Telenor: Political Risk coming home to Roost

Telenor owns 70% of the #2 Mobile Operator in Thailand, DTAC. A coup d’etat took place in Thailand in 2006 overthrowing the allegedly corrupt Prime Minister and previous owner of the #1 Mobile Operator.

Yesterday, the military ruled that all the mobile concessions are illegal and have to be renegotiated. The Communications Minister was quoted in the Bangkok Post:

“We expect the entire process to be completed within 180 days. It's my dream that all concession contracts be made the same. In reality of course, that might not be the case. But at least, each player will pay 30% in revenue sharing. The incentive we are offering is to make everything comply with the law. No one will be able to request money [under the table] from the operators again.''

Comments like this make me wonder if Telenor were involved in the “under the table” practices. More importantly, yet again it highlights the political risk associated with many of Telenor overseas assets.