recent trends on investment liberalization and...

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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

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Recent Trends on Investment Liberalisation Recent Trends on Investment Liberalisation and Facilitation in Telecommunicationsand Facilitation in Telecommunications

in Thailandin Thailand

Prof. Prasit Prapinmongkolkarn

National Telecommunications Commissioner

&

Dr. Bonggot AnurojSenior Investment Promotion Officer

International Affairs BureauOffice of the Board of Investment

Agendas:1. Investment Opportunity Creation by NTC

Regulations on Liberalization of Telecommunications Service and Promotion of Free and Fair Competition

2. Infrastructure3. Liberal Investment Policy4. 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) Achievements1. 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

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(I) Currently CAT is only one Thai Submarine Cable Company

5Source: CAT Telecom

(I) Comparison of International Bandwidth and Domestic Bandwidth

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(I) International Bandwidth 29.266 Gbps

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(I) Domestic Bandwidth 216.96Gbps

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(I) Number of Internet Subscribers

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(I) Achievements2. 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.

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(II) Infrastructure strong and growing

Mass transit : Skytrain, Subway, Bus Systems all to be expandedHighwayHighway system: 64,000 km to all provinces

Deep sea ports: : capacity over 5 million TEUcapacity over 5 million TEU4,000 km rail4,000 km rail, links to Malaysia, Singapore5757 industrial estatesindustrial estates

World-class, WiWi--Fi Fi capabilities and inexpensive broadband broadband widely available

Communications:60% cell phone use, broadband internet

Low CBD Office rent: $12.5/sq. ft./year

Suvarnabhumi Intl. AirportSuvarnabhumi Intl. Airport: 45 million passengers/year and 3 million metric ton cargo

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ASEAN: 550 million AFTA ASEAN: 550 million AFTA

Australia: 20 million TAFTAAustralia: 20 million TAFTA

China: 1.3 billion China: 1.3 billion Early Harvest :ChinaEarly Harvest :China--Thailand Thailand ChinaChina--ASEAN FTA ASEAN FTA

India: 1.1 billion India: 1.1 billion Early Harvest Agreement Early Harvest Agreement

Japan: 128 million Japan: 128 million JapanJapan--Thailand Economic Thailand Economic Partnership AgreementPartnership Agreement

Taiwan: 23 million Taiwan: 23 million

Thailand: 65 millionThailand: 65 millionGDP per capita: US$ 3,720GDP per capita: US$ 3,720

New Zealand: 4 million New Zealand: 4 million Closer Economic PartnershipCloser Economic Partnership

(II) Hub of Access to Regional Markets (Countries and populations)

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(II) Macro Economic Outlook(II) Macro Economic Outlook

Source: BOT and NESDB Apr 2008

Economic ForecastsEconomic Forecasts 20052005 20062006 20072007 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 12.5-15.5Trade balance (US$ billion)

-8.3 1.0 12.0 0.0-2.0 (-6.0)-(-2.0)

Current account (US$ billion)

-7.6 2.2 14.9 4.0-7.0 (-2.0)-1.0

% year on year

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AMPHUNAMPHUNNorthern Region

I.E.PICHITPICHIT

Pichit I.E.SARABURISARABURI

Saraburi I.E.(Kaengkhoi)Nong Khae I.E.

AYUTTHAYAAYUTTHAYAHi-Tech I.E.

Bang Pa-in I.E.Saharattananak

orn I.E.BANGKOKBANGKOK

Bangchan I.E.Lat Krabang I.E.

Gemopolis I.E.RATCHABURIRATCHABURIRatchaburi I.E.

V.R.M. I.E.SAMUT SAMUT

SAKHONSAKHONSamut Sakhon

I.E.Sinsakhon

Printing City I.E.Maharajnakorn

I.E.PRACHUAP PRACHUAP

KHIRI KHANKHIRI KHAN

KHON KAENKHON KAENKhon Kaen I.E.

CHACHOENGSAOCHACHOENGSAOWell Grow I.E.Gateway City I.E.TFD I.E.SAMUTPRAKARNSAMUTPRAKARNBangpoo I.E.Bangplee I.E.CHONBURICHONBURIHemaraj Chonburi IAmata Nakorn I.E.Pin Thong I.E.Pin Thong I.E. (LaeLaem Chabang I.E.Phanthong Kasem IRAYONGRAYONGMap Ta Phut I.E.Hemaraj Eastern I.EPadaeng I.E.Eastern Seaboard I.Amata City I.E.Hemaraj Eastern SeAsia I.E.RIL I.E.

Existing Industrial Estates ( 38 I.E. in 15 Provinces) Existing Industrial Estates ( 38 I.E. in 15 Provinces)

I-EA-T Owned Joint Venture

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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

(III) Liberal Investment Policy

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Tax IncentivesCorporate 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 materialsDouble deduction of public utility costsDeductions for infrastructure construction/installation costs

Non-Tax IncentivesLand ownership rights for foreign investorsPermission to bring in foreign experts and techniciansWork permit/visa facilitation

One-Stop-Shop Visas & Work Permits are issued in 3 hours3 hours

(III) Basic BOI privileges and Measures

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• Conditions

• Classified as a priority activities

• Project must be approved by relevant government agencies

1. Satellite telecommunications

2. Telephone services

• Telecom Activities

• Satellite Telecommunications will receive a corporate income tax exemption only for the overseas income.

• Telephone Services will receive only non-tax privileges.

(III) Promoted Projects in Satellite Telecommunications(III) Promoted Projects in Satellite Telecommunications

Satellite Communications(2 Units)

3,341.0Project Start-Up23/02/1993

Thaicom Public Co., Ltd.

Telecommunication Service

345.0Project Start-Up12/07/1990

2. Samart Telecoms Public Co., Ltd.

-Baseband Service 45 Channel/Day-Satellite Communications (1 Unit)


Thaicom Public Co., Ltd.

Transponder Service (1 Unit)


1.Thaicom Public Co., Ltd.

Product/Service

Investment(million bath)

StatusCompany

Cellular Service 70,000 number


2. Total Access Communication Co., Ltd.

Telephone Service 2,000,000 number


1. TRUE Corporation Public Co., Ltd.

Product/Service

Investment(million bath)

StatusCompany

(III) Promoted Projects in Telephone Services(III) Promoted Projects in Telephone Services

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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.

(IV) Availability of Trained Human Resource

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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.


2005

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2006

Electrical Engineering Graduates

20042004 2005 2006

All University Graduates in

Thailand


Source : Commission on Higher Education, Ministry of Education

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