Telenor Ready To Support Thai TAC's Expansion -TAC Chief

BANGKOK -(Dow Jones)- Telenor is committed to providing financial and technological support to Total Access Communication PCL as the Thai mobile phone operator gears up for network expansion and third-generation services, TAC's top executive said Wednesday.

Sigve Brekke, TAC's chief executive, said Telenor also has enough money to buy the remaining shares of TAC and UCOM in tender offers after the Norway's telecom giant boosted its stake in UCOM last week.

Telenor's 49%-owned affiliate, Thai Telco Holding Ltd., Thursday bought a 39.9% stake in UCOM, TAC's parent, for a total of THB9.2 billion ($225 million). The move sets the stage for a joint tender offer by Telenor's Singapore unit, Telenor Asia Ltd., and Thai Telco for all remaining shares in TAC, Thailand's second largest mobile phone operator in terms of subscribers after market leader Advanced Info Service PCL. On its own, Thai Telco will offer to buy the remaining shares in UCOM.

Meanwhile, Singapore-listed TAC will continue to pursue its plan to also list its shares on the Stock Exchange of Thailand, Brekke said.

"Telenor has been in Thailand for five years...The company is showing the long-term commitment in the country," Brekke said.

TAC will file the listing proposal to the Securities & Exchange Commission by the end of this year and the public offering is likely to take place next year, Brekke said.

To compete with Advanced Info, TAC aims to expand its network to cover 95% of the Thai population in the coming years from 90% currently, Brekke said.

"This year we've spent a lot of money in capacity upgrade, and next year we will grow our network," he said.

The company set aside THB11.50 billion as capital expenditures for this year.

Brekke declined to specify an investment budget for 2006, but said TAC will fund the planned expansion with its cash flow.

He said TAC may need capital and technological support from Telenor, when it begins providing 3G services, he said.

Private operators are expected to get licenses for 3G services from newly-established regulator National Telecommunication Commission by the first half of 2006.

Despite the greater presence of the Norwegian firm, Brekke said Telenor has no intention of changing the company's strategy and management.

"There won't be any layoffs," he said, adding he wants to head TAC for at least three to four years.

Brekke also said TAC will try to avoid getting into price war, like it did earlier this year.

"All operators were really hurt from the price war, and the networks were really messed up," he said. "We will not start a price war, but if competitors start, we will follow."

-By Rattaphol Onsanit, Dow Jones Newswires; 662-266-0744; rattaphol.onsanit@dowjones.com

-Edited by Leslie Shaffer

(END) Dow Jones Newswires "

Posted to the site on 26th October 2005