Thai Government revives telecom pool plan

From The Bangkok Post

The government has revived a “pool” concept to further develop telecommunications after the collapse of the 3G auction plan last week.

The concept floated three years ago by the Surayud government envisions a single national network handling call traffic from private operators who would manage marketing and customer services. ICT Minister Juti Krairiksh said when he took office in June he would check on the plan. The government has now resurrected the proposal and dubbed it the “national broadband project”, appointing Mr Juti’s deputy, Trairong Suwannakhiri, to oversee its implementation.

The government plans to submit the proposal to the cabinet for consideration on Oct 12.

The idea has drawn a mixed reaction from operators and telecom experts. Sittichai Pookaiyaudom supported the telecom pool idea when he was ICT minister in the Surayud government in 2007. He said state telecom agency TOT Plc should serve as a network provider for the industry. All state enterprises with telecom networks should then be combined into “one single network” to serve as a national telecom highway to be leased to private companies.
But Mr Sittichai conceded the plan would be almost impossible now given the many state agencies and the different laws and ministerial authority. TOT and CAT Telecom also hold concessions with private companies. They would need mutual agreements to carry out any such activities.
Mr Sittichai said the ICT Ministry should draft a new law to govern the project to simplify the process.

Advanced Info Service CEO Wichian Mektrakarn agreed with the idea to establish a telecom pool as it would pave the way to eliminating redundant investments in network infrastructure. But he said the state must set up at least two Stock Exchange of Thailand-listed companies to operate and manage the telecom pool services to prevent monopoly problems from arising.

The Finance Ministry should hold no more than 49% in the two entities with the rest being held by private mobile operators together with other state enterprises such as the Electricity Generating Authority of Thailand. State enterprises would bring their assets and turn them into equity in the new companies.

An independent selection committee should be set up to choose qualified executives to manage the two companies. A service level agreement, a contract between network service providers and customers, should then be drafted to specify the service terms.

Suphachai Chearavanont, president and chief executive of True Corp, said the telecom pool model was a good idea as it could lower industry costs and encourage free market competition.

Pooling could include the sharing of infrastructure such as transmission towers or excess fibre optic wiring, where operators in need of higher capacity would draw on pooled resources. Or pooling could refer to network systems in active use, where operators share in backbone infrastructure. Pooling might also be done at the “last mile”, a reference to infrastructure tying homes and offices to the main networks.
It would require endorsement from the National Telecommunications Commission, which means the state would need to withdraw the court case on the NTC’s authority to move the project forward.

“This is still a chicken and egg question,” Mr Suphachai said.

Anuparp Thiralarp, an independent telecom expert, said a single national broadband network was a good idea but “just a dream”.

Implementation of the project would be difficult as it required cooperation from state enterprises under different departments and ministries.

Meanwhile, TOT plans to resubmit its 3G investment plan to the cabinet today.

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