Thailand Law Journal 2009 Spring Issue 1 Volume 12

The full competition was in the main focus since the establishment of WTO. Thailand is an original member participated in the Uruguay Round and in subsequent negotiations of telecommunications. The third phase began with the movement of market reform influenced by the country’s commitment to WTO. Although Thailand did not commit fully to open its market, it did commit in major principles of “WTO Reference Paper”¹⁰⁴ on basic telecommunication services, especially to introduce all necessary new communication acts, commencing from the year of 2006.¹⁰⁵ Then it was put in readiness for the 2006, the starting point of free market.¹⁰⁶ Two new major communication acts were enacted: “The Act on the Organizations to Assign Radio Frequency and to Regulate the Broadcasting and Telecommunication Services of 2000” and “The Telecommunication Business Act of 2001”. Despite the pro-competitive purpose of both acts, Thailand has no real experience in regulating competition. Indeed, the Trade Competition Act of 1999 has been enacted prior shortly to the two new telecommunications acts. Therefore, telecommunications market has been the pilot sector towards the free market and full competition. This was the first time of the market transforming into the level playing field. Interestingly, there is no specific provision for imposing specific access or interconnection duties on a specific operator like concessionaires or even the former agencies.

Today telecommunication industry has been reformed. It employs the ubiquitous model of competition: Policy maker, Regulator, and Operators. The policy maker of Thailand is the Ministry of Information and Communication Technology on behalf of the government. The regulator is the National Telecommunication Commission (NTC), which is one of the two pillars communication commissions.¹⁰⁷ Two telecommunication agencies: TOT and CAT, have been privatized in July 2002 and August 2003 respectively; however, their existing private concessionaires have succeeded to operate their ventures according to the transitory provision of the Telecommunication Business Act.¹⁰⁸

To illustrate Thailand’s telecommunication market today, it should be noted that there are no new entrants to the facilities-based competition.¹⁰⁹ In the sector of fixed-line services, in a broader term of telephone services, there are 6,670,768 nationwide lines, comprising of 3,239,182 metropolitan lines and 3,431,586 provincial lines, as of year 2005¹¹⁰ TOT was the sole fixed-line operator according to its former status of nationwide monopolist. TRUE was a TOT’s concessionaire for 2.6 million subscribers in metropolitan area¹¹¹; TRUE actually gained 58% of market share as of 2005.¹¹² TT&T was a TOT’s concessionaire for 1.5 million subscribers in provincial areas;¹¹³ TT&T actually gained 44% of market share as of 2005.¹¹⁴ These 3 operators have formed the fixed-line market in which they are marketing, but less intense in competing, due to its well-defined territories.

In wireless sector, Thailand possesses a strong competitive market of 3 dominating cellular operators. Every operator has succeeded its concession from TOT or CAT into the level playing field. AIS is the first and largest cellular operator succeeded from its exclusive concession of TOT’s 900MHz whole frequency band.¹¹⁵ It has approximate 32 million mobile subscribers in early 2006, AIS now maintains its market share of 52%.¹¹⁶ DTAC is the second largest cellular operator succeeded from its exclusive concession of CAT’s 800MHz and 1800MHz whole frequency bands.¹¹⁷ DTAC now maintains its market share of 30%.¹¹⁸ True Move, a subsidiary of TRUE Corporation, is the third largest operator succeeded from its CAT’s concession as divided from 1800MHz frequency band.¹¹⁹ True Move now maintains its market share of 15%.¹²⁰

Moreover, another 2 mobile operators has recently entered the market but were not successful. Hutchison CAT, a joint venture between Hutchison Telecom and CAT, began marketing CDMA2000 1x network services for 25 central provinces in Thailand. Hutchison CAT now maintains its market share about 2%.¹²¹ Thai Mobile is a created joint venture between TOT and CAT to operate the 1900MHz. They possess less than 0.5% of market share.¹²² In addition, CAT are ongoing to market its mobile service over CDMA2000 1x under the name of “CAT CDMA” for provincial areas other than those 25 central provinces.¹²³

Competition in wireless sector is intense, and coverage expansion projects have been continually introduced, approximately 1 billion dollars in total of every operator per year.¹²⁴ The number of subscribers have continuously increased and showed much higher growth in the last 5 years.¹²⁵ Penetration in major urbanized areas is approaching saturation, but rural penetration is about 20-30%. The Thai market has among the lowest voice rates in the world, 1.4 Baht average return per minute.¹²⁶ Even without the regulator until 2004, telecommunications growth in Thailand has been phenomenal 121.2% and 117.3% in the past two years alone.¹²⁷ Every operator has raced impressively in gaining higher market shares, especially for those big threes: AIS, DTAC, True Move. Although there has never been a change in ranks among these three operators, the portions of market share they possess have been getting closer every year.¹²⁸

As technology advancing and converging, the playing field is also expanding. Other facilities-based services such as satellite network¹²⁹, optical network¹³⁰, and cable TV¹³¹ had been affiliated by a few major private holding companies in order to offer complementary services and solutions.¹³² Other than the two former state-owned enterprises, there were 5 major Thai private holding companies: Shin,¹³³ UCOM,¹³⁴ True,¹³⁵ Samart,¹³⁶ and Jasmine,¹³⁷ competing in telecommunication industry.¹³⁸ Today the playing field has changed due to several factors; although there have been political and economic crises,¹³⁹ it is noticeable that the consolidation trend of business world is prominent and inevitable. Those holdings have been taken by foreign investors in different extents. However, the facilities-based operators are still the same faces according to their succeeding ventures under the transitory provision of the Telecommunication Business Act.

3.2 Sector-Specific Regulations on Thai Telecommunications

There are a number of provisions addressing in regard of telecommunications. The utmost provision is in the 1997 Constitution¹⁴⁰ which provides in Section 40 that:

“Transmission frequencies for radio or television broadcasting and radio telecommunication are national communication resources for public interest. There shall be an independent regulatory body having the duty to distribute the frequencies under paragraph one and supervise radio or television broadcasting and telecommunication businesses as provided by law. In carrying out the act under paragraph two, regard shall be had to utmost public benefit at national and local levels in education, culture, State security, and other public interests including fair and free competition.”

104 An regulatory guideline resulted in The Fourth Protocol of WTO/GATS as an optional commitment of each WTO member., see Boutheina Guermazi, “Exploring the Reference Paper on Regulatory principles”, Centre for the Study of Regulated Industries, McGill University, (Montreal), <http://www.law.mcgill.ca/institutes/ csri/paper-guermazi-reference.php3>.
105 World Trade Organization, “Thailand- Schedule of Specific Commitments, Supplement 2”. (GATS/SC/85/Suppl.2, 11 April 1997)
106 Bunaramrueang, Piyabutr. “Basic Telecommunication Trade in Services in the Framework of WTO and the Implementation of Additional Commitments in Reference Paper: Case Study of Thailand”. Thammasat University: Faculty of Law. LL.M. Dissertation. June 2005.
107 Another pillar organization is supposed to be National Broadcasting Commission (NBC); however, the new 2007 constitution have merged NBC and NTC into an agency named NBTC.
108 Telecommunication Business Act § 80
109 “Facilities-based” competition is often used in the telecommunications industry to describe competition between providers of the same or similar services, but where the service is delivered by different or proprietary means or networks. For example a broadband over power line (BPL) provider competing with a cable TV network to provide broadband Internet service is considered to be facilities-based competition. It is also called “infrastructure-based” competition. See Randal Picker, "Entry, Access and Facilities-Based Competition" (April 2004). American Law & Economics Association Annual Meetings. American Law & Economics Association 14th Annual Meeting. Working Paper 33, <http://law.bepress.com/alea/14th/art33>.
110 This is a total nationwide number in consideration that TOT has oversight of nationwide telephone servies, TOT Annual Report 2005 (as visited February 25, 2007), <http://www.tot.co.th/downloads/ report48EN_p007.pdf>
111 Formerly TelecomAsia Corporation, PCL. In 1991, TRUE entered into a build-transfer-operate (BTO) concession with TOT Corporation Public Company Limited (TOT) for a two million-line wireline network in the Bangkok Metropolitan Areas for a period of 25 years until 2018. In September 1995, TRUE were granted approval to expand its network by an additional 600,000 lines., see <http://www.truecorp. co.th/eng/about/about_history.jsp>
112 TRUE Corporation Q3 2006 Analysts’ Conference November 20, 2006 (as visited February 25, 2007), <http://www.truecorp.co.th/refweb/downloads/investors/3q2006/3Q06%20analyst%20conference%20(FNL)%20(11202006).pdf>
113 TT & T (Public) Company Limited has entered into the BTO agreement to jointly operate and invest in the project for expanding regional telephone network by 1 million numbers for 25 years (10/25/1993, to 10/25/2018). In September 1995, TT&T were granted approval to expand its network by an additional 500,000 lines, see <http://www.ttt.co.th/about/01_1historyen.html>
114 TOT Annual Report 2005, supra note 110, as implied from TOT’s data.
115 Advance Info Services, PLC has entered into the BTO agreement to operate mobile phone services under a joint operation agreement dated 27 March 1990, and subsequent related supplementary agreements. AIS has been granted an extension on the concession period from 20 years to 25 years, and the concession is to be returned in 2015., see <http://www.ais.co.th/>
116 Telenor, “DTAC”, Capital Markets Day 2006 – Presentation, <http://www.telenor.com/ir/presentations/ cmd06/pdf/cmd06_9_dtac.pdf>, as visited March 4, 2007.
117 Total Access Communication Public Company Limited or “DTAC” has entered into the BTO agreement, since August 1989, for 27 years to operate 800 MHz and 1800 MHz frequency bands under a concession granted by the Communications Authority of Thailand (“CAT”), see <http://www.dtac.co.th/en/aboutus/profile/ milestone.aspx>
118 Telenor, supra note 116.
119 True Move Co., Ltd. is a major subsidiary and affiliated companies in the True Corporation. True Move, formerly TA Orange, has entered into the BTO agreement, since March 2002, for a 1800MHz frequency band divided from DTAC, to operate under a similar concession period granted by the Communications Authority of Thailand (“CAT”)., see <http://www.truecorp.co.th/eng/about/ about_history.jsp>
120 Telenor, supra note 116.
121 Hutchison CAT Wireless Multimedia Ltd. is a joint venture between the Communications Authority of Thailand (CAT) and Hutchison Wireless Multimedia Holdings Limited. The company has been awarded a contract to provide marketing services for digital CDMA mobile telephone services for 25 central provinces in Thailand under a marketing services agreement which began at early 2003 until 2015, <http://www.hutch.co.th/h_press_CDMA_14_march_Eng.htm>
122 Thai Mobile is a joint venture between TOT and CAT to market mobile phone services over 1900MHz since March 2002., <http://www.thaimobile.co.th/About1.asp>
123 Telecomasia.net, "Thailand nears completion of nationwide CDMA rollout", <http://www.telecomasia.net/ article.php?id_article=4182>
124 Thairath, "DTAC reminded competitors not to play very hard in pricing but quality", <http://www.thairath.co.th/news.php?section=technology03b&content=21969>
125 Thairath, "Mobile subscribed number going up sharply", <http://www.thairath.co.th/news.php?section= technology&content=20637>
126 Telenor, supra note 116
127 Morse, Arthur, "The Growth of Telecommunications in Thailand", <http://www.connect-world.com/ Articles/2003/AP03-I2-05-AMorse.htm>
128 Telecommunication Insight, "DTAC Takes Market Share from Leading Thai Operator", <http://www.telecomsinsight.com/file/36954/dtac-takes-market-share-from-leading-thai-operator.html>
129 Shin Satellite Public Company Limited, originally called Shinawatra Satellite, it was founded on November 7, 1991 by Shin Corporation Plc. ("Shin"), which was granted a 30-year Build-Transfer-Operate concession from the Ministry of Transport and Communications (currently transferred to the Ministry of Information Communication Technology) to operate the national satellite project. The concession expires in 2021, <http://www.thaicom.net/default_main.aspx>. Moreover, there were 5 concessionaires of VSAT services: TOT - Acumen, CAT - Siam Sat Network and Worldsat Network, PTD - Samart Telecom and Compunet Corporation.
130 Comlink Co.,Ltd., and Thai Longdistance Co.,Ltd. were two concessionaires of TOT.
131 True Visions Public Company Limited (TrueVisions), formerly United Broadcasting Corporation Public Company Limited (UBC). TrueVisions was formed in 1998 by the merger of IBC and UTV. TrueVisions operates under a 25 year Build Transfer Operate (BTO) concession issued by the Mass Communication Organisation of Thailand (MCOT) which is due to expire in September 2014. The original concession was a 20 year concession starting in October 1989 but was later extended to 25 years. It launched South East Asia’s first subscriber-based television network in Bangkok in October 1989 using a MMDS transmission platform.
132 Rattananubal, Rawadee, Apirudee Somboontanon, “Thai Telecommunications”, Real Sector Department, Monetary Policy Group, UNPAN, <http://unpan1.un.org/intradoc/groups/public/ documents/APCITY/UNPAN005381.pdf>, 2001.
133 Shin Corporation Public Co.,Ltd., <http://www.shincorp.com/indexen.asp>
134 United Communication Industry Public Co.,Ltd., <http://www.ucom.co.th/engversion/main/ investorrelations_en.html>
135 True Corporation Public Co.,Ltd., <http://www.truecorp.co.th/eng/index.jsp>
136 Samart Corporation Public Co.,Ltd., <http://www.samartcorp.com/indexen.php >
137 Jasmine International Public Co.,Ltd., <http://www.jasmine.com/jasmineweb/html/index.asp>
138 Rattananubal, supra note 132
139 There have been 2 major crises in consideration lately; the economic crisis is in 1997, and the political crisis is the coup in 2006.
140 Constitution of the Kingdom of Thailand B.E. 2540; however, at the time of this writing, there was a coup in Thailand on September 19th, 2006. The junta has enacted the Interim Constitution B.E. 2549 (2006). The new constitution has passed the national referendum on August 24th, 2007. The essentially similar provision is in Section 47

This article is published with the kind permission of Piyabutr Bunaramrueang, Professor of Law at the School of Law, University of the Thai Chamber of Commerce. This article was presented at the 2007 ALIN International Academic Conference at Chulalongkorn University. Except where otherwise noted, content on this site is licensed under a Creative Commons Attribution 3.0 License, <http://cc.in.th/wiki/by_f>