Thai Telecom market liberalization

• WTO agreement on telecom services liberalization

• Semi-liberalization by giving concession to private operators in the 1990s

• Thai Government fully privatize and liberalize telecom services in 2006

Sharing revenue in Concession

State-ownEnterprise

• TOT• CAT

Concessioner

Operators• Shin• Samart• UCOM

Ministry of Finance

Partial Income

SharingRevenueas concession

fee

• Jasmine• CP

Subscribers

/ Clients

ServicesPayments

TOTOwn sources of revenue• Fix Lines• Public phone

BTO Concession• Fix lines (Bangkok) - TA• Fix lines (Rural) - TT&T• Mobile phone - AIS• Paging - Hutchison, Worldpage, Phonelink

CATOwn sources of revenue• International phone• Postal services• ISP (Internet Service Provider)• Mobile phone

BTO Concession• Mobile phone – DTAC, TAOrange, DPC• Satellite - Thaicom• Paging – Paclink, Easycall

After Telecom Liberalization

• Concessions of TOT & CAT be eliminated

• TOT and CAT only be one player, not a controller anymore

• New organization be established for control a game

Telecom Reform Developments Before

Liberalization• Privatization of TOT and CAT

• Formation of the NTC

• Telecommunications concession conversion

• Slack privatization cause the NTC has not been established

• TOT accomplished to be TOT Corporation in 2002

• Plan to list TOT & CAT in the Stock Market

Privatization of TOT and CAT

• The NTC is independent regulatory organization

• Governed by seven-member board

• Lack of transparency about candidates selecting

Formation of the NTC

Telecom Concession Conversion

• What is the best way to converse telecommunications concession before liberalization?

TDRI frameworkCU framework ICT framework

TDRI Framework2006 2015

Lump sum payment on NPV

Discounted byappropriate rate

xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx

X

X

X

X

X

X

X

X

X

TDRI Framework

• Problems

What is appropriate discount rate ?

Many private firms reject it, cause it less competitive than new entrants

CU Framework2006 2015

No payment after market

liberalization

xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx

CU Framework

• Problems

Unfair for new players

Government losing benefits

ICT Framework

ConcessionerConcessioner

Ministry of FinanceMinistry of Finance

TOT & CATTOT & CATConcession fee

Excise tax

ICT Framework

• Problems

Shoving tax responsibility to consumer

Conversion Principle

• Fair game for any players

• Reduction in government revenue as low as possible

• Benefit to consumer

THE END