ICT Minister Sitthichai Pookaiyaudom said yesterday that if the plan were approved, the Finance Ministry would also announce a new rate for excise duty, which is expected to be far lower than currently.

"The new rate is expected to take effect in January," he said.

An industry source said the Finance Ministry had considered reducing excise for cellular operators from 10 per cent to 1 per cent, and for fixed-line operators from 2 per cent to zero.

Sitthichai said he could not predict whether the Finance Ministry would apply a uniform excise duty to both cellular and fixed-line operators, or two different rates.

"It's up to the Finance Ministry," he said, adding that the new rate would be very low, in order to ensure that operators did not pass on the burden to consumers.

The Thaksin Shinawatra government passed the excise-duty resolution in 2003. Under the levy, cellular operators have paid 10 per cent of their concession fees to the government before paying the remainder to their concession owners, TOT or CAT Telecom. Fixed-line operators have paid 2 per cent of their concession fees to the government and the remainder to TOT.

The method has cut into the revenues of both state agencies, which earlier had gained the full concession fee from their concessionaires.

TOT and CAT suffered concession-fee losses of Bt23 billion and Bt15 billion, respectively, from 2003-05.

The planned termination of the formula will see all telecom operators paying the full concession fee to TOT or CAT, plus the excise duty.

Executives of Advanced Info Service and Total Access Communication have made it clear they might have to pass on a rise in excise to consumers.

The two cellular operators have a combined 28 million mobile-phone users.

Sirivish Toomgum

The Nation