INTERVIEW-Thai TAC upbeat on 3G, tough competition ahead

BANGKOK, Sept 2 - Thailand's Total Access Communication PCL (TAC) <DTAC.BK> is optimistic that a long-awaited auction of 3G mobile licences will take place soon, enabling it to tap a new revenue source from mobile Internet.

It could take around six to nine months for TAC <TACC.SI>, Thailand's number two mobile phone operator, to launch its high-speed Internet on a third-generation (3G) network once it got a licence, Chief Strategy Officer Roar Andreassen told Reuters.

"3G has been discussed in Thailand for at least five years now. We hope it will happen this year or maybe next year. I'm more positive that it will happen soon," Andreassen said in an interview on Wednesday.

The telecoms regulator plans to announce the terms of the auction for the 3G mobile licences by the end of this month, paving the way for the auction by the end of this year.

But repeated delays of 3G licensing in the past have made investors cautious. Operators have scaled down their investments, especially as the telecom market has been hit by the economic recession and sagging consumer consumption.

TAC, controlled by Norway's Telenor <TEL.OL>, has more than 19 million customers, about 30 percent of the Thai market. Advanced Info Service <ADVA.BK> has about 50 percent.

After the commercial launch of broadband Internet on a 3G network, the competition in the Thai telecoms market could become fiercer as fixed-line operators, for whom Internet connection is a key source of revenue, will step up their efforts to retain broadband customers, Andreassen said.

"The competition will be very tough and it's very challenging for us. There will be more competition from fixed-line operators," Andreassen said, adding it was too early to say whether it would escalate into a price war. ($1=34.00 baht)