PM calls early election as protests grow over $2bn mobile sale to foreign firm

Protests over the sale of Thailand's largest mobile phone operator to a Singaporean company are helping to fuel more widespread dissatisfaction with the country's controversial prime minister.

But despite complaints from Thailand's political opposition and calls for a boycott of Singaporean products, Singapore's government-owned Temasek Holdings is in the final stages of its $2bn takeover of Thailand's Shin Corporation, reports said today.

Shin Corp owns Thailand's largest mobile phone company, Advance Info Service (AIS), as well as a TV station, and also controls Thailand's main communications satellites.

Concerns have been raised by opposition politicians in Thailand about the sale of these significant communications assets to foreign interests.

Adding to the controversy is the fact that Shin is still controlled by the family of Thai prime minister, Thaksin Shinawatra, the company's founder.

In addition, the buyer, Temasek Holdings, is owned by the government of Singapore, and its chief executive is the current Singaporean prime minister's wife.

Singapore's government has repeatedly stated that it has no control over the investment decisions of Temasek, which it says acts as an independent company, despite being government-owned.

The sale of Shin Corp with its mobile phone arm, AIS, comes as profits begin to decline in Thailand's mobile market.

There is still room for growth, researchers say, as approximately half the 65 million population have yet to buy a mobile phone. Thai mobile market penetration is expected to hit 70 per cent in 2007.

However, intensifying competition for the remainder of the market means that Thailand's mobile phone operators will see average revenue per user fall some 30 per cent by 2007, according to recent research by the Wireless World Forum.

"In 2005, three out of four Thai operators saw their top line hit by falling average revenue per user. AIS and Hutch also experienced negative subscriber growth in the more lucrative post-paid market," the Wireless World Forum reported.

As its economy has boomed over the past quarter century, Thailand's democracy has had difficulty choosing a government that can bridge the gap between the country's better educated city dwellers and a more conservative rural majority.

While incumbent prime minister Shinawatra has proved popular with the rural poor, allegations of corruption and interference with the media have hurt his standing with the urban middle classes.

In the most extreme recent example of this dichotomy, an authoritarian government was forced out amid deadly street protests in Bangkok 14 years ago.

With protests against him growing due to the telecoms sale and other issues, prime minister Thaksin recently surprised the nation by setting an early election date of 2 April.