2008/SOM3/IEG/SEM2/006 Session: I Recent Trends on Investment Liberalization and Facilitation in Telecommunications in Thailand Submitted by: Thailand Seminar on Recent Trends on Investment Liberalization and Facilitation in Transport and Telecommunication Infrastructure Lima, Peru 13 14 August 2008
Recent Trends on Investment Liberalisation and Facilitation in Telecommunications in Thailand Prof. Prasit Prapinmongkolkarn National Telecommunications Commissioner & Dr. Bonggot Anuroj Senior Investment Promotion Officer International Affairs Bureau Office of the Board of Investment 1 Agendas: 1. Investment Opportunity Creation by NTC Regulations on Liberalization of Telecommunications Service and Promotion of Free and Fair Competition 2. Infrastructure 3. Liberal Investment Policy 4. Availability of Trained Human Resource
(I) Investment Opportunity Creation by NTC Regulations on Liberalization of Telecommunications Service and Promotion of Free and Fair Competition 1. The Act on the Organisation to Assign Radio Frequency and to Regulate the Broadcasting and Telecommunication Service, B.E. 2543 (AD. 2000) 2. Telecommunications Business Act, B.E. 2544 (AD. 2001) 3. Section 51 (14) to set up measures for fair and free competition between operators in telecommunication businesses and relating services, and for universal service obligations (I) Achievements 1. Liberalization of International Gateway, International Internet Gateway (IIG) and National Internet Exchange (NIX) 5 more International gateway operators arose International traffic in the past year increased 4 times more More investment in gateway business including leasing of International Private Leased Circuit (IPLC) and submarine cables from International Carriers, for example, VSNL International and others 4
(I) Currently CAT is only one Thai Submarine Cable Company Source: CAT Telecom 5 (I) Comparison of International Bandwidth and Domestic Bandwidth 6
(I) International Bandwidth 29.266 Gbps 7 (I) Domestic Bandwidth 216.96Gbps 8
(I) Number of Internet Subscribers 9 (I) Achievements 2. 3G and New Entry 17 new type III service providers, 93 ISPs and 11 type II service providers have been granted licenses since 2005. 3G In-band Migration, WiMax, Wi-Fi and VoIP investment is valued more than 3 billion US dollars etc. 10
(II) Infrastructure strong and growing Suvarnabhumi Intl. Airport: 45 million passengers/year and 3 million metric ton cargo Mass transit : Skytrain, Subway, Bus Systems all to be expanded Highway system: 64,000 km to all provinces World-class, Wi-Fi capabilities and inexpensive broadband widely available Deep sea ports: capacity over 5 million TEU 4,000 km rail, links to Malaysia, Singapore 57 industrial estates Low CBD Office rent: $12.5/sq. ft./year Communications: 11 60% cell phone use, broadband internet (II) Hub of Access to Regional Markets (Countries and populations) China: 1.3 billion Early Harvest :China-Thailand China-ASEAN FTA India: 1.1 billion Early Harvest Agreement Japan: 128 million Japan-Thailand Economic Partnership Agreement Taiwan: 23 million Thailand: 65 million GDP per capita: US$ 3,720 ASEAN: 550 million AFTA New Zealand: 4 million Closer Economic Partnership Australia: 20 million TAFTA 12
Source: BOT and NESDB Apr 2008 (II) Macro Economic Outlook Economic Forecasts 2005 2006 2007 2008E 2009E GDP Growth 4.5 5.1 4.8 4.8-6.0 4.5-6.0 Private consumption 4.5 3.2 1.4 4.5-5.5 4.5-5.5 Public consumption 10.8 2.3 10.8 5.0-6.0 10.0-11.0 Private Investment 10.6 3.7 0.5 9.0-10.0 11.0-12.0 Public investment 10.8 3.9 4.0 6.5-7.5 7.0-8.0 Export 15.2 17.0 18.1 13.5-16.5 9.0-12.0 Import 25.8 7.9 9.6 22.5-25.5 12.5-15.5 Trade balance (US$ billion) Current account (US$ billion) % year on year -8.3 1.0 12.0 0.0-2.0 (-6.0)-(- 2.0) -7.6 2.2 14.9 4.0-7.0 (-2.0)-1.0 13 14
Existing Industrial Estates ( 38 I.E. in 15 Provinces) AMPHUN Northern Region I.E. PICHIT Pichit I.E. SARABURI Saraburi I.E.(Kaengkhoi) Nong Khae I.E. AYUTTHAYA Hi-Tech I.E. Bang Pa-in I.E. Saharattananak orn I.E. BANGKOK Bangchan I.E. Lat Krabang I.E. Gemopolis I.E. RATCHABURI Ratchaburi I.E. V.R.M. I.E. SAMUT SAKHON Samut Sakhon I.E. Sinsakhon Printing City I.E. Maharajnakorn I.E. PRACHUAP KHIRI KHAN I-EA-T Owned Joint Venture KHON KAEN Khon Kaen I.E. CHACHOENGSAO Well Grow I.E. Gateway City I.E. TFD I.E. SAMUTPRAKARN Bangpoo I.E. Bangplee I.E. CHONBURI Hemaraj Chonburi I Amata Nakorn I.E. Pin Thong I.E. Pin Thong I.E. (Lae Laem Chabang I.E. Phanthong Kasem I RAYONG Map Ta Phut I.E. Hemaraj Eastern I.E Padaeng I.E. Eastern Seaboard I. Amata City I.E. Hemaraj Eastern Se Asia I.E. RIL I.E. 15 (III) Liberal Investment Policy No restrictions on foreign currency remittances No export requirement No foreign equity restrictions in manufacturing sectors and certain promoted services sector No local content requirement 16
(III) Basic BOI privileges and Measures Tax Incentives Corporate income tax holidays up to 8 yrs Additional 50% reductions of corporate income tax for 5 yrs may apply in zone 3 Import duty reductions or exemptions on machinery and raw materials Double deduction of public utility costs Deductions for infrastructure construction/installation costs Non-Tax Incentives Land ownership rights for foreign investors Permission to bring in foreign experts and technicians Work permit/visa facilitation One-Stop-Shop Visas & Work Permits are issued in 3 hours 17 Telecom Activities 1. Satellite telecommunications Conditions Classified as a priority activities 2. Telephone services Project must be approved by relevant government agencies Satellite Telecommunications will receive a corporate income tax exemption only for the overseas income. Telephone Services will receive only non-tax privileges. 18
(III) Promoted Projects in Satellite Telecommunications Company 1.Thaicom Public Co., Ltd. Thaicom Public Co., Ltd. Thaicom Public Co., Ltd. Status Project Start-Up 11/03/2004 Project Start-Up 26/09/1997 Project Start-Up 23/02/1993 Investment (million bath) 16,543.0 5,554.8 3,341.0 Product/ Service Transponder Service (1 Unit) -Baseband Service 45 Channel/Day -Satellite Communications (1 Unit) Satellite Communications (2 Units) 2. Samart Telecoms Public Co., Ltd. Project Start-Up 12/07/1990 345.0 Telecommunication Service (III) Promoted Projects in Telephone Services Company 1. TRUE Corporation Public Co., Ltd. 2. Total Access Communication Co., Ltd. Status Project Start-Up 16/06/1992 Project Start-Up 30/06/1992 Investment (million bath) 95,000.0 6,200.0 Product/ Service Telephone Service 2,000,000 number Cellular Service 70,000 number
(IV) Availability of Trained Human Resource The total number of all post and under graduates from all the universities in Thailand ranged from 300,000 to 500,0000 students per year. This is quite a considerable workforce for Thai industries. With the growing demand as well as investments in the telecom sector, human resources become a very important factor for industrial growth. 21 (IV) Availability of Trained Human Resource Every year, the number of graduates and post graduates from the Electrical Engineering Department from all the universities in Thailand ranged from 900-1000 students per year, which is quite significant, considering that most of these graduates ended up working in the telecom related industries. Plentiful human resource of well-trained engineers working in the telecom sector is estimated to be around a few ten thousand persons. 22
(IV) Availability of Trained Human Resource All University Graduates in Thailand Electrical Engineering Graduates 2004 2005 2006 2004 2005 2006 Source : Commission on Higher Education, Ministry of Education 23 The perfect opportunity 24