Thailand: Policing telecommunications

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The telecoms industry in Thailand has a new regulator, one the sector hopes will move quickly to speed up the processes required for launching latest-generation platforms and develop a master plan to manage frequencies and licensing, though there are lingering concerns over whether the new regulator itself is properly constituted.

On September 5 the senate voted to choose the 11 commissioners from among 44 shortlisted candidates who would make up the board of the National Broadcasting and Telecommunications Commission (NBTC), replacing the interim National Telecommunications Commission.

The NBTC has been a long time in the making, having initially been mandated under the 1997 constitution. The process of putting the body in place has been repeatedly delayed due to changes in the political climate and at times heated debate over how it should be set up, and exactly what its roles and responsibilities should be.

The commission’s most immediate task will be to draft a plan dealing with the broadcasting and telecoms sectors, including frequency allocations and regulations, and paving the way for the issuing of licences for 3G mobile services. It is widely expected that the issuing of 3G licences may take place in the latter half of 2012.

News that the way had been cleared for the NBTC to start work had an immediate impact on the telecoms sector, with shares in both Advanced Info Service, the domestic market leader, and Thailand’s number two mobile operator, Total Access Communication, recording highs on September 7, posting increases of more than 5% and 2%, respectively, while the parent of the third provider – True Corp – also jumped.

According to Pichai Lertsupongkij, the head of Thanachart Securities’s investment advisory unit, there are widespread hopes that the way has been cleared for the launch of 3G. “The 3G hopes boosted big-cap telecoms across the board and it is one major market story today,” Pichai told Reuters. “Expectations are now for the auction to start in the second quarter of next year.”

The quick drafting of the NBTC master plan will be a factor in improving the outlook for the telecoms sector, CIMB Research said in a note issued just days after the commission was established. “Investors could become more upbeat given the successful formation of the NBTC on September 5,” the market research and investment consultancy said in a report released on September 12. “The NBTC would add greater clarity to a 2G concession-to-licence transition and 3G/2.1 GHz licensing.”

The founding of the NBTC will have a far-reaching impact on the industry, according to Porranee Thongyen, an analyst at Asia Plus Securities, with the formation of the new regulator set to speed up the bidding for high-speed mobile licences after the long delay.

“All mobile companies will benefit from the new licences, which enable them to expand into new businesses with lower royalty costs than the existing contracts,” Porranee said in a report issued on September 6. Overall, this and other developments mean the sector could look forward to good revenue and solid margins for the second half of this year and for 2012, the CIBM report said.

While the business community may be happy with the setting up of the NBTC, the agency itself may still have a rocky transition before it can fully settle in. The Department of Special Investigation (DSI) is researching allegations that there were irregularities in the commission’s selection process, amid claims some candidates may not have met the criteria laid out for those to be included on the shortlist.

However, the deputy prime minister, Chalerm Yubamrung, said on September 9 that, despite the launching of the investigation, the finalised list would be submitted to the King for approval. “There is no need to postpone the submission of the list because the DSI is investigating the selection panel, not the NBTC members,” Chalerm said. Should the DSI find evidence of irregularities, there could be further delays in drafting and implementing the new master plan for the telecoms sector, slowing the rollout of new technology and services.

While all involved will want the future regulating and managing of the sector to be – and be seen to be – transparent and open, many in the industry will also want the process of reforming and modernising the regulatory regime to be carried forward as quickly and smoothly as possible. Most will be hoping that the NBTC can get its master plan drafted and in place, allowing for a generational change in the Thai telecoms sector that would bring it up to speed with many of its neighbours.

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