Telecom Regulatory and Policy Environment in Thailand: Results and Analysis of the 2008 TRE Survey

31 Pages Posted: 21 Feb 2010

See all articles by Deunden Nikomborirak

Deunden Nikomborirak

Thailand Development Research Institute

Saowaluk Cheevasittiyanon

affiliation not provided to SSRN

Date Written: 2008

Abstract

The average result of the TRE survey in Thailand (2.8 out of 5) reveals mixed performance of the National Telecommunications Commission (NTC), the Thai telecom regulatory body. Higher TRE scores for market entry (3.1), tariff regulation (2.8) and quality of services (2.9) are interrelated. That is, the NTC has clearly adopted a liberal licensing regime that has led to increased competition in many markets, in particular, the broadband and the international internet gateway markets. New entrants into the broadband market are guaranteed access to the local loop or can request for a WiMAX license. Abolition of the monopoly over the international internet gateway (IIG) was a major boon to the industry.

At the same time, its rather light-handed approach to tariffs regulation through the establishment of price ceilings that are mostly non-binding on operators, allow market mechanism to function without distortion. In general, greater competition in mobile, broadband, and IDD has resulted in lower costs and higher service quality that helped boost TRE scores in these categories. On the other hand, in areas where regulatory rules are required as market forces cannot deliver the desired outcome, such as interconnection, universal service and anti-competitive practices, TRE scores are slightly lower. They are 2.5, 2.6 and 2.7 respectively. This reveals NTC’s limited capability in dealing with more complicated regulatory rules that require profound understanding of the issue at hand and clear and transparent rules to ensure fairness and predictability of the regulatory regime. At the same time, the lack of a comprehensive database on key regulatory variables such as cost, capital expenditure, price levels and quality of service, etc. does not bode well for regulations that require these data.

Several comments expressed through the questionnaires addressed concerns about unclear and broad rules or regulations or the lack of detailed implementation regulations ranging from licensing, tariffs regulation to universal service obligation.

It should be noted, however, that certain TRE scores reflect not only the performance of the NTC, but also other external factors that affect the regulatory environment. For example, the low interconnection score can be attributed to the legal battle surrounding the arbitrary access regime established during the telecom concession era that are inconsistent with NTC’s current interconnection rules. As the Constitution upholds these concessions, it is beyond NTC’s control to solve the problem. Similarly, the much delay in the establishment of a joint frequency allocation committee between the National Telecommunications Commission and the National Broadcasting Commission (NBC) due to political wrangling contributed to low access scores as the NTC was not able to proceed with the auctioning of the 3G licenses without proper legal clearance.

To sum up, although the NTC has contributed significantly to a more competitive telecom market with its relatively liberal licensing policy, unclear regulatory rules pose a major problem for telecom operators and absence of proper quality regulation has left consumers at the mercy of service providers. Nevertheless, the Thai experience shows that competition can go a long way in protecting consumers in the absence of proper regulatory oversight.

Suggested Citation

Nikomborirak, Deunden and Cheevasittiyanon, Saowaluk, Telecom Regulatory and Policy Environment in Thailand: Results and Analysis of the 2008 TRE Survey (2008). Available at SSRN: https://ssrn.com/abstract=1555591 or http://dx.doi.org/10.2139/ssrn.1555591

Deunden Nikomborirak (Contact Author)

Thailand Development Research Institute ( email )

United States

Saowaluk Cheevasittiyanon

affiliation not provided to SSRN ( email )

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