Thailand’s Telecommunications Business Act B.E. 2544 (2001) (“TBA”) provides that a person operating a telecommunications service in Thailand requires a license. “Telecommunications Service” is a term 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 utilizing 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.”
A person is operating a “Telecommunications Business” if the nature of the business is to supply Telecommunications Services to other persons. Although the definitions are closely related, “Telecommunications Business” has a broader meaning than Telecommunications Service. The regulator must investigate the “nature” of the business to determine if it is a Telecommunications Service. If the regulator determines the business a Telecommunications Business, a license is required from the National Broadcasting & Telecommunications Commission (“NBTC”).
The NBTC’s Notification Re: Telecom Network Access and Interconnection B.E. 2556 (2013) (the “Notification”) imposes duties on licensees who own telecommunications networks, such as allowing other licensees to interconnect with their network on a fair, reasonable, and non-discriminatory basis. Licensees with a network shall submit a Reference Interconnection Offer (RIO) along with relevant supporting documentation that shows the principle and method for calculating interconnection charges to the NBTC for its review. The Notification also provides guidelines for the contractual arrangement and dispute resolution procedures in case of refusal of network access or interconnection.
“Telecommunications Network” means an equipment set directly connected, or connected through switches, for telecommunications between defined termination points, using any wire, radio-frequency spectrum, optical, or other electromagnetic system or combination thereof.
According to the TBA, three 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 may be divided by the NBTC into 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 operator may not own network equipment as a Type I is reselling 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 majority foreign ownership must obtain a Foreign Business License under most circumstances 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 being 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 for operators who, either with or without a Telecommunications Network, provide services (or lease out their network to operators who provide services) to a limited group of people. This type of license 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 as prescribed by the NBTC 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 public. 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 who obtain a Type III license may operate a Telecommunications Network to provide international private leased circuit (IPLC) or international 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).
Although a Type I operator cannot operate an IPLC or IIG service, it may purchase and resell these services from an IPLC/IIG licensed operator.
Each type of license is subject to different regulations and controls over business operations, from license acquisition to operator conduct. Such varying regulations recognize the fact that various licensees possess distinct types of networks and equipment. Trade competition also plays a factor in the level of oversight of an operator by the regulator.
In summary, the TBA differentiates Telecommunications Business operators by network possession, the purpose of services, and impact on consumers. Furthermore, the regulator imposes different obligations on Telecommunications Business licensees to facilitate network access and encourage fair competition.
For further inquiries, please contact John Formichella or Naytiwut Jamallsawat at info@fosrlaw.com
