Indian Broadband Policy and Regulatory Resources

THAILAND

Telecommunication Regulatory Environment results for ThailandThailand-1

Overall, below average result of the TRE survey in Thailand sketch a mixed picture of country’s regulatory regime. The grievous picture assumed to be attributed to three major factors: unfavorable regulatory environment associated with legacy of the concession era, unclear regulatory rules and NTC’s capacity constraints. The complete TRE report can  be accessed hereThe broadband market has been booming owing to the new internet licenses handed out by the regulatory body during 2007‐8. There was 2.6 million subscribers and over 20 ISPs as of the third quarter of 2010. The three largest providers, all of which are subsidiaries of a fixed line operator, occupied almost 90 percent of the market share. They are TOT Broadband (33.94%), True Broadband (29.41) and 3BB (26.45%) that was a subsidiary of TT&T. Newcomers will face right‐of‐way problems and will have to spend significant time and resources on network installation if proper network unbundling is not implemented. The HHI for Broadband is 3181 which shows a concentrated market.

 

  • Anti Competitive Practices

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Anti Competitive Practices dimension has received a score of 2.7 for broadband and 2.6 for both mobile and fixed telephony out of 5.

Two pieces of legislation provide safeguards for competition in the Thai telecommunications market: the Trade Competition Act of 1999 and TBA. TBA requires that telecom businesses be subject to all provisions under the general competition law.

Although competition regulation has been made available, it has not been properly enforced. For example, the NTC did not take any initiation when TRUE refused to strike an interconnection deal with Hutch, its much smaller competitor, resulting in the eventual takeover of the latter by the former. This may be the cause of the low score in this dimension.

  • Interconnection

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Among all the regulatory dimensions surveyed, interconnection received the lowest score, 2.6. Concerns expressed by the respondents included the inability of NTC to enforce its interconnection rules on state operators that are protected by the terms and conditions of the concessions that grant them regulatory rights, unclear interconnection rules and the failure of NTC to intervene in the setting of interconnection charges by large private mobile players in the market.

  • Market Entry

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Market entry received both the highest and the lowest scores. Highest score of 3.3.goes to broadband market entry and lowest score of 2.3 goes to mobile market entry. This reflects the fact that many licenses issued by the NTC during the last six years, have been Type 1, non‐network services such as internet services, resale services and broadband services. On the other hand, new Type 2 and 3 network‐based services have been much more limited. Even when network licenses have been granted, no new entry materialized due to the lack of proper right of way regulations and delayed allocation of 3G frequencies.

  • Quality of Service

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It is rather surprising that QoS ranked second highest after market entry given that monitoring of QoS by the NTC is basically non‐existent today as the system is self reported. The NTC has never come up with its own QoS data.

From the perception survey, mobile service received the highest score, 3.1, while broadband received the lowest score, 2.9. Perhaps competition in the cellular market has prompted service providers to maintain service quality in order to gain or secure their market share. Lower quality for broadband reflects the lack of competition in the service as the market is currently dominated by a single provider, TRUE, with a much smaller market share being held by TOT. NTC has handed out several broadband licenses to new entrants; however, the installation of a network is time‐consuming. Competition in the market is likely to intensify in the near future; hence, consumers can expect service quality to be improved eventually.

LIRNEasia’s broadband QoS data can be accessed here

  • Scarce Resources

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According to the TRE survey results, the allocation of frequency for cellular services seemed to be the second most serious concern regarding access to scare resources among respondents. The delay since 2005 in auctioning the 3G license until today has arisen from legal uncertainties surrounding the authority of NTC to allocate frequencies.

In a nutshell, the Radio Frequency Act 2000 stipulated that the frequency allocation is to be conducted jointly by the two commissions, the National Broadcasting Commission (NBC) the National Telecommunications Commission (NTC). While NTC was formed five years after the law was passed, due to complications surrounding the selection process the NBC was never formed. In the absence of the latter, the NTC alone could not allocate frequencies. The NTC’s attempt to hold a 3G auction in September 2010, after legal consultation with the Council of State over whether it has full legal authority to auction the 3G‐2.1GHz spectrum licenses, was challenged by the CAT on the basis that the regulatory body did not have the legal power allocate frequency. The Administrative Court suspended the auction. As it stands, 3G auction will have to wait for the new set of commissioners, the National Broadcasting and Telecommunication Commission, established under the new Frequency Act of 2010.

  • Tariff Regulation

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Tariff regulation received scores at 2.6, which is still below the average of 3.0. Respondents complained about the lack of clear tariff regulation and the arbitrary tariff ceilings established by NTC. So far, NTC has taken a hands‐off approach in tariff regulation and has allowed prices to be determined by competition in the market. Although it recently established ceiling prices for several services, most are non‐binding, with the exception of local fixed line services.

Although the NTC’s relatively “hands off” attitude towards price regulation has nurtured fierce price competition in the market, it displays clear inability to set telecom tariffs even in areas where it needs to, due to a lack of data and information. At the same time, its decision to forebear regulation when such regulation is clearly in need raises doubts about the regulator’s competence.

  • Universal Services Obligation

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The low Broadband USO score is a result of the unclear and opaque rules and regulations of NTC that leave all operators as well as academics and other stakeholders dissatisfied with the regime. However, the most recent USO plan announced in January 2010 which specifies the name of villages where public telephones are to be installed and the name of education institutions where public and fixed line telephones are to be made available, as well as broadband service, has helped promote greater transparency of the USO regime.

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Source: Thailand