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Norway sounds alarm over new Thai telecom rules

Norway has become concerned that draft rules to prevent foreign domination of Thai telecom operators could affect the rights and interests of foreign shareholders of Thai telecom firms. An analysis has been made by UBS Investment Research. This says that, if read literally, the new Thai National Telecommunications Commission (NTC) regulations appear to prevent any form of foreign control over a Thai telecom operator.

One of Thailand 's leading telecom service providers Total Access Communication (DTAC) is 32.9% owned by Telenor Asia, in turn a wholly owned subsidiary of Norway 's largest telecom service provider Telenor. Complicating the issue is Telenor Asia's 25% stake in DTAC's parent, United Communication Industry (Ucom), and its 49% ownership of Thai Telco Holdings, which controls 61% Ucom.

Norway has informed NTC that a proposed draft relating to share ownership "unfairly prejudices the rights and interests of foreign shareholders of Thai companies as well as foreign companies."

Perhaps even more crucially than DTAC, Thailand 's best-known communications company, Shin Corporation, is likely to be affected by the new NTC regulations governing foreign dominance. Singapore 's Temasek Holdings owns Cedar Holdings and Aspen Holdings, in turn holders of 51.98% and 44.14% of Shin.

A key difference is between ownership and control. Under current Thai law, the multi-tiered shareholding structures that give Telenor control of DTAC and Temasek control of Shin are legal. Neither DTAC nor Shin is considered 'owned' by foreigners, although both are mainly 'controlled' by foreigners.

The UBS Investment Research report says that if that happens DTAC would probably be at risk, because it is quite clear in terms of management structure that Telenor ultimately controls the company.


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