Bangkok--25 Oct--True Corporation
Move will promote fair and free competition, benefiting the Thai people without lowering Government revenue. Private companies’ tax payments will be transparent and easily verified.
True Corporation has welcomed the new ICT Minister’s initiative on concession conversion as being in line with international law on the liberalization of the telecommunications industry. True believes that if the Government allows fair and free competition Thai people will benefit while the Government will not lose revenue but will benefit from a stronger and growing telecommunications sector.
Private sector profits will be passed to Government in terms of tax revenue which will be transparent and easily verified. True is willing to pay its revenue share to the NTC on the condition that every operator, including government agencies, pay according to the same standard.
True President and CEO Mr Supachai Chearavanont says this initiative should have happened long ago since it follows international practice on telecommunication liberalization law. Every country that has liberated its telecommunications industry has cancelled its concession contracts and operators instead work under telecom licenses on a level playing field. A telecommunications sector which operates under a state monopoly is ineffective and does not benefit the whole of society because without competition there is no motivation to behave in a transparent way.
“Continually developing ICT technology has led to a revolution in the reorganization of the telecommunications industry and to changes in the role of government regulators. Private operators are providing services to create a fair and competitive environment, in which consumers gain maximum benefit with the greatest range of choices,” said Mr Supachai.
“It has been proven that a state monopoly cannot benefit society as it results in a shortage of services, expensive prices, no choices for consumers and no transparency in the industry, providing opportunities for corruption. This does not mean that government officials are incompetent or lack integrity, but rather that the system of a state-run monopoly is no good.’”
Mr Supachai also suggested that state agencies should lead the way in driving telecom sector liberalization and development for the sake of Thai consumers and the economy. At the same time the Government or the NTC should consider helping state agencies to compete and grow.
“Government should lead the changes. In many countries, there is an interim policy during the liberalization process to help state agencies through the transition stage — this could be accomplished by the Government itself or through the NTC. For example, a state agency may receive USO (Universal Service Obligation) exemption and be able to offset part of its investment costs from the USO where the Government gives the approval. Most state agencies around the world are able to cope with such changes and become more competitive and increase their growth.”
Mr. Supachai said concession contracts should have been terminated when the telecommunications law was announced. Concession conversions should have taken place at the same time as the NTC was established, in line with the practice in other countries.
However, political sensitivities in Thailand instead resulted in the creation of two systems that were totally different: a monopoly system in which the Government owned everything, and a fairly liberalized system. These different systems led to disputes between private operators and the state agency, in which the Government took no action but let the two parties try to solve the dispute themselves. Conflicts of interest meant there could be no resolution.
The best solution would have been to terminate the concession contracts on the establishment of the NTC and let the NTC issue telecom licenses to each operator on a fair basis.
Mr Supachai also addressed concerns that on converting the concession contracts, private operators will get all the benefits because they do not have to pay revenue sharing. He said telecom operators are all leading companies that are able to operate their business efficiently. So under a fair and free competitive environment they are confident that they will be able to compete to provide a range of excellent services to Thai consumers. Some of the profits generated by their businesses will be paid to the Government as taxes in a transparent way that can easily be verified. The Government can then use that money to improve the Thai economy and the wellbeing of Thai people and society more than they have done in the past.
Mr Supachai also said concerns that state agencies may not survive concession conversions were unfounded. In countries where concession contracts had been terminated, state agencies are still able to go about their business and retain the opportunity to strengthen and grow with government support. In Thailand the NTC can support state agencies using the USO.
“The concession conversion initiative from the new ICT Minister is the best thing for the country, for the industry and for every Thai consumer. Saying the Government will lose from concession conversion is not correct. In reality, Thai consumers are the ones who lose because they are the ones who pay. All revenues we collect are from Thai people so the revenue sharing we pay is a cost that we have to pass on to the Thai consumer. Moreover, if we continue operating under the concession contracts, Thai people will not benefit from fair and free competition,” Mr Supachai said.
“For True, if the termination of the concession contract will benefit the private sector, True is willing to pay the license fee and put the money in the USO (for the NTC) even if it is the same amount as we pay the state agencies in revenue sharing. True will do this only on the condition that other operators, including state agencies, pay the same rate. If we can do this everyone will compete on the same terms,” Mr. Supachai concluded.
About True Corporation Plc
True Corporation Public Company Limited is Thailand's only fully-integrated communication solutions provider, convergence leader and prime lifestyle enabler. We provide consumers, small and medium enterprises, and corporations with a full range of voice, data and multimedia solutions customized to meet their needs. We are the largest wireline service provider in Bangkok, the largest broadband provider in the country and a major player in the wireless, cellular and Internet markets. Principal subsidiary companies in the True Group include UBC, Thailand's dominant pay television operator, and True Move, a major mobile phone service provider. True gives people the freedom to live different lifestyles, by providing them with the power to communicate as well as access knowledge, information and entertainment, whenever, wherever, and how they like. For more information please visit: http://www.truecorp.co.th
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