"Therefore, it depends on Temasek if it wants to sell only its ShinSat shares to us," he said, adding the government was expected to reach a conclusion within three months on the option to take back ShinSat's satellites.

The minister will meet next week with the panel appointed to examine the satellite concession contract with ShinSat, and whether it complies with relevant laws, as part of preparing information for a ShinSat share purchase by the government.

He said the government had to proceed carefully between the two options - buying ShinSat shares or seizing control of the satellites - as part of its attempt to regain the satellites from a foreign entity.

Telecom analysts said even if the government could prove Kularb Kaew was a nominee for Temasek to take over Shin, ShinSat would not be deemed a foreign-controlled firm. That is because Shin owns only 41.34 per cent in ShinSat.

The telecom law and foreign business law each caps the foreign shareholding in the telecom sector at 49 per cent.

But Sitthichai argued that previously Shin had owned 51 per cent in ShinSat before diluting its stake to the present level when ShinSat raised capital in 2005.

Sitthichai said the dilution allegedly did not go to Cabinet for approval.

And according to the ShinSat concession, Shin had to retain its stake in ShinSat at around 50 per cent until the concession period expired.

Meanwhile, the National Telecommunications Commission urged the government to carefully consider both the legal issues and effect on services of any move to buy back shares in ShinSat or revoke the concession for the country's sole satellite operator.

"The government needs to cautiously consider whether it is worth taking back the satellite concession," the NTC said in a statement yesterday.

The telecommunications industry regulator also downplayed concerns about the security of military communications, saying the satellites operated by the company were not meant for military purposes and most clients were foreign.

Among the key issues the government should take into account were the continuity and competency in the satellite concession's management, given the intense competition in the satellite industry, the NTC said.

"If state agencies take charge of the business, they might not be able to compete. It needs to rely on the strength of the private sector to take care of the business," the commission said.

ShinSat has four satellites in orbit, two of which are about to be retired, and only a handful of domestic customers.