Monday, January 8, 2018

Types of Telecommunications Business Licenses in Thailand





The Telecommunications Business Act B.E. 2544 (2001) (“TBA”) provides that a person operating a telecommunications service in Thailand is required to obtain a license. “Telecommunications Service” is defined under the Act on the Organization to Assign Radio Frequency and to Regulate Broadcasting and Telecommunications Services B.E. 2553 (2010) as:

 “A service which provides the emission, transmission or reception of signs, signals, writing, digits, images, sounds, codes, or intelligence of any nature by means of Hertzian, wire, optical, electromagnetic, or any other system, or a combination thereof, and shall include satellite communication services or other business prescribed as telecommunications services by the NBTC, but not including sound broadcasting, television broadcasting, and radio communication services”.

A person is considered as operating a “Telecommunications Business” if the nature of the business is to supply Telecommunications Services to other persons. Although the definitions are closely related, “Telecommunications Business” has a wider meaning than Telecommunications Service as the regulator is required to look into the “nature” of the business in order to determine if it is a Telecommunication Service. If the business is deemed to be a Telecommunications Business, then a license is required from the National Broadcasting & Telecommunications Commission (“NBTC”).
The NBTC’s Notification Re: Telecom Network Access and Interconnection B.E. 2556 (2013) (the “Notification”) imposes duties on licensees who own telecommunications networks, such as allowing other licensees to interconnect with their own network on a fair, reasonable, and non-discriminatory basis. Licensees with a network shall submit a Reference Interconnection Offer (RIO) along with relevant supporting documentation that shows the principle and method for calculating interconnection charges to the NBTC for its review. The Notification also provides guidelines for contractual arrangement as well as dispute resolution procedures in case of refusal of network access or interconnection.

Pursuant to the TBA, three types of telecommunications license are issued to operators in Thailand: Type I, Type II, and Type III. Each license has different requirements, rules, and obligations that reflect the status of the operator. Each type of telecommunications license is further subdivided into either a license to operate a telecommunications service or a license to operate an internet service. The criteria and requirements, however, are the same for both. The details below also apply to both types of service.

Type I licenses are for telecommunications operators who do not own a telecommunications network and whose business does not have an impact on fair competition. A Type I license is issued after the operator files an application. The TBA does not impose foreign ownership restrictions on Type I licensed operators; however, foreign nationals or companies with a majority of foreign shareholders are subject to general laws on foreign business and are required obtain a Foreign Business License from the Ministry of Commerce in order to operate their business.
Type II licenses are granted to operators who, either with or without a telecommunications network, provide services (or who lease out their network to operators who provide services) to a limited group of people, or services that cause no significant impact on fair competition, the public interest, or consumers. This type of license is typically issued to operators who provide services exclusively to large organizations whose business operations are spread across a wide geographic area. Type II licensed applicants must fulfill all criteria as prescribed by the NBTC prior to applying. A call-back/call re-origination service is one example of a Type II licensed business. The TBA prescribes that Type II licensed operators must be Thai or a company in which more than 50% of the total issued shares are held by Thai shareholders.

Type III licenses are granted to operators who possess a telecommunications network and provide services (or who lease out their network to other operators who provide services) to the general public, or services that cause a significant impact on fair competition, the public interest, or require special consumer protection. Telecommunications Services that fall under a Type III license include public switched telecommunications services, integrated services digital networks, public cellular mobile telephone networks, and public mobile data services. The TBA prescribes that Type III licensed operators must be Thai or a company in which more than 50% of the total issued shares are held by Thai shareholders.

Only operators who obtain a Type III license may operate a telecommunications network to provide international private leased circuit (IPLC) services and/or international internet gateway services. In this regard, the Type III licensed operator must also obtain an additional IPLC and/or IIG license (as the case may be). Although a Type I licensed operator cannot by itself operate the IPLC or IIG service, it may purchase these services from an IPLC/IIG licensed operator and resell the same to its customers under its own name.

For the purposes of definition, “Telecommunications Network” means the set of telecommunications equipment that is directly connected or connected through switching equipment or any other equipment for telecommunications between defined termination points by means of any wire, radio-frequency spectrum, optical, or any other electromagnetic system or combination thereof.
Each type of license is subject to different regulations and controls over business operations, from license acquisition to operator conduct. This is in recognition of the fact that different licensees possess different types of networks and equipment. Trade competition also plays a factor in the level of oversight of an operator by the regulator.


In summary, the TBA differentiates Telecommunications Business operators by network possession, the purpose of services, and impact on consumers. In order to help stabilize the various Telecommunications Services offered by operators, the regulator imposes different obligations on Telecommunications Business licensees, with the intention of facilitating network access and encouraging freer and fairer competition in the Thai telecoms sector.

The above is for information purposes only and should not be relied upon as comprehensive legal advice. 

Copyright John P. Formichella 2018

Thursday, November 16, 2017

BRS successfully applies for Type 1 telecoms license in Thailand for International Gateway services





John P. Formichella

Blumenthal Richter & Sumet (BRS) is pleased to announce the first issuance of a Type 1 telecoms license for IIG (International Internet Gateway) services in Thailand. Until now, IIG services have been reserved exclusively for Type 3, IIG-licensed operators.

Authorization to conduct telecoms business in Thailand is in the form of licenses issued by the National Broadcasting & Telecommunications Commission (NBTC). Three types of license are available: Type 1, Type 2, and Type 3. A Type 1 license is issued to a telecoms business operator that:

(i) provides services without a telecommunications network of its own; and
(ii) provides services that have been deemed appropriate to be liberalized and that are open to competition between service providers.

Examples of Type 1 telecoms services include internet access services, international calling card services, reselling public switched telecommunications services, etc.

Our Tech-Media-Telecoms attorneys, led by partner John Formichella, advised on the corporate and transaction structuring of the application to the NBTC, which regulates Thailand’s telecommunications fairly, transparently, and equitably on the basis of international standards.

Following a stringent 2-month review procedure, permission was granted for the provision of IIG services to a Type 1 telecoms business operator, which is the first such successful application of its kind in Thailand.


More information regarding the different types of telecoms licenses that are available can be found here: http://brslawyers.com/news/types-telecommunications-business-license-thailand/


Thursday, October 5, 2017

Thailand Chapter: Tech, Media, Telecommunications, Getting the Deal Through



John P. Formichella, partner and head of the firm’s Tech, Media & Telecoms practice group, is pleased to contribute to the 2017 edition of Getting the Deal Through: Telecoms and Media as jurisdiction author for Thailand.

Getting the Deal Through: Telecoms and Media is a key legal industry publication that provides a comprehensive overview of the regulatory environment of the telecoms and media sectors in the world’s major jurisdictions.

To read the Thailand chapter on Tech, Media, and Telecommunications, please see the following Link:

http://brslawyers.com/wp-content/uploads/2017/09/Getting-the-Deal-Through-Telecoms-Media-2017-Thailand.pdf

For further inquiries, please contact John at john@brslawyers.com


Tuesday, August 15, 2017

Deadline for OTT providers to register with Thailand's Broadcasting Regulator Postponed






The National Broadcasting & Telecommunications Commission (the “NBTC”) has postponed the deadline for Over-The-Top (“OTT”) providers to register with the NBTC until the regulatory framework for OTT is officially enacted. The NBTC board has appointed an OTT sub-committee to draft regulations for the NBTC’s approval within 30 days. The NBTC will then hold a public hearing and publish the regulations in the Government Gazette. The entire legislative process is expected to last 90 days.

The NBTC defines OTT as: “Sound broadcasting services or television services through other networks that are not sound broadcasting networks or television networks.” At present, there are no specific regulations that govern OTT business in Thailand. Any issues that relate to OTT service content—such as violations of copyright, inappropriate or harmful content, etc.—are governed by existing regulations such as the Computer Crime Act B.E. 2550 (2007). However, such regulations do not have jurisdiction over OTT providers that operate outside Thailand.

In drafting the OTT regulations, the NBTC has hired independent advisors to compare patterns of regulations and their effect on OTT in other countries. It is useful to consider existing regulations in order to gain an understanding of the likely framework of the NBTC’s regulations. Currently, six countries have regulations in place to govern OTT services, which are Australia, South Korea, Malaysia, Singapore, the U.K., and the U.S.

Content control

All six countries have regulations in place to control OTT service content. All six countries also provide a content rating system to prevent violations of copyright and inappropriate or harmful content.

Net neutrality

In the U.K. and the U.S., OTT regulations have been enacted to maintain “net neutrality,” which allows each service provider equal opportunity to use the network by forbidding the network owner from unfairly creating obstacles or reducing network quality for particular OTT providers.

Licensing and registration

In South Korea, the platform provider and the content provider are each required to obtain a license for business operation and to register content with the relevant government authority. In addition, the South Korean government limits foreign share ownership in entities that operate OTT services to 49 per cent and limits the market share of OTT service providers to one-third of overall market share in broadcasting and television business.

In Singapore, OTT providers are required to obtain a license for business operation. Foreign entities that operate OTT services in Singapore are also bound by such requirement.

As for Thailand, it is expected that the NBTC will enact similar regulations to control OTT service content, and provide a content rating system to prevent violations of copyright and the dissemination of inappropriate or harmful content. Net neutrality measures to support equal opportunities among providers are also expected.

Regarding licensing and registration requirements, the NBTC’s independent advisors have recommended dividing the enforcement period for the NBTC’s pending regulations into two periods: in the first period, the NBTC should require the OTT provider to register with the NBTC so it can analyze the provider’s data and the effects of its OTT service; in the second period, the NBTC should implement a licensing and registration system for the purpose of ensuring equality of opportunity for providers.

It is also expected that the NBTC will cooperate with the Revenue Department to impose tax on OTT service providers.


For more information, contact John P. Formichella at: john@brslawyers.com


Wednesday, November 23, 2016

Thailand updates Counter Corruption Act



Thailand has just updated is counter corruption laws as part of its efforts to comply with the United Nations Convention Against Corruption. For further information on these amendments, click the link below:


For more information, please contact me here: john@brslawyers.com

Wednesday, August 3, 2016

Foreign Direct Ownership at the Time of Incorporating in Thailand



By John P. Formichella




Rule or policy changes at the Ministry of Commerce, however slight, may have material effects on the incorporation process in any jurisdiction. Registering a limited company at the Thai Ministry of Commerce (MOC) does not normally require submission of any document issued by a bank as supporting evidence. However, in certain cases, such supporting evidence is necessary.

Submission requirements (Guidelines) were issued by the MOC’s Central Partnership & Company Registration Office on 01 April 2015.

Under the Guidelines, registration of a limited company with an initial capital exceeding THB 5,000,000 (Five Million Thai Baht) requires submission of a document issued by a bank, which certifies receipt of cash contribution by an authorized director. Where the registered capital of the company exceeds THB 5,000,000, the Guidelines also apply to the registration of a capital increase.

The MOC has also set tighter rules on the incorporation of a limited company if there is foreign direct ownership at the time of incorporation. In the event that a foreigner either (i) holds one (1) share in a limited company or (ii) is an authorized director of a limited company, every Thai shareholder of the company has to submit a document issued by a bank certifying or showing his/her financial status. In this regard, the document must show a total balance that is consistent with the amount of cash that each Thai shareholder contributed to the incorporation.



This article contains information in summary form and shall be understood as general information only. It is not to be understood as and is not to be relied upon as legal advice.


© John P. Formichella. All rights reserved.

Thursday, June 23, 2016

Evidence of Negotiated Settlement in a Private Setting: Custom & Practice - Thailand


John P. Formichella


Negotiating a settlement to a dispute in a private setting  is a challenge. Many obstacles to overcome in these types of situations including, but not limited to, each side may not understand all the relevant issues, know exactly what they respectively want, and respective mindsets may be blurred by emotions such as pride, passion, or perceived loss of face. Overall, there are trust issues lurking in the background, and there is no third party refereeing the process. Going through the often difficult process of negotiating a settlement in a private setting and then finding all of that hard work is wasted for lack of an evidentiary record that may be necessary for court purposes could be devastating. Although there is no strict formula or process to recording a settlement in a private setting, the following is worth consideration:






“Without Prejudice”
Not a recognized concept in Thailand
Judges are not obligated to follow this concept and may accept written evidence at their discretion
Private negotiation arrangements
Dependent on the parties agreement as to agenda or format
Nothing spoken may be used by the parties as evidence in court; an admission or oral agreement is not admissible. The standard practice in Thailand is for meeting minutes to be written and then signed by each side (the authorized signatory of each party in the case of corporates). Such meeting minutes, if signed by each party, are admissible as evidence for the courts.
Informal negotiation with unsigned written meeting minutes
Dependent on the parties agreement as to agenda or format
meeting minutes unsigned will not have evidentiary value in court.
Informal negotiation with signed written meeting minutes
Dependent on the parties agreement as to agenda or format
Meeting minutes signed by authorized representatives may be used as evidence in court (as per above).
Court mandated mediation
At the Courthouse normally with a retired judge
No oral expressions may be used against either party. The sessions will not be recorded.  If an agreement is reached in a mediation session, a written agreement will be prepared and reviewed by the mediator, which will be sent to court for review. After court review, the court will endorse the agreement. The agreement will be enforceable in the event of a breach of the settlement.


The above should is not intended to be legal advice and should not be relied upon as legal advice accordingly.

© John P. Formichella, 2016 All Rights Reserved