COMMUNICATIONS

Public good and private interest

Admirable progress has been seen in expanding the benefits of information and communications technology to a broader segment of the population. But regulatory reform to prepare the industry for future competition has gone nowhere

By KOMSAN TORTERMVASANA

Digital opportunity for all by 2010

Bridging the digital gap to provide equal access to information technology and improve the entire population's quality of life has been a cornerstone of the Thaksin Shinawatra government's policy.

While it pursues what is indisputably a noble social goal, the government is also grappling with the realities of the marketplace.

The challenge is made more complicated by public scepticism _ not always warranted _ about the true policy motivations of an administration led by the billionaire founder of the country's largest telecommunications conglomerate.

With just 18 months remaining before Thailand is obliged under a World Trade Organisation agreement to open its telecoms market to free competition, no credible regulatory framework exists for the industry.

"Digital opportunity for all by 2010" is the goal set by the CEO prime minister, who has delegated the task of achieving it to his managers.

The twin mandates of serving the public interest and promoting a free and fair market have fallen on the shoulders of a physician, which couldn't be more appropriate.

Dr Surapong Suebwonglee, the Information and Communications Technology Minister, has won high marks in his two years in office for initiatives intended to help citizens make the most of technology.

The jury is still out, however, on his efforts to drag the incestuous local telecoms industry, notably the two quarreling state telecoms enterprises, into the 21st century.

First, the good news.

More Internet users are expected to migrate to broadband as the price of a high-speed link has dropped to less than 1,000 baht per month.

In the spirit of low-cost housing, insurance and other Ua-arthorn (We Care) ventures, the government has decided that everyone deserves a chance to own a computer.

The Ua-arthorn computer project drew strong public interest with orders placed for 170,000 PCs and notebooks with prices starting as low as 10,000 baht, although a conservative target set by the minister was 400,000. The lowest-priced units came with the free Linux operating system, which prompted the head of Microsoft to express his frustration. Steve Ballmer wondered aloud in a meeting with US industry figures why he couldn't sell a Windows operating system and software for the equivalent of what a Thai farmer earns in six months.

His comments found their way back to Thailand and his local handlers issued a carefully worded statement to the effect that Mr Ballmer and Microsoft would try harder to accommodate the needs of the developing world.

Meanwhile, having succeeded in getting more computers into the hands of more people, Dr Surapong has been campaigning to ensure that once the computers are turned on, they can connect to the Internet _ and quickly.

Enter broadband. Casting envious glances at Korea, where nearly everyone has access to lightning-fast links, Dr Surapong campaigned to bring the cost of broadband service below 1,000 baht a month.

He was expecting the dysfunctional state duopoly of TOT Corporation and CAT Telecom to lead the way by offering cut-rate packages and shaming private operators into cutting modem costs and monthly fees.

But once private operators realised that they could extend broadband beyond a small, well-heeled base of corporate customers, prices miraculously started falling.

Big players such as TelecomAsia, now True Corporation, were the first to respond with pricing packages affordable for individuals. Other Internet service providers later followed suit. As a result, the number of broadband users surged from just 10,000 in late 2003 to more than 50,000 within the first half of 2004, with True Corp dominating the market with an 80% share.

Conspicuously absent from the broadband picture were the two state telecoms, citing the red tape that frequently entangles their decision-making processes.

Business conflicts between TOT Corp and CAT Telecom are at the root of several failures to move ahead with projects that could eventually prove beneficial to the public and lucrative for the operators.

Given the goal of having both TOT and CAT listed on the stock market and performing like normal businesses, their inability to grasp obvious commercial opportunities is a discouraging sign for Dr Surapong.

When he wasn't preoccupied with a series of TOT-CAT feuds, the minister was pursuing other goals to promote the connected society.

He has been the main force behind e-government, for example. While progress has been notable, wide variances remain in the quality and quantity of information and interaction offered on state agency web sites.

By next year, Dr Surapong hopes, there will be a Thailand Knowledge Centre, an Internet portal, and a single number _ 1111 _ that people can dial gain access to all government information.

His latest attempt to bridge the gap is a plan to rent bandwidth from the fibre-optic networks of the two state power enterprises, the Metropolitan and Provincial electricity authorities. The utilities use the networks mainly for internal communication and have spare capacity. Tapping into that capacity would reduce the need for state and private telecoms operators to invest huge sums developing their own networks.

Making international direct dialling (IDD) cheaper has also been a pet project of the minister. Dr Surapong wants to see rates fall across the board by up to 70%, or as low as nine baht a minute, to make the country's telecom service competitive with Singapore's.

But once again, squabbling between TOT Corporation and CAT Telecom has stalled progress, although TOT has announced plans to expand its IDD service in July. It will continue to rent an international gateway from Telekom Malaysia because CAT Telecom refuses to lower its charges.

Meanwhile, the fledgling Thai Mobile service is a prime case study of the poor relationship between the two state telecoms.

With TOT holding 58% and CAT 42%, making basic strategic decisions has been difficult for the joint venture. Dr Surapong has been pressing CAT Telecom to reduce its holding to 5%, arguing that it already has its own wireless venture through its partnership in Hutch. If TOT had full control of Thai Mobile, the minister reasoned, the service might finally take off.

But all telecom operators, public and private, share frustration over the lack of a clear set of rules for the industry.

The National Telecommunications Commission (NTC), which the 1997 Constitution said was to be formed by October 2000, is nowhere to be seen. The process of selecting members for the powerful regulatory body has gone back to square one, with 14 candidates being screened _ again _ in the hope that seven can be chosen.

While the industry waits for a regulator, work continues at a snail's pace to unwind the telecoms concessions granted to private operators by TOT and CAT Telecom in their former incarnations as the Telephone Organisation of Thailand and Communications Authority of Thailand.

At issue are about 30 fixed-line, mobile, satellite, data and other concessions and the revenue-sharing arrangements associated with them.

TOT Corp obtains 30% of its funds from revenue-sharing payments and the unwinding of the concessions has raised questions among investors about its revenue streams and future profits. As a result, the prospect of listing TOT or CAT Telecom on the stock market anytime soon appears remote.