Thailand has threatened to ban foreign-owned mobile phone operators which government leaders suspect could be bugging their mobile phone conversations, regional media have reported.
Government ministers have promised an investigation, and threatened to revoke the licences of telecoms operators caught eavesdropping.
"The armed forces are currently experiencing a problem. We pick up the phone and the line runs to Singapore. We can talk about confidential official matters, but it goes to Singapore," Thai junta leader Sonthi Boonyaratkalin alleged in a speech earlier this month, according to Singapore's Straits Times.
Thailand's largest mobile phone operator, Advance Info Service (AIS), was taken over by a company close to Singapore's government last year.
Some Thai leaders have since switched to other mobile phone firms or even to using walkie-talkies, local media reports say.
Although AIS is controlled by an ostensibly private Singaporean company, Singapore's government has responded to the Thai allegations.
"It does not make business or technical sense to route domestic calls via another country. Doing so will incur additional and unnecessary network resources and degrade the quality of service," said a Singapore Foreign Ministry spokesman, according to Singapore's Today newspaper.
"Singapore maintains a strict and professional operating environment to safeguard the integrity of all communications which terminate in or transit through Singapore."
Exacerbating the dispute has been Singapore's cordial treatment of deposed Thai prime minister Thaksin Shinawatra, who visited Singapore this month and met unofficially with the deputy prime minister.
Shinawatra was removed last year in a bloodless coup by the current Thai military junta, following widespread protests against his rule in the capital of Bangkok.
AIS is part of Thailand's giant Shin Corporation, founded by Shinawatra in 1987. Shinawatra guided the company as it grew to become Thailand's largest new telecoms firm, but transferred his controlling shares in the company to family members and employees when he took office in 2001.
As well as controlling AIS, Shin Corporation has substantial stakes in a major Thai TV station, a satellite communications company and an airline.
Shin Corporation was taken over by Singapore government-linked Temasek Holdings last year in a $1.9bn deal.
The Singapore firm used various intermediaries and holding companies to bypass a 49 per cent limit on foreign control of Thai telecom firms.
The tax-free sale added to Shinawatra's growing unpopularity with urban and middle-class Thais, and provided further impetus for his removal.
While Temasek is technically independent, the giant investment company is in fact closely linked to Singapore's government.
The Singaporean president has power of veto over its chief executive and board member selections, and the incumbent chief executive is the president's wife.
These close government links have added fuel to the security concerns in Thailand.
Thai junta threatens foreign-owned mobile firm
By Simon Burns on Jan 30, 2007 9:42AM