•News Center
 •This Week
 •From US
 •Register Now
 •About Us
 •Advertising Info
 •Nikkei BP Group

Advanced Search

(Japanese Site)

  • Thailand Heads Toward Telecom Liberalization
  • March 17, 1998 (BANGKOK) -- Thailand officially kicked off its long-awaited telecom sector liberalization program on March 3 with the cabinet approving a draft of reforms to shake up the monopoly-driven industry.
    The package of laws renews Thailand's commitment to the World Trade Organization to fully open its market by 2006 and provides a framework for the liberalization and privatization of state enterprises that currently control much of the sector.

    If things go as planned, the new rules for competition will take effect in March 1999, seven months ahead of earlier expectations.

    The reform program is in four parts. The first calls for the conversion of all telecom concessions currently held by the state-run Telephone Organization of Thailand (TOT), the Communications Authority of Thailand (CAT) and the Post and Telegraph Department (PTD).

    The second brings in new tariff structures that are supposed to reflect the actual costs of telecom infrastructure investment and lay down standard prices for existing and new players in the industry.

    The third part states that the TOT and CAT will have to undergo revolutionary changes as both have to be privatized to better compete with private firms. The details of how this will be achieved have yet to be decided.

    According to press reports, each of the state enterprises will be required to offer 25 percent stakes in a bid to woo strategic foreign partners. Bidding for the CAT stake is expected to open later this year, while the TOT plans to call bids in 1999.

    Later, a further 22 percent of the equity in the two entities will be offered in private placements before a 23 percent stake is sold to the public and the firm is listed on the stock market. The government will continue to hold a 26 percent stake in the new firm while the remaining four percent will be reserved for TOT employees.

    The fourth part deals with the legal groundwork that needs to be prepared to end the enshrined monopolies of the TOT and the CAT. This process will include the establishment of the country's first regulatory body for the telecom industry which many observers expect to be based on the U.S. Federal Communications Commission.

    In preparation for this, the cabinet in February approved the State Enterprise Capital Act to accelerate the amendment of the country's state enterprise laws.

    Under the just-passed reform program, the PTD will be dissolved to become the secretariat of the regulatory body, which is in charge of implementing and enforcing new rules covering competition.

    Public reaction to the liberalization laws has focused on the new telecom tariff structure, which is expected to lead to a hike in monthly bills for local telephone users. Business groups have also expressed fear about talk within government circles of reviving a time-metering concept for local phone calls.

    Thailand's economic woes have accelerated the privatization process with the country needing to raise funds to meet the fiscal targets set by the International Monetary Fund's US$17.2 billion bailout program.

    (Chris Burslem, Asia BizTech Correspondent)

    Asia's Largest IT Show Reaching Over 300,000 Corporate Buyers and IT Professionals

    Copyright © 1997-98
    Nikkei BP BizTech, Inc.
    All Rights Reserved.
    Updated: Mon Mar 16 21:44:50 1998