DTAC, TrueMove face off at NBTC conference

20 Dec 2011

DTAC and TrueMove engaged in a war of words and thinly veiled threats at regulator NBTC's end of year conference. DTAC accused officials of enacting a foreign dominance regulation to benefit “one company.” TrueMove countered that the NBTC is duty bound to come down hard on DTAC's ownership structure, asserting that failure to do so would be a dereliction of duty - which is a criminal offence for public office holders in Thailand.

Speaking at a panel discussion on ASEAN free trade at the NBTC end of year conference, Darmp Sukontasap, Chief Corporate Affairs Officer at DTAC, said the NBTC's new Foreign Dominance Notification - which came into force in August - ran against the grain of trade liberalization that is happening all over the world.

“Only 18 countries still have a tightly government-regulated telecom sector. Liberalisation leads to investment, to cheaper and better services through competition. All of Thailand's neighbours have 4G or 4G plans, and yet Thailand is still stuck, not having 3G licences or a 3G spectrum auction.

“Lack of competition is bad for the country's communications infrastructure, for education, for investment and for everyone. Thailand will not lose out in opening up the telecoms sector. Deregulation is not a scary thing,” he said.

True Corporation's Director for Telecommunications Law, Tach Busadeekarn, said that TrueMove is always committed to openness. Busdeekarn said True itself once had foreign shareholders - Orange and, on their fixed line side, Verizon - in a legal and transparent way.

He said that True did not need protection and was happy to compete with foreign companies as long as they admitted they were foreign.

He said that the problem with the existing laws on foreign ownership was that many so-called Thai companies declared 49% foreign ownership, but often used complex tiered ownership structures to hide foreign interests or allowed foreign shares more voting rights than local shares. Police were powerless to prove such complex dealings and existing laws were effectively neutered. The Foreign Dominance Notification only gave them the tools to enforce existing laws by looking at actions, not just shareholding.

He said that the notification does not break any international treaties, nor does it break Thailand's WTO commitments on shareholding and does not give the regulator the immediate right to revoke licences in case of a breach, all allegations which have been directed towards the new regulation.

On that last point, he explained that the NBTC must forward a report to the Ministry of Defence, the Ministry of Interior and National Security Agency first and only if one agrees that it is a matter of national security, can the licence be revoked, which is a lengthy process.

“But if the NBTC does not enforce the Foreign Dominance Notification, it could be construed as dereliction of duty,” he said.

DTAC hit back hard in round two.

“Tach speaks as if he is an NBTC commissioner himself. He keeps referring to national security, but no telecom companies are involved in terrorism. I do not understand how the Foreign Dominance Notification can be a twisted into a matter of national security.

“When we open our borders, capital can flow freely throughout the region, but they will not flow here if the infrastructure is lacking,” he warned.

Busadeekarn was given a chance to respond and put in a final word. “Darmp keeps saying that the Foreign Dominance Notification will affect our access to technology, but today anyone can buy technology from Huawei,” he said.

But perhaps it was the body language that spoke more than words. True had sent a lawyer and had precisely delivered a targeted message in a calm and composed manner, but it was not the answers that critics were asking. Meanwhile DTAC had sent a strategist, a former diplomat, who was fidgeting and openly agitated as the exchange unfolded. It was not even a dialogue. Both were right in what they said. In isolation.

TrueMove actually managed to mention its disastrous relationship with Orange in a positive light, conveniently forgetting that Orange had to write-off its $500 million investment in what was then TelecomAsia in 2003, nor did it address criticism of how the Foreign Dominance Notification goes far beyond the Telecom Business Act in giving discretionary power to the regulator, changing a number of definitions and effectively disbanding many of the act's provisions safeguarding foreign investment in Thailand, other than by saying it did not.

On the other hand, DTAC still has not shed any light on how or if Telenor will lower its shareholding to comply with the new regulation which has been enacted, regardless of whether it thinks it is anti-competitive or not.

Meanwhile, the other participants were more focused on the ASEAN single market in terms of freedom of movement of professionals. Thailand's Ministry of ICT and Ministry of Foreign Affairs explained how work is more than halfway completed on finalising on qualifications for software developers, project developers, enterprise architects, network and security administrators and information security experts.

The representative from the Ministry of Foreign Affairs said that Thailand is committed to deregulation of the market as can be seen from the Frequency Allocation Acts of 2000 and 2010 and work towards separating the operator and regulator roles of the two state owned telcos (CAT and TOT), lack of progress thereof not hampering his enthusiasm.

A media company at the panel was more cautious. While he felt the industry would benefit from free flow of talent in the region, he feared domination by the handful of global players and their bottomless pockets if the Thai broadcast market is fully deregulated.

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