NBTC hints at potential changes to foreign ownership regulations

17 Nov 2011

Thailand’s newly formed telecoms regulator, the National Broadcasting & Telecommunications Commission (NBTC) has hinted that upcoming hearings could lead to a revision of the country’s foreign ownership regulations, which aim to restrict the influence of overseas shareholders in Thai communications operators in order to protect national interests. Specifically, a hearing on 30 November is planned to discuss the Foreign Dominance Notification which became effective on 31 August, having been introduced by an acting line-up of the NBTC consisting of members of the outgoing National Telecommunications Commission (NTC). According to Thai newspaper The Nation, NBTC commissioner Sutipol Thaweechaikarn indicated the new regulator ‘might consider revising the regulations governing foreign dominance of the telecom sector amid concerns that the current rules might contravene free-trade principles.’ The NBTC is of the view that it should hold a hearing, as there are differing points of view on the issue, and will invite a range of experts from areas including law and economics as well as representatives from embassies and foreign chambers of commerce to take part in the discussion. Another unnamed NBTC source was quoted as saying a revision or even abolition of the most recent regulation was ‘likely’.

TeleGeography’s GlobalComms Database notes that foreign investors including Temasek of Singapore (controlling Thai mobile market leader AIS) and Norway’s Telenor (managing shareholder in second-placed cellco DTAC) have been able to get round a foreign ownership limit of 49% by holding majority shares through local nominee companies. The cellcos have been investigated on a number of occasions on the basis that they might break foreign dominance rules but to date have not been ordered to change their ownership structure. Recently, DTAC stated its belief that the most recent (August) regulatory decision on foreign ownership is not applicable to its operations, claiming that the notification is ‘unclear in many respects and may contravene other legislations that have higher hierarchy of law.’ In light of this, DTAC added that it is working with the NBTC and the communications ministry ‘to clear and resolve legal uncertainties’.