TAC vice- president for corporate finance Wong Fan Voon told Reuters in an interview the company had 960,000 subscribers by June and expected closer to one million by the end of the year.

The company was losing subscribers -- its ``churn'' -- at the rate of about 15 per cent a year due to the economic slump, from just 2.5 per cent a year in 1997. But these losses were more than balanced by new accounts, he said.

This gave TAC, a Singapore-listed unit of Thailand's United Communication Industry Plc, 45.6 per cent of the Thai cellular market, just behind its main rival Advanced Info Services

``We expect year-on-year growth in terms of net cellular subscribers of eight to 12 per cent,'' he said. ``We think this is going to be the case for the next two years.''

``We still have net growth. People wereconcerned we might actually get negative growth, but we haven't seen that.''

Thailand is deep in recession and the government expects the economy to contract seven per cent this year after minus 0.4 per cent in 1997. But the mobile telephone market is still tiny and only 3.4 per cent of the population have handsets.

TAC had a turnover of 12.9 billion baht ($331 million) in 1997 and revenue of 7.2 billion for the first six months of 1998. Based on this, Wong expected full-year 1998 revenue to be 14.4--14.5 billion.

``If I extrapolate, I would finish at about 14.4-14.5 billion baht...There is no reason for me not to expect it,'' he said.

Wong said the company was ``actively'' talking to potential foreign partners about the possibility of at least one of them taking a significant stake in the business.

He declined to say how many potential investors TAC was talking to but indicated they were likely to be large, foreign, fixed-line firms with deep pockets.

``Local firms are not in a position to comein,'' he said.

In the past British Telecommunications Plc and Singapore Telecom have both indicated potential interest in Thai telecoms. TAC is widely seen as one of the most likely targets for any foreign investor.

TAC has debts of more than $1.1 billion but they are manageable with long maturities following a recent debt-rollover and the company is strongly cash-positive.

Wong said another reason for seeking a foreign partner was that successful telecoms companies in the future would need to span both cellular and fixed-lines.

``We need a partner to come in. We are saying we don't want to look five to 10 years down the road and say we are still going to be just a cellular operator,'' he said.

But he said there was unlikely to be any concrete agreement before Thailand's telecoms regulatory environment became clear. This could mean no news for another six months or so.

Transport and communications minister Suthep Thaugsuban told Reuters on Thursday the country's telecoms privatisation bill, due tobe passed in October, might be delayed into 1999.

The bill is due to lay down the ground rules for the liberalisation of the Thai market and few foreign companies will want to commit themselves to investments before they are known.

``A lot depends on the deregulation,'' Wong said.

``The foreign partners are also hesitating because they want to see what is happening,'' he said. ``There is no point for them doing too much of the work now.''