May 2024
The Telecommunications Business Act B.E. 2544 (2001) (“TBA”) provides that a person operating a telecommunications service in Thailand is required to obtain a license. “Telecommunications Service” is defined under the Act on the Organization to Assign Radio Frequency and to Regulate Broadcasting and Telecommunications Services B.E. 2553 (2010) as:
“A service which provides the emission, transmission or reception of signs, signals, writing, digits, images, sounds, codes, or intelligence of any nature using Hertzian, wire, optical, electromagnetic, or any other system, or a combination thereof, and shall include satellite communication services or other business prescribed as telecommunications services by the NBTC, but not including sound broadcasting, television broadcasting, and radio communication services.”
It’s crucial to understand the distinction: a person is considered operating a “Telecommunications Business” if the nature of the business is to supply Telecommunications Services to other persons. While the definitions are closely related, “Telecommunications Business” has a broader meaning than Telecommunications Service. The regulator must delve into the “nature” of the business to determine if it falls under the category of a Telecommunications Service. A license from the National Broadcasting & Telecommunications Commission (“NBTC”) is mandatory if it is deemed a Telecommunications Business.
There are instances where businesses not in the telecommunications sector, such as automotive, may find themselves requiring a telecommunication license.
A fundamental principle is that the NBTC, as the regulatory authority, oversees the physical means of transmission and connectivity. Often, software and APIs are questioned as coming under the authority of the NBTC, which is not the case as of the date of this article.
Note the catch-all phrase in the definition of Telecommunication Service, “and shall include satellite communication services or other business prescribed as telecommunications services by the NBTC.” These sixteen words grant the NBTC significant authority. For example, data centers fall under NBTC authority and require a license. However, the NBTC does not consider cloud services as a Telecommunication Service unless the cloud service provides (or bundles) connectivity to the cloud service.
The NBTC’s Notification Re: Telecom Network Access and Interconnection B.E. 2556 (2013) (the “Notification”) is a comprehensive document that lays out the duties of licensees who own telecommunications networks. These include allowing other licensees to interconnect with their network on a fair, reasonable, and non-discriminatory basis. Licensees with a network must submit a Reference Interconnection Offer (RIO) along with relevant supporting documentation demonstrating the principle and method for calculating interconnection charges to the NBTC for review. The Notification also provides guidelines for the contractual arrangement and dispute resolution procedures in case network access or interconnection is refused.
“Telecommunications Network” means the set of telecommunications equipment directly connected or connected through switching equipment or any other equipment for telecommunications between defined termination points using any wire, radio-frequency spectrum, optical, or any other electromagnetic system or combination thereof.
According to the TBA, three types of telecommunications licenses are issued to Thailand operators: Type I, Type II, and Type III. Each license has different requirements, rules, and obligations that reflect the status of the operator. Each type of telecommunications license is further subdivided into either a license to operate a telecommunications service or a license to operate an internet service. The criteria and requirements, however, are the same for both. Therefore, the details below also apply to both types of service.
Type I licenses are for telecommunications operators who do not own a Telecommunications Network and whose business does not impact fair competition. When applying for a Type I license, the critical element is that the operator will not own network equipment, as Type I resells the network of Type II or Type III operators. Further, a Type I operator cannot control or operate a Telecommunications Network.
The TBA does not impose foreign shareholding restrictions on Type I licensed operators; however, foreign nationals or companies with a majority of foreign shareholders are subject to general laws on foreign business and must obtain a Foreign Business License from the Ministry of Commerce to operate their business. Therefore, it is standard practice for a Type I applicant to apply to the NBTC before applying with the Ministry of Commerce, the issuing agency for a Foreign Business License. The reason is that the Ministry of Commerce will want evidence that the application has the necessary Type I to operate its proposed Telecommunications Business under a Foreign Business License.
Type II licenses are granted to operators who, either with or without a Telecommunications Network, provide services (or who lease out their network to operators who provide services) to a limited group of people or services that cause no significant impact on fair competition, the public interest, or consumers. This license type is typically issued to operators who provide services exclusively to large organizations with business operations spread across a wide geographic area. Type II licensed applicants must fulfill all criteria the NBTC prescribes before applying. For example, a call-back/call re-origination service is one example of a Type II licensed business. In addition, the TBA prescribes that Type II licensed operators must be Thai or a company in which Thai nationals hold more than 50% of the total issued shares.
Type III licenses are granted to operators who possess Telecommunications Networks or provide services to the general public or services that cause a significant impact on fair competition and the public interest or require special consumer protection by the authorities. Telecommunications Services that fall under a Type III license include public switched telecommunications services, integrated services digital networks, public cellular mobile telephone networks, and public mobile data services. The TBA prescribes that Type III licensed operators must be Thai or a company where Thai shareholders hold more than 50% of the total issued shares.
Only operators with Type III licenses may operate a Telecommunications Network to provide international private leased circuit (IPLC) or internet gateway services. In this regard, the Type III licensed operator must also obtain an additional IPLC or IIG license (as the case may be).
The NBTC has the authority to issue notifications and further requirements for specific types of services, such as a Type III operator using foreign-owned satellites.
Although a Type I licensed operator cannot operate the IPLC or IIG service itself, it may purchase these services from an IPLC/IIG licensed operator and resell them to its customers under its name.
Each license type is subject to different regulations and controls over business operations, from license acquisition to operator conduct. Such varying regulations recognize that different licensees possess different types of networks and equipment. Trade competition also plays a factor in an operator’s regulatory oversight level.
In summary, the TBA differentiates Telecommunications Business operators by network possession, the purpose of services, and impact on consumers. Furthermore, to help stabilize the various Telecommunications Services operators offer, the regulator imposes different obligations on Telecommunications Business licensees to facilitate network access and encourage freer and fairer competition in the Thai telecoms sector.
The above is for general information purposes only and should not be relied upon as legal advice.
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