Thailand - policy delays

On hold, as usual

Thailand's telecommunications industry continues to be a casualty of politics, to the point that poor neighbours Laos and Cambodia today can even boast some technologies and services that Thailand lacks.

Attempts to develop third-generation or 3G mobile services in Thailand began several years ago but only this year were the first baby steps take. The excuse, as it has been for nearly 10 years now, was the lack of a national regulator to oversee the converged fields of telecoms and broadcasting.

The four-year-old National Telecommunications Commission (NTC) has steered the industry with some success, but refuses to issue 3G licences because they involve a broadcasting component that it is not in a position to regulate. This was supposed to be the job of the National Broadcasting Commission or NBC, which has never been formed.

However, in the new environment stipulated by the Frequency Management Bill, a single regulator will handle both telecommunications and broadcasting licensing. It merge the existing NTC into a new National Broadcasting and Telecommunications Commission (NBTC).

The NBTC will have 10 members _ two each from radio and television, four from telecommunications, and two qualified experts. The cabinet will nominate the NBTC and then forward the names to the Senate for approval. The NBTC will then become the single national regulator under the present Constitution. The process is supposed to take three months. Then again, forming the NTC was supposed to take three months as well _ and that was back in 1998.

Because the bill is still undergoing legislative procedures, the NTC will do the job of drawing up the 3G licensing framework and allow operators to upgrade their networks using existing bandwidth.

The 3G licensing regulation is expected within the third quarter of this year.

NTC member Sethaporn Cusripituck said the regulator had received a positive interpretation from the Council of State, the government's legal adviser, on guidelines for telecom licensing.

In addition, the Council of State also said that since the NTC still did not have a table of frequency allocations, it could use the frequency allocation table of the International Telecommunications Union as a guideline.

The NTC has hired a British telecom consulting firm to study the Thai industry and devise a frequency table for allocation to operators to provide 3G services. The result of the study was expected at the end of June.

Thai Mobile, the struggling cellular joint venture of TOT and CAT Telecom, was allocated frequencies under the 2000 MHz spectrum to provide 3G since 1999. But Thai Mobile today is six billion baht in debt and the two state telecoms are still arguing about a sale that would allow one of them to control the business.

Political intervention in the boards of directors of both TOT and CAT Telecom was blamed on the failure of Thai Mobile in the past, as well as the huge interest that was involved in the operations.

But the current political instability could become a major deterrent to the smooth migration to 3G or mobile broadband services again.

Information and Communication Technology Minister Mun Patanotai has admitted that politics was main reason for a lack of progress, as well as disputes between state telecoms and their private concessionaires.

But he made clear that he would push for mobile broadband services within the next six to 12 months _ if the current government survives.

However, Mr Mun has given hope to private operators, who are taking tentative steps toward 3G while they wait for the legal and regulatory fog to lift.

Mr Mun admitted that TOT Plc and CAT Telecom could never compete with private operators in bringing out 3G services, citing the entangled laws and regulations on joint investment.

He pointed to Thai Mobile, held 58% by TOT and 42% by CAT, which has gone nowhere for six years _ it has fewer than 60,000 customers in a market of 55 million.

THis month CAT offered to buy back the 58% stake from TOT at 3.3 billion baht with payment over five years, countering TOT to buy CAT's 42% stake at 2.4 billion baht but with payment spanning 15 years. TOT subsequently offered a five-year repayment term but there have been no fresh negotiations.

The failure of Thai Mobile as a cellular service aside, it has highly valuable 3G bandwidth and a licence, with no need to await NTC licensing. But even if 3G could be launched by a state telecom, questions persist about the joint-venture model and the strategic partners.

Advanced Info Service became the first to launch commercial tests of 3G on the HSPA platform in Chiang Mai. It was also awaiting permission to import more HSPA equipment to expand services in other major cities, including Bangkok.

DTAC and True Move received permits to import HSPA only recently, or several months behind AIS, due to red tape in CAT which wanted them to accept three conditions first.

All of the conditions were accepted by DTAC and True Move: they must operate international direct dialling service using CAT's international gateway; DTAC has to allocate some of its 850 MHz bandwidth to CAT; and that they have to promote CAT services on the HSPA platform.

But although the private operators are jumping on the 3G bandwagon, they are reluctant to invest heavily due to the many restrictions on HSPA technology running on the existing networks.

AIS has made clear it would not invest further, while DTAC also was likely to await for new licensing that would be much more investment-worthy than just upgrading its present network to provide 3G services.