Fresh rules against foreign dominance due

NBTC member Suthiphon Thaveechaiyagarn made the remark yesterday at the second public hearing on the draft of the revised regulations.
The rules will require local telecom operators to determine their own measures to prevent foreign dominance and submit them for the NBTC’s approval. In cases indicating a trend towards foreign dominance, the watchdog will require a remedy within one year.
Darmp Sukontasap, chief corporate affairs officer of Total Access Communication (DTAC), expressed his concern in the hearing that these rules might be exploited to affect the NBTC’s planned licence auction for the 2.1-gigahertz third-generation spectrum.
There are expected to be only three bidders for these 3G licences. If one of them is challenged or affected by these revised rules, there will only be two bidders. If that were the case, there would be no competition in the bidding and the NBTC might decide to abort the auction.
He added that Thailand already had many laws and regulations to prevent the foreign dominance of local businesses, so there was no need for these new ones. The Telecom Business Act and the Foreign Business Act both cap the maximum foreign shareholding in telecom operators at around 49 per cent.
Advanced Info Service has Singapore Telecom as its strategic partner, while DTAC has Norway’s Telenor. True Corp is the only local telecom operator without a foreign strategic partner.
The NBTC’s predecessor, the National Telecommunications Commission, imposed the existing regulations last August, which attracted criticism from groups of scholars and representatives of foreign trade organisations that the rules could discourage foreign investment and might contradict Thailand’s international trade commitments. This has prompted the NBTC to revise the rules.
Unlike the existing regulations, the revised ones do not touch on the issue of national security, taking the view that this is a separate issue from foreign dominance.
The new rules replace the term “controlling power” with “dominance”. The definition of dominance would be based on a telecom operator’s shareholding structure, particularly whether a foreign partner controls a majority of votes at shareholders’ meetings and has the authority to appoint or remove directors.
DTAC filed a complaint with the Central Administrative Court last November claiming the existing foreign-dominance regulations were illegal and unconstitutional.