Mobile concessions may be illegal

Extensions and changes to mobile concession contracts by the two state telecom enterprises were illegal and could lead to the scrapping of all concession agreements, the Council of State has found after informally examining the 1992 Private and Public Joint Venture Law, according to a highly placed source. The source said that the council's informal findings indicate that its final ruling would be along these lines. This could prompt the Information and Communications Technology (ICT) ministry to formally ask the Council what can be done to resolve the problems, rather than simply asking for a ruling on the concession extensions.

The ICT ministry is scheduled to formally ask the Council of State today for a ruling on extensions and amendments of mobile phone concessions by TOT Plc and CAT Telecom, the source said. But instead of just asking the Council for a ruling, the ministry also wants recommendations on further action it could take, he said.

Commenting on the Council of State's informal interpretation, ICT Minister Sitthichai Pokai-udom said the ministry would ask the council two things in a letter expected to be sent today.

First, he said, was whether DTAC's transfer of 12.5MHz of bandwidth on the 1800 MHz frequency spectrum to Digital Phone and True Move to operate mobile phone services was legal.

Second, the ministry will ask if the extension of mobile phone concessions to private operators by the two state telecoms without prior cabinet approval complied with the 1992 Public-Private Joint Venture Law. If not, the government wants to know how serious the violation is and what action should be taken.

Mr Sitthichai said the ministry would ask the Council of State to rule on the matters quickly. He expects a reply within a month. He explained further that if the Council ruled that the two issues raised violated the law, then the law dictates that the contracts be scrapped.

An earlier option to seek retroactive rectification of the extensions and amendments of the contracts is still an option, he said. But if that happens, the minister said, the ministry should have a firm legal footing in explaining why the decision was made.

Mr Sitthichai said that scrapping the concession contracts would have to be done with caution because it could plunge the telecom industry, which is a public service that has operated under this system for years, into chaos.

However, he added, the wrongdoing also involved ''technical errors'' and misdeeds by former TOT and CAT Telecom executives. Private operators also share the guilt, he said, as they knew the laws.The extension of concession contracts in the past did not value assets for payment to the state, despite the fact that the contracts were granted on the basis of a build-transfer-operate approach.

Consequently, he said, each contract extension should reflect details of such asset valuations.

Mr Sitthichai said the ministry had no intention to cause a change in the industry to bring more revenue to the state, but just to correct any past wrongdoing.

Another source said that contract extensions were not raised in the cabinet for approval in the past because the cabinet came from a coalition of parties.

Therefore, forwarding the contracts of TOT and CAT Telecom to ministers might be inconvenient, he added.

From : Source: BKK Post
By : PLA
Date : Dec 26, 2006

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