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2008/SOM3/IEG/SEM2/006 Session: I
Recent Trends on Investment Liberalization and Facilitation in Telecommunications in Thailand
Submitted by: Thailand
Seminar on Recent Trends on Investment Liberalization and Facilitation in Transport and
Telecommunication Infrastructure Lima, Peru
13–14 August 2008
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Recent Trends on Investment Liberalisation Recent Trends on Investment Liberalisation and Facilitation in Telecommunicationsand Facilitation in Telecommunications
in Thailandin Thailand
Prof. Prasit Prapinmongkolkarn
National Telecommunications Commissioner
&
Dr. Bonggot AnurojSenior Investment Promotion Officer
International Affairs BureauOffice of the Board of Investment
Agendas:1. Investment Opportunity Creation by NTC
Regulations on Liberalization of Telecommunications Service and Promotion of Free and Fair Competition
2. Infrastructure3. Liberal Investment Policy4. Availability of Trained Human Resource
(I) Investment Opportunity Creation by NTC Regulations on Liberalization of Telecommunications Service and
Promotion of Free and Fair Competition 1. The Act on the Organisation to Assign Radio
Frequency and to Regulate the Broadcasting and Telecommunication Service, B.E. 2543 (AD. 2000)
2. Telecommunications Business Act, B.E. 2544 (AD. 2001)
3. Section 51 (14) to set up measures for fair and free competition between operators in telecommunication businesses and relating services, and for universal service obligations
(I) Achievements1. Liberalization of International Gateway, International
Internet Gateway (IIG) and National Internet Exchange (NIX)– 5 more International gateway operators arose– International traffic in the past year increased 4
times more– More investment in gateway business including
leasing of International Private Leased Circuit (IPLC) and submarine cables from International Carriers, for example, VSNL International and others
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(I) Currently CAT is only one Thai Submarine Cable Company
5Source: CAT Telecom
(I) Comparison of International Bandwidth and Domestic Bandwidth
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(I) International Bandwidth 29.266 Gbps
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(I) Domestic Bandwidth 216.96Gbps
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(I) Number of Internet Subscribers
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(I) Achievements2. 3G and New Entry
– 17 new type III service providers, 93 ISPs and 11 type II service providers have been granted licenses since 2005.
– 3G In-band Migration, WiMax, Wi-Fi and VoIP investment is valued more than 3 billion US dollars etc.
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(II) Infrastructure strong and growing
Mass transit : Skytrain, Subway, Bus Systems all to be expandedHighwayHighway system: 64,000 km to all provinces
Deep sea ports: : capacity over 5 million TEUcapacity over 5 million TEU4,000 km rail4,000 km rail, links to Malaysia, Singapore5757 industrial estatesindustrial estates
World-class, WiWi--Fi Fi capabilities and inexpensive broadband broadband widely available
Communications:60% cell phone use, broadband internet
Low CBD Office rent: $12.5/sq. ft./year
Suvarnabhumi Intl. AirportSuvarnabhumi Intl. Airport: 45 million passengers/year and 3 million metric ton cargo
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ASEAN: 550 million AFTA ASEAN: 550 million AFTA
Australia: 20 million TAFTAAustralia: 20 million TAFTA
China: 1.3 billion China: 1.3 billion Early Harvest :ChinaEarly Harvest :China--Thailand Thailand ChinaChina--ASEAN FTA ASEAN FTA
India: 1.1 billion India: 1.1 billion Early Harvest Agreement Early Harvest Agreement
Japan: 128 million Japan: 128 million JapanJapan--Thailand Economic Thailand Economic Partnership AgreementPartnership Agreement
Taiwan: 23 million Taiwan: 23 million
Thailand: 65 millionThailand: 65 millionGDP per capita: US$ 3,720GDP per capita: US$ 3,720
New Zealand: 4 million New Zealand: 4 million Closer Economic PartnershipCloser Economic Partnership
(II) Hub of Access to Regional Markets (Countries and populations)
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(II) Macro Economic Outlook(II) Macro Economic Outlook
Source: BOT and NESDB Apr 2008
Economic ForecastsEconomic Forecasts 20052005 20062006 20072007 2008E 2009E
GDP Growth 4.5 5.1 4.8 4.8-6.0 4.5-6.0
Private consumption 4.5 3.2 1.4 4.5-5.5 4.5-5.5
Public consumption 10.8 2.3 10.8 5.0-6.0 10.0-11.0
Private Investment 10.6 3.7 0.5 9.0-10.0 11.0-12.0
Public investment 10.8 3.9 4.0 6.5-7.5 7.0-8.0
Export 15.2 17.0 18.1 13.5-16.5 9.0-12.0
Import 25.8 7.9 9.6 22.5-25.5 12.5-15.5Trade balance (US$ billion)
-8.3 1.0 12.0 0.0-2.0 (-6.0)-(-2.0)
Current account (US$ billion)
-7.6 2.2 14.9 4.0-7.0 (-2.0)-1.0
% year on year
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AMPHUNAMPHUNNorthern Region
I.E.PICHITPICHIT
Pichit I.E.SARABURISARABURI
Saraburi I.E.(Kaengkhoi)Nong Khae I.E.
AYUTTHAYAAYUTTHAYAHi-Tech I.E.
Bang Pa-in I.E.Saharattananak
orn I.E.BANGKOKBANGKOK
Bangchan I.E.Lat Krabang I.E.
Gemopolis I.E.RATCHABURIRATCHABURIRatchaburi I.E.
V.R.M. I.E.SAMUT SAMUT
SAKHONSAKHONSamut Sakhon
I.E.Sinsakhon
Printing City I.E.Maharajnakorn
I.E.PRACHUAP PRACHUAP
KHIRI KHANKHIRI KHAN
KHON KAENKHON KAENKhon Kaen I.E.
CHACHOENGSAOCHACHOENGSAOWell Grow I.E.Gateway City I.E.TFD I.E.SAMUTPRAKARNSAMUTPRAKARNBangpoo I.E.Bangplee I.E.CHONBURICHONBURIHemaraj Chonburi IAmata Nakorn I.E.Pin Thong I.E.Pin Thong I.E. (LaeLaem Chabang I.E.Phanthong Kasem IRAYONGRAYONGMap Ta Phut I.E.Hemaraj Eastern I.EPadaeng I.E.Eastern Seaboard I.Amata City I.E.Hemaraj Eastern SeAsia I.E.RIL I.E.
Existing Industrial Estates ( 38 I.E. in 15 Provinces) Existing Industrial Estates ( 38 I.E. in 15 Provinces)
I-EA-T Owned Joint Venture
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No restrictions on foreign currency remittances
No export requirement
No foreign equity restrictions in manufacturing sectors and certain promoted services sector
No local content requirement
(III) Liberal Investment Policy
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Tax IncentivesCorporate income tax holidays up to 8 yrs
Additional 50% reductions of corporate income tax for 5 yrs may apply in zone 3
Import duty reductions or exemptions on machinery and raw materialsDouble deduction of public utility costsDeductions for infrastructure construction/installation costs
Non-Tax IncentivesLand ownership rights for foreign investorsPermission to bring in foreign experts and techniciansWork permit/visa facilitation
One-Stop-Shop Visas & Work Permits are issued in 3 hours3 hours
(III) Basic BOI privileges and Measures
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• Conditions
• Classified as a priority activities
• Project must be approved by relevant government agencies
1. Satellite telecommunications
2. Telephone services
• Telecom Activities
• Satellite Telecommunications will receive a corporate income tax exemption only for the overseas income.
• Telephone Services will receive only non-tax privileges.
(III) Promoted Projects in Satellite Telecommunications(III) Promoted Projects in Satellite Telecommunications
Satellite Communications(2 Units)
3,341.0Project Start-Up23/02/1993
Thaicom Public Co., Ltd.
Telecommunication Service
345.0Project Start-Up12/07/1990
2. Samart Telecoms Public Co., Ltd.
-Baseband Service 45 Channel/Day-Satellite Communications (1 Unit)
5,554.8Project Start-Up26/09/1997
Thaicom Public Co., Ltd.
Transponder Service (1 Unit)
16,543.0Project Start-Up11/03/2004
1.Thaicom Public Co., Ltd.
Product/Service
Investment(million bath)
StatusCompany
Cellular Service 70,000 number
6,200.0Project Start-Up30/06/1992
2. Total Access Communication Co., Ltd.
Telephone Service 2,000,000 number
95,000.0Project Start-Up16/06/1992
1. TRUE Corporation Public Co., Ltd.
Product/Service
Investment(million bath)
StatusCompany
(III) Promoted Projects in Telephone Services(III) Promoted Projects in Telephone Services
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The total number of all post and under graduates from all the universities in Thailand ranged from 300,000 to 500,0000 students per year.
This is quite a considerable workforce for Thai industries.
With the growing demand as well as investments in the telecom sector, human resources become a very important factor for industrial growth.
(IV) Availability of Trained Human Resource
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Every year, the number of graduates and post graduates from the Electrical Engineering Department from all the universities in Thailand ranged from 900 -1000 students per year, which is quite significant, considering that most of these graduates ended up working in the telecom related industries.
Plentiful human resource of well-trained engineers working in the telecom sector is estimated to be around a few ten thousand persons.
(IV) Availability of Trained Human Resource
2005
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2006
Electrical Engineering Graduates
20042004 2005 2006
All University Graduates in
Thailand
(IV) Availability of Trained Human Resource
Source : Commission on Higher Education, Ministry of Education
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The perfect opportunity