Fitch Ratings today said that it remains concerned about regulatory and political risks affecting Thai telecom operators, although a recent government proposal to convert 2G concessions to a licence scheme could be a positive step in resolving some of these uncertainties.
Also, the agency expects the proposal to create a more level playing field among private mobile operators.
In a statement, Fitch noted that, if the concession conversion involves a significant lump sum payment in return for a lower regulatory cost structure and a longer operating period, this could result in an increase in net debt and financial leverage for private mobile operators; though this should improve their cost structures in the long run.
These operators also face significant 3G development costs which could result in an increase in leverage in the medium term. The agency expects limited rating impact as most operators are financially strong.
Tighter scrutiny of foreign ownership restrictions and the pending review of past concession amendments are other issues which could potentially affect the private mobile operators.