GUAM TELECOM FIGHTS FOREIGN BID

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By Gaynor Dumat-ol Daleno

HAGÅTÑA, Guam (Pacific Daily News, June 29) - Japanese company NTT DoCoMo Inc.'s proposed purchase of GUAMCELL and HafaTel is being opposed by the Guam Telephone Authority (GTA), which says foreign ownership of the two wireless phone businesses on Guam "presents a risk to national security."

NTT DoCoMo would capture between 55 and 65 percent of combined market share on Guam for mobile radio and wireless phone services if the deal is approved, according to GTA's June 9 petition, filed with the Federal Communications Commission.

The US$72 million deal, which is going through the federal regulatory approval process, was announced in March and also includes GUAMCELL's Saipan counterpart, SAIPANCELL.

An FCC approval of the transaction would make NTT DoCoMo the dominant wireless provider on Guam and would be the first time a foreign government-owned company is permitted to become the dominant wireless carrier in a U.S. telecommunications market, according to GTA.

GUAMCELL management could not be reached for comment when contacted after office hours yesterday after the Pacific Daily News saw the GTA petition. HafaTel is expected to respond today.

In a June 22 letter to the FCC, NTT DoCoMo wrote, through Washington law firm Morrison and Foerster, that four of the company's executives met with federal regulatory authorities and explained why the proposed acquisition "serves the public interest."

GTA argues that Guam is much different than other U.S. telecommunications markets in that the island is home to Air Force and Navy bases.

"The level of ownership and control by the Japanese government in NTT DoCoMo calls for heightened scrutiny by the Commission and other agencies charged with protecting national security interests," according to GTA's petition before the FCC.

GTA states the Japanese government through the Japan Minister of Finance owns 38.37 percent of Nippon Telegraph and Telephone, and is NTT's largest shareholder, with the next largest shareholder of NTT holding 4.85 percent.

"In light of the key military installations on Guam and their strategic importance, denial of the application is appropriate to protect national security interests," according to GTA.

If NTT DoCoMo is allowed to go through with the deal, GTA wants the FCC to prohibit NTT DoCoMo from providing telecommunications contracts with the federal and Guam governments and their agencies.

June 30, 2006

Pacific Daily News: www.guampdn.com

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