Regulator defends stance on limiting foreign influence

19 Aug 2010

The Bangkok Post reports that National Telecommunications Commission (NTC) representative Sudharm Yoonaidharm has dismissed complaints filed by the European Union (EU) suggesting that a draft regulation aimed at preventing ‘foreign dominance’ in the telecom sector violates Thailand’s commitments to the General Agreement on Trade in Services (GATS) under the World Trade Organisation (WTO). The draft proposes placing curbs on shareholdings and management positions held by foreign nationals, and would apply to existing operators and winners of 3G mobile licences scheduled to be auctioned late next month. Mr Sudharm said the EU was mistaken in alleging that the rules violate GATS by contravening the WTO’s Government Procurement Agreement – under which members commit to fairness and transparency in government procurement – firstly as Thailand is not a signatory to that particular agreement and secondly because the rules do not concern public procurement, but instead apply to private sector competition for commercial services using 3G spectrum. Particularly contentious is a proposal that the nationality of a company’s senior management should be considered in the 3G auction, an issue that could affect most of the bidders, including AIS and DTAC, controlled by Singaporean and Norwegian investors respectively.

AIS, DTAC and Thailand’s other nationwide GSM operator True Move have purchased bidding documents for the 2100MHz UMTS auction scheduled for 28-29 September, as have two MVNOs in the country, Samart and Loxley, which are both looking at the possibility of partnering foreign companies to launch bids. Bid proposals must be submitted by 30 August. The NTC has acknowledged that major foreign interest in the auction is unlikely, mainly due to repeated and frequent delays in the process and uncertainty about licensing terms caused by political disputes. However, the Bangkok Post’s take on the matter was that no overseas companies directly applied in light of the regulator’s declaration that it intended to curb foreign influence in the sector.