of 30 billion baht, while True, despite being far behind AIS, saw profits of 2.3 billion baht last year. The company's market share also increased significantly.

"If they are unable to pay in lump sums, they should be fined at a punitive rate of 15% a year stipulated in the contract, not the 1.5% the NBTC hopes to get," Mr Somkiat posted on Facebook.

Mr Somkiat also rejected the NBTC's claim that by extending the payments, both operators might take part in a planned auction of 1800 MHZ spectrum and the country would stand to benefit.

He said there was no word from the telecom firms on the issue and noted that it would even damage the country's credibility further if the payment extension was introduced in exchange for their participation in the planned auction.

Instead of taking place with transparency and in line with market mechanisms, the auction would be taking place as a result of negotiations," he said.

"What's more important than investors' confidence in a company is national credibility. If the government changes its policy, rules or conditions because of an unreasonable demand by some operators, it will tarnish the country's image."

Meanwhile, activists also slammed a proposal to use Section 44 to help the telecom operators. "The companies have no difficulty doing their businesses as both dominate the Thai telecom market. Therefore, there's no reason to provide them with assistance by offering them an interest rate of only 1.5%," former senator Rosana Tositrakul told a seminar on the issue Sunday.

"The public will not let you [NCPO] do this. They will question the legitimacy of the NCPO and its limitless use of Section 44 on the matter. If you don't stop it, this will have consequences."

Supinya Klangnarong, an activist and a former NBTC member, said the state was already at a disadvantage in 3G bidding, so it should make sure it benefits fully from the 4G auction. She also said it does not make sense to claim the government should help the telecom operators just as it plans to do for digital TV operators. Most of the TV operators recorded severe losses from licence payments, partly stemming from regulatory risk as opposed to the normal business risk which the two telecom giants are facing.

The seminar concluded the public is now questioning the real intention of the government's move to provide assistance for the two telecom giants and that the plan might have been put up in exchange for some kind of mutual favour.

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