Thailand’s regulatory roundabout spins on as TOT plans defiance

Thailand’s telecoms regulator has summoned state telco TOT Corporation to explain its 2300-MHz plan while one of the first acts of the regulator under the brand new frequency act is to set up a committee to draft a new frequency act.

The National Broadcasting and Telecommunications Commissioned has issued a letter asking TOT to provide further information about its 2300-MHz project 4G project and warned the telco that it would have to abide strictly by laws and regulations.

The state telco has 64 MHz of 2300 MHz under a legacy licence from the time before the regulator was set up. TOT has come up with a business plan to find an MVNO partner to develop 60-MHz of 2300 spectrum commercially in exchange for 40 percent of the network capacity.

Earlier the full NBTC board rejected TOT’s 2300-MHz business plan saying that it would break section 46 of the NBTC act that requires that licensees operate their own networks and that it would also break public-private partnership laws. The NBTC board recommended that the NBTC telecoms sub-board revoke TOT’s 2300 MHz licence on grounds of dis-use and reallocate it through auction..

Days later, NBTC Secretary-General Takorn Tantasit met with TOT President Monchai Noosong and VP Rungsun Channarukul and announced that all the issues with the contract had been satisfactorily rectified and TOT pushed ahead with its beauty contest to select the partner. Six bidders including all three telcos – AIS, Dtac and TrueMove – have applied for the 2300 MHz network. The results of the beauty contest are expected no later than 25 April.

However, Rungsun announced that TOT would not be asking for permission for the network from the telecoms regulator and that they would instead ask the Attorney-General to approve the contract, an act of defiance that has led to today’s events.

With CAT-True having a similar non-licensed, wholesale-retail deal on 850 and TOT-AIS on 2100 it is widely expected that 2300 will go to Dtac. Not approving the deal would have repercussions to the other two networks as well.

Meanwhile with the passage of the new NBTC Act on 1 April the regulator is no longer independent and now has to report to the Digital Economy Commission which is chaired by the Prime Minister. The NBTC Secretary-General has put forward a list of policies to DE Minister Pichet Durongkaveroj for the DE Commission to incorporate as part of the DE policy.

1. Allocate 2600, 1800 and 850 MHz via auction for economic progress.
2. Ban above-ground communications cables
3. The Pracharat low-cost broadband project
4. All future auction revenue, and 15% of other NBTC revenue, to be put into the Digital Economy Fund.
5. Set up a committee to draft a new NBTC Act in accordance with the new constitution.
6. Invite operators to find a way to regulate OTT services in Thailand on 12-13 September.

Under the current NBTC Act auction revenue less costs are returned to the Ministry of Finance for reallocation through the budgetary process.

The banning of overhead communications cables will profit the two state telcos handsomely. In November 2015 TOT Acting President Montchai Noosong said but that this would be extremely profitable as state telcos TOT and CAT would have exclusive rights to underground fiber. Montchai said that Bangkok Metropolitan Administration does not let the private sector run underground fiber cables and providing this service to the private sector telcos would bring in $11-14 million (4-500 million baht) a year to TOT.

Even though the NBTC Act has only just been passed on 1 April, a new NBTC Act is now necessary as section 77 of the new constitution passed days later on 6 April has clear rules on how the NBTC Act needs to be designed, including public hearings and assessment on other laws, neither of which was done in the run-up to the NBTC act despite warnings from the Council of State.