Military not happy with PPP win

Bangkok Post (25 December 2007)

The result of the election has upset the military's top brass, including army chief Gen Anupong Paojinda, who are worried about the People Power party (PPP) taking revenge for the Sept 19 coup last year. The uneasy atmosphere in the barracks was revealed yesterday by military sources as the PPP, a reincarnation of the Thai Rak Thai party (TRT) toppled by the coup, moves closer to coming to power. Top officers are worried, particularly about their futures in the military reshuffle next year.

Gen Anupong suddenly became irritated when asked by reporters to comment on what would happen to the army under a PPP-led government.

''I'll not answer. I'll say nothing,'' the army chief said.

Gen Anupong, one of the key men in the coup, had earlier said he would not be worried if the PPP forms the next government and ruled out the possibility of another coup.

He made it clear when he assumed the top army job in September that the army would not interfere in politics, a stance which earned him the tag of ''good guy'' from PPP leader Samak Sundaravej.

Analysts expect Gen Anupong to lead the army until the military reshuffle in September next year and then be transferred to head the Supreme Command or to become permanent secretary for defence.

Outgoing deputy prime minister and former chairman of the Council for National Security (CNS) Gen Sonthi Boonyaratkalin could also be prevented from playing any active role in politics, a military source said.

Gen Sonthi reportedly rushed off to meet Privy Council president Prem Tinsulanonda late at night on election day. Gen Sonthi led the coup group which toppled prime minister Thaksin Shinawatra, who was alleged to be involved in massive corruption, as Mr Thaksin was attending a United Nations meeting in New York.

Other CNS members, including air force chief ACM Chalit Phukphasuk, permanent secretary for defence Gen Winai Phattiyakul, navy commander Adm Sathiraphan Keyanont, supreme commander Gen Boonsrang Niampradit and deputy permanent secretary for defence Gen Saprang Kalayanamitr, may escape any retribution from a new government as they will retire next year.

Some military sources said a PPP-led government, if successfully formed, would not resort to harsh action against the military because it would lead to a serious conflict. However, there will be changes at the top in the military.

Thaksin-backed party takes lead in polls

Business Times (24 December 2007)

FIFTEEN months after being ousted by the military in a coup d'etat, the party backed by former prime minister Thaksin Shinawatra, has taken a lead in Thailand's much awaited general elections

The People's Power Party (PPP), which is closely associated with Dr Thaksin, looks set to get the first chance to form a government. Early indications suggested that the party could secure more than 230 seats out of the 480 seat Thai parliament.

'We are going to form the government as we have the largest number of seats, and we hope to have the decision by early next month on which other party would join us,' Samak Sundaravej, the leader of the PPP said at a press conference.

He added that he wanted the Election Commission to announce the results soon, so as to allow a government to be formed.

Mr Samak in the past had said that he wanted the self-exiled Dr Thaksin to return to Thailand and fight the legal cases against him, along with granting a general amnesty to the 111 members of Dr Thaksin's now defunct Thai Rak Thai party.

The PPP leader said that his party aims to have at least 300 seats in Parliament. He would also like to have allies among other parties, he added, so that the government would be more stable.
Mr Samak also cast doubt on the early polls conducted on Dec 15 and 16 when close to three million people took part, including about one million in Bangkok alone.

'From the exit polls we had on those two days, it was evident that we were in the lead but we have our suspicions now as the results in Bangkok look very different from those that we had anticipated,' he said.

'We will investigate this and inform in the future,' Surapong Suebwonglee, the party's secretary-general said.

Meanwhile, the PPP's biggest opponent, the Democrat party, said that it was willing to accept the results and as the PPP has invited parties to join it in forming a government, the Democrats would wait for the PPP to try its luck first. If the PPP fails, they will then look into ways to form a government. The Democrat party ruled out joining the PPP team.

Military installed Prime Minister Surayud Chulanont said that it was time that the people's voice was heard and that a government should be formed as soon as possible.

'I would like to request that all parties should accept the results, as the outcome is the wish of the people and we have to listen to their voice,' Mr Surayud said.

He added that a lot of work still needed to be done before a new government could take office, noting that the PPP, while being in the lead, is still short of a majority.

Mr Surayud stressed the need for reconciliation in Thailand so that the country could move forward. He urged the people and political parties to heed the message of Thailand's King Bhumibol Adulyadej, who has called for national unity.

Commenting on the ongoing cases against PPP that could lead to its dissolution, he said that the process should be left to the justice department and nobody should intervene.

'The justice system should not be intervened in and we have to leave it to the department to make its own decisions,' he said.

Some leaders of Thailand's smaller parties - such as Sanoh Theinthong of the Pracharaj Party - attributed the success of the PPP in this poll to the failure of the current government and the military.

As at 10 pm local time last night, the PPP was leading with 232 seats. The Democrat Party had 162 seats, the Chartthai Party 40 seats and the Puea Pandin had 24 seats.

Official results will be known in a month's time although the Election Commission indicated that it will announce them as soon as possible.

Stability of next govt seen as crucial

The Nation (25 December 2007)

Concern over restoration of confidence
The business sector is worried about the stability of the next government and fears the election results are unlikely to revive confidence as soon as expected, because they could lead to further political tension regardless of which party takes power.

Since the People Power Party (PPP) appears in the best position to form the coalition government, businessmen also warned that it must be careful in terms of public spending to finance its populist policies.

Sunday's election saw a close result in the proportional representation votes. And even though the PPP won the most seats overall, it did not win a clear majority and has yet to form a coalition.

"Trade and investment are likely to slow down further next year," said Marco Sucharitkul, president of JP Morgan Securities (Thailand). "The new government is unlikely to push for big policies because the political tension is set to continue even after the election."

The unofficial vote result gave the PPP 232 of the 480 seats in the lower House. The Democrats came second with 165 seats, followed by Chart Thai with 37 and Puea Pandin with 25.

Federation of Thai Industries (FTI) chairman Santi Vilassak-danont is concerned that economic confidence will be shaken, no matter who forms the new government.

If the PPP forms the government, opposition could arise, he said. In that scenario, the economy would suffer from lower confidence as the private sector prefers a stable government which can ably lead the country out of tough times.

"The voting result could pose some problems to national administration due to the opposition's numerous demands. This could rock the new government. However, if the Democrat Party becomes the core coalition party or becomes part of the government, opposition should be nil at the beginning, but internal conflicts could occur after a while," he said.

"If any party forms a government and makes the public lose more confidence, I do not think it should remain the government then."

He believes that if the Democrat Party takes power, it will hurry to produce results because it wants to create a good image and boost public confidence in the party.

Santi said foreign investors were eager to know who would be the next prime minister. If economic ministers are acceptable, this could restore confidence.

Pramon Sutivong, chairman of the Board of Trade of Thailand, said he was worried about the new government's economic policy.

"The new government should be careful in implementing economic policies, especially populist ones because revenue might not be sufficient to finance these policies, even though they have both good and bad consequences."

Pramon called for policies to increase people's income to be accelerated.

On an amnesty for the 111 banned Thai Rak Thai politicians, he said: "The new government should respond to people's needs, not satisfy its own agenda. The amnesty might erode people's confidence here and abroad."

Poj Aramwattananont, chairman of the Thai Frozen Foods Association, agreed, saying the new government should focus instead on resolving political conflict and the violence in the South.
Tanit Sorat, chairman of the FTI's committee on transport, transportation and logistics, said the private sector did not expect much from political developments.

"Everything has changed. We believe the economy can continue to grow under the pressure of political turmoil," he said.

"We have to watch the decisions of Puea Pandin and Chart Thai," said FTI vice chairman Nipon Surapongrukchareon. "If they join in a PPP-led coalition government and People Power leader Samak Sundaravej is appointed as prime minister, he will need to adjust his points of view in order create harmony among the parties."

However, he said the PPP's team seemed to be too weak to handle the tough economic problems and should recruit economic experts to build confidence among local and foreign investors.

Wichian Mektrakarn, president of cellular operator Advanced Info Service (AIS), said he would welcome any government as long as it is democratically elected. He insisted AIS had a clear stance of staying out of politics.

AIS is the flagship of Shin Corp, which was founded by the family of ousted prime minister Thaksin Shinawatra.

Darmp Sukontasap, Tesco Lotus senior vice president, said the high turnout for the election was encouraging. "This indicates that most Thais are looking forward to greater political and economic stability following the election," he said.

"In my view, the most urgent task for the new government is to restore investor and consumer confidence and get the economy back on track. Of course, political stability will have to come first. It is the only way the new government can effectively implement its policies."

Central Retail Corp CEO Tos Chirathivat said the private sector wanted political stability as the most significant factor in raising consumer confidence, domestic consumption and foreign investment.

"Any legislation and regulations, such as the foreign business and retail business laws to be considered by the new government, should be clear and certain so that firms can make business plans effectively," Tos said.

Chumpol Saichuer, chairman of the Thai Logistics Alliance, said the PPP might have more advantage in forming the new government than the Democrats as its populist policies had been proven over time.

However, investors' reaction to whichever party formed the government depends on which has a better economic leader and policies.

"The SET [Stock Exchange of Thailand] Index could be an indicator of which party would be welcomed," he said.

Krisada Chavananand, president of the Palm Oil Crushing Mill Association, said that whichever party formed the new administration should try to look ahead to create economic value.

The new government should also continue any projects that are beneficial to the country. "I hope not to see any doom-and-gloom situation in the forming of the new government," he added.

United Overseas Bank (UOB) Economic-Treasury Research said in a release that the aftermath of the election and the future of Thailand remained far from clear-cut.

Major risks ahead continue to impair the outlook for the economy. With projected 2007 growth in gross domestic product of 4.5 per cent, Thailand has lagged behind regional rivals like Indonesia and the Philippines due to political uncertainty.

The election had been hoped to turn the country's economic fortunes around, but domestic consumption and investor sentiment will likely to remain shaken for the first quarter of next year, and will recover only when a stable government can be formed and economic policy spelt out in the second quarter, the UOB unit said.

So far, markets have responded cautiously - the onshore baht rate was largely unchanged at 33.69 to the US dollar, compared with 33.71 on Friday. The SET rose 2.8 per cent on Friday in anticipation of a clear electoral outcome but is likely to reopen mostly lacklustre tomorrow, given the uncertainty about the next government.

The Association of Thai Travel Agents wants the new government to work more closely with the private sector and cater to tourism developers' needs, said president Apichart Sankary.

"Previous governments focused on tourism because it was a key sector for the economy. But they never worked to close to tourism operators. The country's tourism development could still fail," he said.

He said the association wanted electronic visas on arrival for foreign visitors, which are faster than manual immigration and more efficient too, and for work permits to be issued to foreign tour guides, particularly Koreans, Russians and Arabic speakers. It also wants the tourism portfolio to be under the prime minister.

One-Two-Go and Orient Thai airlines chief executive Udom Tantiprasongchai said the country could attract more than 20 million tourists a year in the near future, nearly double the current number, but the government has to encourage private development.

"Look at Malaysia, for instance. It gets almost 20 million arrivals a year, and there isn't that much to do [there] when compared with the tourism products and services we have. This success is because of government help," Udom said.

True wants new spectrum

The Nation (24 December 2007)

True Corp is asking the national telecom regulator for a new cellular spectrum to ease congestion on its subsidiary True Move's 1,800-megahertz band.

True Corp subsidiary Samut Prakan Media reapplied for the spectrum. With more than 12 million subscribers, True Move's 12.5-megahertz bandwidth of the 1,800 megahertz spectrum is almost saturated.

National Telecommunications Commission secretary-general Suranan Wongvithayakamjorn said the commission had no cellular spectrum available.

He said Samut Prakan Media would have to share spectrum as per regulations that took effect in July.

These pave the way for telecom operators to request commission permission to either transfer rights and duties of spectrum to other operators or use others' spectrum.

The regulations aim to reallocate existing spectrum for maximum utilisation.

Sharing plans need to be approved by the commission.

A True Move source said the company had asked Total Access Communication for the use of DTAC 50MHz-bandwidth, 1800MHz spectrum. DTAC declined, the source added.

DTAC uses the 800MHz spectrum, too. It wants to secure use of 900MHz spectrum from Advance Info Service (AIS). This frequency allows AIS to roll out provincial networks at lower cost than for 1,800MHz.

Telecom industry sees a mixed 2008

The Nation (25 December 2007)

The telecom industry is optimistic about growth in consumer spending on cellular services next year but has little hope of any progress on licences for new technology.

With the expected return of consumer confidence after the general election and rising number of subscribers, one telecom analyst forecast that spending on cellular services next year would grow by 11.6 per cent from the roughly Bt151 billion expected this year.

Advanced Info Service (AIS), the biggest cellular-service operator, conservatively forecast that such spending would reach Bt159 billion, versus Bt151 billion this year and Bt144 billion last year. The total number of mobile-phone connections is expected to reach 64 million next year, up from 52 million by the end of this year.

Sigve Brekke, chief executive of industry No 2 Total Access Communication (DTAC), is upbeat that the industry will see revenues growing strongly again after low growth in the last three years due to price wars.

Meanwhile, True Move chief executive Supachai Chearava-nont sees next year as a time to tap different market segments, not for price wars.

DTAC chief commercial officer Thana Thienachariya said the competition among cellular operators would shift from acquiring new users to maintaining existing customers in response to the virtual maturing of the market.

AIS has more than 23 million subscribers, DTAC more than 16 million and True Move more than 12 million. There are also more than one million broadband Internet subscribers in Thailand, of whom 600,000 are with True and around 200,000 with TOT.

On the regulatory side, AIS president Wichian Mektra-karn summed up his view of the industry next year in two words: "a mess".

He said the National Tele-communications Commission (NTC) had yet to grant the long-awaited new spectrum licences for third-generation (3G) or WiMax broadband wireless to telecom operators so that they could invest in the new technologies, which would boost the economy. Cellular operators hope to use the broadband wireless technology to offer new data services and boost revenue.

And even if the NTC does grant WiMax and 3G spectrum licences next year, these wireless broadband services will not be widely adopted before 2009, according to Kaneungjit Suriyathumrongkul, senior director of business development of Qualcomm Thailand, a market leader in the Code Division Multiple Access (CDMA) 2000-1x cellular technology.

NTC commissioner Setha-porn Cusripituck said the NTC expected to issue the 3G and WiMax licences next year. The regulator is in the process of hiring UK firm Interconnection Communications as a consultant to draw up the licensing terms and conditions for the 3G spectrum.

"We need time to carefully consider the number of licences and the allocation method to ensure maximum national interest," he added.

However, a telecom expert said he did not expect to see the NTC launching new spectrum licences or risking the possibility of legal action because it was supposed allocate telecom and broadcasting spectrums jointly with the yet-to-be formed National Broadcasting Commission (NBC).

The formation of the NBC was stalled in 2005 after the Central Administrative Court nullified the selection of 14 candidates for the seven posts because the selection process was unconstitutional.

Brekke of DTAC expects both 3G licences and mobile-number portability policy next year. These will drive the industry in the right direction towards a liberalised, level playing field, he said.

Number portability means telecom subscribers can keep their existing phone numbers even if they switch to another network.

Besides waiting for the new cellular licences, the industry has an existing problem to clear: the conflict between the NTC's interconnection fee regulations and TOT's access charge regulations.
The NTC imposed the interconnection regulations in November 2006; they require telecom operators to share voice and data revenue from calls between their networks on a fair basis under bilateral agreements. The more one network sends out call traffic, the greater the interconnection fee it has to pay to the receiving network.

This means that telecom operators whose networks get dumped with incoming traffic will be compensated. The high interconnection fee will also discourage telecom operators from dumping call traffic on other networks.

TOT opposed the regulations after DTAC and True Move stopped paying access charges to TOT and adopted the interconnection regulations instead. TOT retaliated by filing civil suits to demand from DTAC and True Move a combined overdue access charge of more than Bt14 billion.

The access charge is what DTAC, True Move and Digital Phone Co, all CAT concession-holders, have paid TOT to connect through its facilities. TOT earns more than Bt14 billion from access charges each year.

TOT also filed a lawsuit in the Central Administrative Court to revoke the interconnection regulations, citing the effect on its business. Many in the telecom business expect it will take years before a ruling is delivered.

AIS is not subject to the access charge because it holds a TOT concession. However, it is also feeling the impact of the access-charge dispute because TOT does not allow it to book interconnection revenue. AIS is estimated to earn net revenue of between Bt2 billion and Bt3 billion from interconnection fees per year.