In the wake of the survey, criticism has been levelled at the National Telecommunications Commission (NTC).
The survey, conducted by the Thailand Development Research Institute (TDRI), was part of a TRE survey also covering other countries in South and Southeast Asia. It covered seven aspects of telecom operations: implementation of interconnection, universal service obligation, market entry, access to scarce resources, tariffs, anti-competitive practices and quality of service. Each category was given a score out of a possible five points.
While interconnection in Thailand gained the lowest score of 2.59, universal service obligation (USO) got the highest rating of 2.85. The remaining five categories were rated between 2.63 and 2.79 points, giving Thailand an overall middle-range average of 2.7 points out of five.
The research director for TDRI's Sectoral Economics Programme, Deunden Nikomborirak, said the main reason interconnection was given its lowly ranking was delays in enforcing regulations related to interconnection obligations in fixed telecom services.
In mobile business, state-owned enterprises are not subject to the NTC's interconnection rules. The NTC fails to intervene to protect small players in the setting of interconnection charges by large players, and this makes interconnection regulations and regimes impractical and holds back improvements, she said.
In the broadband business, interconnection rules are unclear, while the NTC takes no action to settle disputes between state and private operators concerning the use of networks under build-transfer-operate schemes.
"Interconnection problems arise from terms and conditions specified in concession contracts signed in the pre-market-liberalisation era. For example, the private mobile concessionaires have refused to pay access charges to TOT because the NTC has ruled that interconnection fees can substitute for access charges," Deunden said.
Moreover, the NTC has shown no effort to ensure compliance with its interconnection rules, which require the payment of cost-based interconnection charges, she said.
The survey was conducted by asking the opinions of 50 people from three main categories in each country. They were stakeholders directly affected by sector regulation such as operators and equipment manufacturers; stakeholders who analyse the sector with broader interests, such as analysts and lawyers; and stakeholders with an interest in improving the sector to help the public, such as academics, journalists, and members of the public.
The survey gave the universal service obligation (USO) the highest score of all of Thailand's categories. The USO obliges service providers to ensure that people in all parts of Thailand have access to telecom services on an equitable basis. Deunden said the score reflected the NTC's USO rule, passed in 2006, forcing operators and providers to contribute 4 per cent of their revenue to a USO fund.
Last year, the NTC announced a USO plan that specified villages and education institutes where fixed line and broadband services would be installed, in order to promote greater transparency. However, Thailand's USO score is still below the average (three points out of five) because the USO rules are unclear and management of USO funds is opaque.
In the market-entry category, the survey revealed concern that the licensing regime for fixed telecom services is neither transparent nor efficient. As well, there are no clear rules regarding "right-of-way". (A right-of-way is a strip of land that is granted, through an easement or other mechanism, for transportation purposes, such as for a trails, driveways, rail lines or highways, including telecom networks.)
Meanwhile, 3G licensing is long overdue and appears to be discriminatory. In the broadband business, even though several licences have been issued, small operators face unfavourable regulatory rules.
In the existing broadband-licensing regime, there is a lack of clarity in definitions of type 2 - private telecom services - and type 3 - public network telecom services. Survey respondents said that many type 2 operators were subsidiary companies of type 3 operators, and it was unclear how this area could be efficiently enforced, because the NTC did not treat a type-3 licence holder and its subsidiary as the same undertaking.
Respondents pointed out that Section 46 of the new Telecom and Broadcasting Act 2010 contains a provision that may be interpreted as prohibiting capacity resale, and hence, mobile virtual network operators. These are companies that provide mobile-phone services but do not have their own licensed frequency allocation. Nor do they necessarily have all of the infrastructure required to provide mobile-telephone services.
"Thailand's low market-entry score reflects an unfavourable legal environment, regulatory inefficiency and non-transparency," Deunden said.
She said the access-to-scarce-resources score was due mainly to legal problems beyond the control of the NTC. These included delays in licensing 3G services and WiMax - a telecommunications protocol that provides fixed and mobile Internet access. Also, and once more, there are no rules governing compensation for 'right-of-way' use.
Although the NTC's pro-competition approach has subdued the need for regulation of tariffs, the commission has shown limited capability to set tariffs, even in areas where this is needed. The NTC has adopted a hands-off approach to tariffs regulation, hence Thailand's low score in the tariffs category.
Deunden said there were several comments during the survey concerning anti-competitive practices. These were directed at the NTC's enforcement, which was seen as unfair, including discriminatory treatment, refusal to deal, no decisions made on alleged predatory pricing, and no action to solve anti-competitive problems.
The final category assessed by the survey concerned quality of service, and that reflected market forces rather than the regulatory oversight of the NTC. The competitive cellular market received a higher score than the less competitive broadband market.
Deunden said that overall, the negative perception of the regulatory regime could be explained by an unfavourable regulatory environment associated with the legacy of telecom concessions; legal complications that circumscribe the authority of the NTC to allocate frequencies; unclear and unpredictable regulatory rules; and lack of rules, or biased enforcement, partially due to the NTC's inability to deal with complicated regulatory issues such as tariffs and anti-competitive practices.
The TDRI has urged the government to amend the Trade Competition Act 1999 to abolish exemption provided to state enterprises.
It has also urged the NTC to provide clear definitions of types 1,2 and 3 licences in order to promote transparency; to provide clear implementation regulations to ascertain regulatory predictability and transparency; to build up a cost database for key services and the industry; to urgently formulate "right-of-way" rules; to establish a clear and transparent accounting system for the management of the universal service obligation fund; and to conduct proper regulatory impact assessments of its proposed regulations.
The TDRI's Thailand study was part of an international TRE Survey covering Bangladesh, India, Pakistan, Sri Lanka, and the Southeast Asia region including the Philippines and Indonesia. Surveys in the other markets were conducted by Learning Initiatives on Reforms for Network Economies Asia (LIRNEasia), most of the programmes of which are funded by the International Development Research Centre of Canada (IDRC) and the Department for International Development of the UK (DFID).
LIRNEasia's chief operating officer Rohan Samarajaiva said Pakistan led the survey with clear (even though expensive) licensing conditions, while Thailand had low scores in mobile due to confusion over new policies and regulatory uncertainty.
