3G Saga Taking Thailand Back To Bad Old Days Of Monopoly?

[webfact]

ANALYSIS

Saga taking country back to bad old days of monopoly?

By BUSINESS REPORTERS

THE NATION

Despite stumbling steps towards liberalisation, the telecom industry is now sliding back to the old and gruesome monopoly era, with state-owned enterprises TOT and CAT Telecom set to take the lead role in 3G services, leaving private operators shunted to the sidelines.

After a lengthy wait, TOT yesterday won the Cabinet's approval for its Bt20-billion project for a nationwide network of third-generation wireless broadband service. Next in line is CAT, which could stitch together another nationwide 3G network if it can complete the purchase of Hutchison Telecom's network.

This is becoming a reality through a series of developments that will turn TOT and CAT into the sole operators of nationwide 3G services, which allow better and faster flow of such data as text, e-mail, social media and video on mobile phones. These services are considered crucial in generating revenue in an industry where traditional voice revenue is declining because of intense competition.

The road back to the past started with CAT's legal challenge to the National Telecom-munications Commission's authority to grant 3G licences for the 2.1-gigahertz spectrum. The petition to the Central Administrative Court came as a true surprise, since public hearings on the 3G auction started a year ago and no questions had been raised about the NTC's authority.

The NTC was also thorough in preparing regulations for related services in the pipeline, including those governing MVNOs (mobile virtual network operators), or companies that can operate on sub-leased services from 3G bid winners.

The cancellation of the 3G auction left taxpayers in a hole. TOT has no clear business plan. Just after the Cabinet gave the nod, it said it would find an adviser to draw up a business plan. Without a business plan, how does it know that it needs Bt20 billion to roll out the services? Though this project involves no government funding or debt guarantee from the Finance Ministry, TOT's borrowing to finance the expansion would raise its interest expenses while lowering its revenue contribution to the government.

As the NTC is unsure about the scope of its licensing authority, TOT and CAT will play a dominant role. Although they are no longer in a position to grant concessions, they will be the sole providers of the new wireless broadband services. Companies will now have to approach TOT and CAT if they want to take part in this new, lucrative market. Without clear and transparent rules, this could take Thailand back to past nightmares.

After the NTC took over licensing authority, all players were subject to the same regulations and there have been fewer complaints about grey deals.

Before, ahead of auctions, there were reports of secret meetings of businesspeople and politicians holding influence over the two state telecoms. State officials with political backup were represented on the boards of directors to have a say in business deals. Tea money has been known as a cause of hefty service fees born by consumers.

Thais have been left with a sense of déjà vu, facing quite an irony. The Thaksin Shinawatra administration was accused of policy corruption, as TOT and CAT were then persuaded to agree to a change in the excise-tax regime that was said to have benefited telecom operators including Advanced Info Service - the flagship business of the Shinawatra family.

Let's pray that the history of unfair monopoly and corruption will not be repeated.

-- The Nation 2010-09-29

[Spee]

"Saga taking country back to bad old days of monopoly?"

Not just a monopoly, but a government-enforced nationalized monopoly .... just like Chavez in Venezuela, Castro in Cuba, Kim in N.Korea, the Myanmar junta, the Sauds, a multitude of African tyrants, and many many more. Not exactly a group one should want to be in. Not exactly Thailand's finest hour.

[rkidlad]

'The old days'? Did things change overnight while I was in bed?

[Thai at Heart]

I can't wait to see the prices of the service plans.

[Thailand]

"Saga taking country back to bad old days of monopoly?"

Not just a monopoly, but a government-enforced nationalized monopoly .... just like Chavez in Venezuela, Castro in Cuba, Kim in N.Korea, the Myanmar junta, the Sauds, a multitude of African tyrants, and many many more. Not exactly a group one should want to be in. Not exactly Thailand's finest hour.

Sadly the days of one step forward one step back is over and now simply backward steps.

A total disgrace.The powers that be should be ashamed of the image they are showing to other countries.

[Thai at Heart]

What worries me, is that this is seen in some way to be the "right" decision for consumers and the market. The desires of TOT to hang around in the market like a bad smell overwhelm completely the private alternative.

The structure of Thai telecoms has been debated over and over and everyone agrees it needs reform. Patently not any time soon.

[RKASA]

Gooooood morinnnng Thailand. Your coffee is on the table - now inhale.

Stop say whats that smell, everybody look what going down.

[meelousee]

What changed, in 1998 the tax was 7% for the operator and 10% for the user at the time new operators had to pay 33% of startup cost and were taxed very heavy. They (service operators) tried to change the tax but was unable to get it done, so they dumped, one of my old Loxinfo bills had 17% tax so for time used I got a bill for 6700 Baht

When Shincorp got the job done my monthly bill fell to 1700B by the time True started up my total bill mobile and ADSL internet is 800B per month.

So it took 10 years to get Thailand's cost of communications to an acceptable level.

Next up 3G with TOT and CAT leading your fixed line cost will double, so it would seem, anyway since they saw what Shincorp made when the tax laws were changed I think greed drove them to cut as deep as they could into the private sector file law suit and jockey for position in the 3G networks.

WIFI for 500.B per month? I will believe it when I see it. Other wise its back to SOE and monopoly games from TOT and CAT

[baabaabobo]

One step forward two steps back...

[Just1Voice]

TOT & CAT are government owned, which means, if this plan is approved and they go ahead with it, the Government will have total control of what is and isn't allowed on the internet. As I put in another thread: Welcome to George Orwell's "1984".

And to paraphrase the old t.v. show "The Outer Limits"

There is nothing wrong with your computer. Do not attempt to adjust it. We are controlling transmission. If we wish to make it louder, we will bring up the volume. If we wish to make it softer, we will tune it to a whisper. We will control the horizontal. We will control the vertical. We can roll the image, make it flutter. We can change the focus to a soft blur or sharpen it to crystal clarity. We will block anything we do not want you to see. We will record your ISP for prosecution of anything we deem inappropriate and send the Internet Police to arrest you. We will control all that you see and hear. We repeat: there is nothing wrong with your computer. You are about to participate in a great adventure. You are about to experience the awe and power of the Thai government, which reaches from the inner mind to... The Outer Limits.

[virtualtraveller]

I saw this coming months ago, a ploy to maintain a monopoly, that's how much of Asia still works and that's the mentality at CAT and TOT. We have 3G in Bangkok and cities, provided by TOT, you have to sign up for a year contract and if the service sucks, that's too bad, no refund. That's how you make money in Thailand. Ironically, if Thaksin was still in power we would have had 3G long ago, albeit skewed towards a certain company.

To be sure there is a lot of money at stake and the complex arrangement of all parties involved simply can't agree on how to divvy up the corruption pie. The amount the govt (and by extension TOT and CAT) will derive from the auction more than covers the losses that these two state behemoths will lose. The problem is, a different set of people now have control over who gets to skim off that, and TOT and CAT will now no longer have access to wads of cash to cover up their inefficiencies and mismanagement.

Also, you can't outrule the possibility that powerful individuals in CAT were encouraged to push for this freeze so that the present govt cannot approve 3G (and gain the lucrative kickbacks associated) during their watch, so that the opportunity passes on to the next govt, who might be run by Peua Thai.

TIT, never let the national interests get in the way of private greed. Who needs 3G anyway, except to beam live footage of protesters being shot.

[webfact]

Gooooood morinnnng Thailand. Your coffee is on the table - now inhale.

Stop say whats that smell, everybody look what going down.

Buffalo Springfield.... :-)

[chantorn]

One step forward two steps back...

Fully agree.

[animatic]

NO steps forward, it is just a slow slide into the past

[laocowboy2]

I saw this coming months ago, a ploy to maintain a monopoly, that's how much of Asia still works and that's the mentality at CAT and TOT. We have 3G in Bangkok and cities, provided by TOT, you have to sign up for a year contract and if the service sucks, that's too bad, no refund. That's how you make money in Thailand. Ironically, if Thaksin was still in power we would have had 3G long ago, albeit skewed towards a certain company.

To be sure there is a lot of money at stake and the complex arrangement of all parties involved simply can't agree on how to divvy up the corruption pie. The amount the govt (and by extension TOT and CAT) will derive from the auction more than covers the losses that these two state behemoths will lose. The problem is, a different set of people now have control over who gets to skim off that, and TOT and CAT will now no longer have access to wads of cash to cover up their inefficiencies and mismanagement.

Also, you can't outrule the possibility that powerful individuals in CAT were encouraged to push for this freeze so that the present govt cannot approve 3G (and gain the lucrative kickbacks associated) during their watch, so that the opportunity passes on to the next govt, who might be run by Peua Thai.

TIT, never let the national interests get in the way of private greed. Who needs 3G anyway, except to beam live footage of protesters being shot.

I really wonder whether the people making these decisions even understand what 3G (and 4G) is? Leaving aside the technical specs, they are infrastructure. In the same way as roads, electricity and ports. If you have poor infrastructure it costs. The costs may not be that visible as they are largely opportunity costs (companies locating a new plant in another country rather than Thailand, a regional HQ going somewhere else) but they are real. I live in India - a country where poor infrastructure is holding back the economy. One of the pluses of Thailand was its relatively good infrastructure but the world is changing. more and more of the global economy is madeup of services, often delivered remotely. For this you need good communications at the right (low) price rather than roads and ports. having a high priced quasi-governmental monopoly is the same as taxing exports highly - not a clever move.

[rubl]

All this for a service most (normal) Thais will find too expensive. I'm not even talking about coverage of the country up to it's far-flung borders. Get real

[NCFC]

And there was almost everybody telling me that things are different under Abhisit, that this new, squeaky-clean, Oxford-educated Prime Minister was going to fix corruption for once and for all. Let's put the blame for this tragedy exactly where it lies. Both TOT and CAT are state enterprises, which means they are directly under the control of the Government and it's Prime Minister, Abhisit. If he is anything more than just a puppet, he could stop this 3G nonsense immediately. But he can't and he won't. In fact, the cabinet, of which he is the leader, has just given approval to the plans of TOT and CAT.

I think this tells you all you need to know about Abhisit and the Democrats.

[hammered]

TOT and CAT have played the age old game brilliantly. Private companies challenged and defeated. Then role out their own save the country plan. Nice choreography.

The government that was meant to be allied to the burueacracy have just discovered they are the junior partner in the deal and cant go offering things that might negatively impact the bureacracy.

One thing to be sure of is that the price will now be higher than it would have been under other circumstances. Still the bureacracy will continue to have its coffers filled

[Thai at Heart]

Has Abhisit or Korn made a statement yet to justify this decision?

I will dearly love to see them explain how this is the best way to implement 3G in the country, because for the life of me, I cannot see one reason at all.

Edited September 29, 2010 by Thai at Heart

[visions]

The decisions is so plainly obvious as safeguarding the lining of pockets of the powers that be........ No wonder the political system in this country is such a joke.

And they clobbered Thaksin.....God he is lily white compared to what is going on now!! At least he achieved goals.....more than can be said of the present bumbling mob.

I am not a red supporter (or any other colouyr) but I can sure as hel_l see why they are starting to be vocal...and I mean starting.

There are so many instances of this blatant robbery going on..... just look at the new 50% bank charge rises....hits the poor, doesnt touch the rich.

Just as well I can only be a bystander in Thai politics...Im sure Id be standing on a stage to get shot down too.

[selftaopath]

"Saga taking country back to bad old days of monopoly?"

Not just a monopoly, but a government-enforced nationalized monopoly .... just like Chavez in Venezuela, Castro in Cuba, Kim in N.Korea, the Myanmar junta, the Sauds, a multitude of African tyrants, and many many more. Not exactly a group one should want to be in. Not exactly Thailand's finest hour.

Very well said. Shame no one in LOS i.e. Land of Scams will read this or care. Those who really care a/b Thailand want the best for the people and country. Freedom from blatant corruption/scheming/ and personal interests v.s. the good of the country is what most lovers of Thailand beg for. Pity the people in this country do not have any political representation.

Oh well. Guess when - or should I say if - the Thai people or business' in the "free world" become disenchanted enough they will demand a change. And throw the bums out - correction - throw them in jail :-)

[selftaopath]

Maybe if ALL of us "shared" these Thai Visa articles and comments with others in free countries the world would finally begin to understand Lack of Sanctions (LOS). I for one am sharing these with others on my facebook account. Will you?

[givenall]

'The old days'? Did things change overnight while I was in bed?

No go back to sleep, big business Monopoly never left Thailand, it was, is and will be here

[Deeral]

Well I never!

Same'ol same'ol

[MJo]

Oh dear. Soon there will be nothing else than CAT and TOT when Telenor (DTAC) and Singtel (AIS) will pull out.

Knowing CAT and TOT track record on implementing projects their 3G networks will be virtually useless after all the kickbacks if they indeed are able to complete the projects in next 5 to 10 years...

[Deeral]

Oh dear. Soon there will be nothing else than CAT and TOT when Telenor (DTAC) and Singtel (AIS) will pull out.

Knowing CAT and TOT track record on implementing projects their 3G networks will be virtually useless after all the kickbacks if they indeed are able to complete the projects in next 5 to 10 years...

Absolutely - but isn't it amazing how private or foreign enterprises loses out at the last minute only to be replaced by companies run by the "govt" etc ensuring that Thailand's elite will still keep their hands on the money!

[asiawatcher]

'The old days'? Did things change overnight while I was in bed?

[NCFC]

Oh dear. Soon there will be nothing else than CAT and TOT when Telenor (DTAC) and Singtel (AIS) will pull out.

Knowing CAT and TOT track record on implementing projects their 3G networks will be virtually useless after all the kickbacks if they indeed are able to complete the projects in next 5 to 10 years...

Absolutely - but isn't it amazing how private or foreign enterprises loses out at the last minute only to be replaced by companies run by the "govt" etc ensuring that Thailand's elite will still keep their hands on the money!

And there are many on TV who still think Abhisit as one of the "good guys". The 3G saga shows he is no different from that which has gone on before.

[Deeral]

Oh dear. Soon there will be nothing else than CAT and TOT when Telenor (DTAC) and Singtel (AIS) will pull out.

Knowing CAT and TOT track record on implementing projects their 3G networks will be virtually useless after all the kickbacks if they indeed are able to complete the projects in next 5 to 10 years...

Absolutely - but isn't it amazing how private or foreign enterprises loses out at the last minute only to be replaced by companies run by the "govt" etc ensuring that Thailand's elite will still keep their hands on the money!

And there are many on TV who still think Abhisit as one of the "good guys". The 3G saga shows he is no different from that which has gone on before.

At best he's a wimp, at woest an ex-public school boy with hard right leanings and a penchant for corporal punishment.

whoever thinks that because he was educated in "the West" (UK) that it makes him "OK" are basing their assumptions on thin air.

just take a look at other leaders educated in the West.......I'll start off with Pol Pot, you can Google the rest for yourself