The Information and Communication Technology Ministry will merge the boards of TOT Plc and CAT Telecom Plc, as a new means of boosting the competitiveness of the two state agencies and reducing investment redundancies.

"Both [state agencies] have tried to merge for years, but have failed to do so. So I must try a new way because the old methods have proven unsuccessful. The merged board will see how to improve the state agencies' competitiveness and share investment," ICT Minister Sitthichai Pookaiyaudom said yesterday when officially taking office.

Past governments have ordered the agencies to merge in order to foster their competitiveness and cut overlapping investments.

But the plans have not been realised, due mainly to staff protests and the lack of a serious push from the governments concerned.

Recently, senior executives of both agencies agreed that the Finance Ministry, which owns 100 per cent of both TOT and CAT, should set up a holding firm to supervise both agencies rather than merging them directly.

Later, the holding company should form a network company to lease cutting-edge networks to TOT and CAT, as well as to private operators, thus creating a new revenue source.

However, Sitthichai said he had instructed his deputy permanent secretary to devise a plan to merge the boards of CAT and TOT, as a matter of urgency.

"TOT and CAT will have to adapt to the change or they will become extinct, like the dinosaurs," he said.

Both agencies have been competing in the same businesses of overseas calling and mobile-phone services. However, the minister said this is not a negative thing, as long as their competition provides high benefits to consumers.

He denied that he would appoint his own people to the merged board.

"I don't want this to be part of a tradition that a new minister, when assuming his post, has to promote his people to the board. If you do that, existing board members will work in an atmosphere of worry," he said.

Sitthichai, who was once a member of the CAT Telecom board, said he was familiar with private telecom operators because he has been in the ICT industry for years. He said he would examine plans by the state-owned cellular operator Thai Mobile to invest in a 3G (third generation) broadband cellular business, to ensure that the investment involved is commercially viable.

Thai Mobile, which is jointly owned by TOT and CAT, owns a frequency band in the 1900MHz spectrum that is capable of being used for 3G services.

Currently, TOT is negotiating with CAT to buy CAT's stake in Thai Mobile. After that, TOT plans to roll out a 3G network for leasing to cellular operators.

Sitthichai said he had yet to work out whether both TOT and CAT should go ahead with plans to list on the Stock Exchange of Thailand.

"They can go ahead if it's good for them," the minister said. "But whatever they do must generate maximum benefits for the country. If they do list, we will have to work out how to prevent the majority of their shares from falling into hands of a small group of private investors."

He said he had yet to consider whether to continue the policy of past governments, of amending private concession contracts to promote fair competition between incumbent operators and newcomers.

Incumbent operators have complained that under the present arrangement they will lose their business advantage because newcomers can apply for licences from the national telecom regulator and the licence fees are lower than the concession fees of incumbent operators.

The minister also said he had yet to look into the details of the concessions of Shin Corp's businesses, which may be affected by Commerce Ministry investigations into alleged nominees in the Shin-Temasek deal. Some of these concessions were granted by TOT and the ICT Ministry.

Police are now investigating claims that Temasek used nominee companies to circumvent Thailand's foreign business ownership laws in the Shin Corp takeover.

They are working with material handed over by the Commerce Ministry's Business Development Department.

Usanee Mongkolporn

The Nation