Up-Dated > Citing 4G Delay, Financial Times says Dictator Brings Economic Uncertainty

Financial Times, citing the delay in 4G spectrum auction, says, quote: “The junta’s action is the latest example of absolute rule that has brought economic uncertainty to the country since the May 22 coup, even as many investors have welcomed Thailand’s apparent stability after a debilitating six-month political crisis.”

The junta 4G delay comes after the junta put pressure on the regulator, where the local Thai language press reports the junta wants to “transfer regulator controlled funds that came from regulating the telecom industry, to the junta for usage.”

The delay of the 4G by the junta goes back to a group of appointed senators that staunchly objected to the 3G auction, based on a belief that the telecom regulator 3G spectrum auction plan would fetch an un-fair price for Thailand.

That group of appointed senators is an iconic corner-stone of the Bangkok elite establishment that is an arch enemy of the Shinawatra Family. The Bangkok elite establishment became “Deeply Involved & Interested” in Thailand’s business on a “Macro level” with Thaksin’s many “Macro Level” moves, such as the selling of his AIS that ended up in foreign hand and the privatization of many state enterprises. These “Macro Level” moves by Thaksin hit the Bangkok elite establishment sense of “Nationalism” negatively.

Thus, that negative reaction to Thaksin globalized and liberal economic out-look, the roots of Thailand’s economic nationalism was born.

The fall of the Shinawatra family, out of favor with the Bangkok elite, partially was the result of Thaksin decision to sell AIS, where no Thai offered to buy the firm, and the firm ended up in Singapore’s sovereign fund, Temasek hand. That Singapore ownership, out-raged the Bangkok elite establishment, as an important infrastructure of Thailand falling in the hands of foreigners.

Later, a staunch anti-Shinawatra telecom owner, who built up DTAC, also a Thai telecom firm, sold his firm to Norwegian interest, however, the sale of DTAC, escaped the “Traitor to Thailand” criticism Thaksin suffered, when he sold AIS.

(Up-Dated) Thailand’s junta has proposed the elimination of Thailand’s telecom and media regulator, and replace the regulator with Thailand’s state enterprise, telecom firm, such as TOT, know globally as draconian managed firms.

The following is from the Financial Times (source)

Thailand’s military rulers are stamping their mark on southeast Asia’s second-largest economy by shelving a planned mobile phone spectrum auction and handing down a string of other strategic diktats.

Shares in True Corporation, the telecommunications company in which China Mobile is taking an 18 per cent stake, jumped after analysts said the postponement of the 4G spectrum bidding round could hurt one of its two main rivals.

The auction delay is the latest in a series of interventions by the four-week-old junta in Thailand, ahead of the appointment of a civilian government later this year.

True shares rose almost 11 per cent on Tuesday after news emerged of the postponement of August’s 4G high-speed data auction, in a move the junta said was to ensure that the process was transparent. The stock retreated 2.6 per cent on Wednesday.

Shares in Advanced Info Service – which unlike True and DTAC, the third big operator, does not have existing 4G capacity – fell more than 3 per cent on Tuesday and closed another 3.15 per cent lower on Wednesday.

Citigroup analysts said in a note that AIS was the “most vulnerable” to a prolonged auction delay, while neither of its main rivals would be materially affected.

DTAC has problems of its own, however, after Norway’s Telenor – owner of a 42.6 per cent stake – issued a lengthy apology after angering the Thai generals by announcing it had been ordered to briefly block Facebook last month.

DTAC said it hoped doubts over the auction, which it wanted to join, would be cleared soon.

The auction hiatus is the second boost in a fortnight for True – backed by Thai billionaire Dhanin Chearavanont’s Charoen Pokphand Group – after this month announcing that China Mobile would take an $881m stake.

True and AIS did not comment on the auction delay, which also clouds the fate of a second 4G bidding round due at the end of the year.

The junta’s action is the latest example of absolute rule that has brought economic uncertainty to the country since the May 22 coup, even as many investors have welcomed Thailand’s apparent stability after a debilitating six-month political crisis.

The generals have twinned their crackdown on political dissent with arbitrary financial policy changes – including delaying spending on big infrastructure projects – ostensibly to combat the corruption that has plagued civilian governments.

But critics say the military itself has seen its share of graft and poor financial decision-making, with unexplained scandals including the purchase of hundreds of fake bomb detectors from a corrupt British businessman.

In depth: Thailand political unrest

Thailand has suffered its 12th coup since the establishment of a constitutional monarchy in 1932

The junta has taken hold of important levers of the economy, as senior executives at state enterprises resign and military officers build on their presence in corporate boardrooms.

The coup leader, General Prayuth Chan-ocha, has appointed himself head of the state body that oversees proposed domestic and foreign investments, while Air Chief Marshal Prajin Juntong oversees economic affairs for the junta and is chairman of Thai Airways.

The generals have also shown a taste for populist policy making, including an order last week for all football World Cup matches be shown on free television, in spite of a court order allowing RS Public, the broadcast rights holder, to screen more than half the games on a pay-per-view basis.

On Wednesday the junta said it would replace a disastrous rice subsidy scheme run by the ousted government with a new initiative focused on offering soft loans to farmers

Thailand’s central bank on Wednesday kept its main interest unchanged, forecasting that a probable economic contraction during the first half of this year would be followed by growth of 3.4-3.5 per cent in the second half.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s