New Laws in Thailand Aim to Curb Foreign Dominance

5 September 2011

New laws aimed at erecting a barrier against foreign dominance in Thai telecommunications operations are now in place in Thailand. The National Telecommunications Commission (NTC) proposed the new regulations in order to allow more control over foreign investment in telecommunications in Thailand, as well as to serve as a booster for the future National Broadcasting and Telecommunications Commission in auctioning off new spectrum licenses. These regulations strive to promote company management by local executives and decrease incidences of foreigners using nominees to control telecommunications companies.

Both Advanced Info Service (AIS) and Total Access Communication (DTAC) are ready to comply with the new regulations.

The NTC believes that the new Thailand Law regulations are necessary to protect Thai businesses, in light of Thailand’s commitment to the Asian Economic Community and current market liberalization practices. Many Thai companies have been concerned about the escalating use of nominees by foreigners to hold shares in Thai Telecom companies.

Numerous foreign business organizations in Thailand have opposed the new laws, raising concerns that the laws would have a negative impact on foreign operators looking to invest in Thailand in the future.

The new laws will apply to holders of Type 2 or Type 3 licenses, as well as state telecom concessions. Type 2 license holders include telecoms who have or do not have their own network and who have the greatest affect, due to competition, on specific markets. Type 3 license holders do own their own network and their competition does directly affect the public.

The NTC requires that all license and concession holders report every year on their foreign ownership status. If the NTC determines that foreign dominance exists, the companies are required to submit a proposal to NTC outlining how the problem will be solved within a specified time period. If the company fails to correct or prevent foreign dominance, the NCT is entitled to suspend or even revoke their license.