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NTC to clarify Thai stand in FTA talks

Bangkok Post

NTC to clarify Thai stand in FTA talks

Bangkok to say no to satellite services


1 September 2005

Thailand is preparing briefing papers for the technical round of the US-Thailand free trade area (FTA) agreement talks that will make clear the country will not open satellite-based international telecom services or direct broadcasting in the near future.

Prasit Prapinmongkolkarn, a commissioner of the National Telecommunications Commission, said Thailand will comply with an earlier World Trade Organisation ruling to open its telecommunications sector to foreign competition next year, but that liberalisation would be be in stages.

Satellite-based gateway services will likely be opened only in 2009, said Mr Prasit, while direct broadcasting will have to await formation of the National Broadcasting Commission (NBC), ordered by the 1997 constitution but so far still awaiting action.

The decision essentially protects incumbent operators, which in the satellite market is monopolised by Shin Satellite, a unit of the Shin Group and founded and controlled by the family of Prime Minister Thaksin Shinawatra.

The NTC is to meet the US counterparts to discuss telecoms issues under the framework of the Thai-US FTA agreement in Washington next week. The talks are at the level of working group, leading up to the next and fifth round of high-level talks, which will focus purely on telecommunications issues.

The NTC would present position papers to the US side addressing satellite-based businesses and interconnection details, he said. The papers would stress that Thailand will comply with the WTO position, but only as necessary.

First to be liberalised will be fixed-line telephone business, telex services and the Internet service provider (ISP) industry. Mobile phone competition will be gradually opened, but with foreign ownership restrictions in the initial stages.

Mr Prasit said the NTC remains concerned about third-generation, high speed mobile phone service. None exists in Thailand, and Thai operators still lack the strength and experience to compete with foreign operators, he said.

Local operators were strong in second-generation service but the 3G issue means the NTC would not fully open the mobile phone service to foreign firms next year.

He said if a local operator applied for 3G licence along with a foreign partner, "the NTC will fix the foreign holding at no more than 25% of the joint venture."

The US was interested in satellite-based international gateway and direct broadcasting services through direct subscription from the US operators, he said. US operators have more than 10 satellites with global coverage.

But if Thailand opens the gateway and direct broadcasting services, Thai operators would be at a disadvantage. US operators could penetrate Thai markets, but Thai operators have no satellite which covers the US.

In addition, slots on US satellites were fully occupied, meaning that Thai operators would have to lease transponders on Mexican or Brazilian satellites to penetrate the US market.

"We decided to hold the satellite uplink and downlink services for three years, particularly gateways, while direct broadcasting will take longer depending on formation of the NBC," he said.

At present, TOT Plc and CAT Telecom are national gateway operators, he said. The NTC was seeking supporting data from Shin Satellite on satellite services to back up its stand in the US talks.