Deregulation
| Deregulation |
Although Thailand takes a free-market approach in many aspects of its national economic policy, the Thai Government still has a significant presence within some of the country's key economic sectors. Whether it is through state-owned enterprises, or by direct and indirect share holdings in firms that are organized as private companies, government agencies continue to have monopolies in telecommunication services, electricity distribution, tobacco products and rail transportation. In 1996, the share of GDP that came from government controlled industries amounted to 19.3 %, of which 52% of that amount was collected from the transportation and communications sector.1
As a result of their association with the International Monetary Fund (IMF) and their commitment to the World Trade Organization (WTO), Thailand has been taking steps to separate their government activities from the private sector.
However, much to the dismay of institutions like the IMF and the WTO, and probably to the thousands of investors who suffered after the devaluation of the baht, these changes cannot be implemented overnight. Instead, the process of privatization and deregulation will take many years, as it should. For there have been too many examples of countries that try to do too much too fast, and as a result, they end up hurting themselves more than helping.
Thailand made a commitment with the World Trade Organization (WTO) to liberalize their telecommunications services by 2006. In response to this deadline, the Thai Ministry of Transport and Communications (MOTC) identified the first three state-owned enterprises in the telecommunications sector that will undergo an aggressive deregulation schedule. These enterprises include The Communications Authority of Thailand (CAT), which provides international communication services; the Telephone Organization of Thailand (TOT), the provider of telecommunication services in Thailand and Neighboring Countries; and the Mass Communications Organization of Thailand (MCOT), which provides radio and television, broadcast services in Thailand.
Under the original plan, the Thai Government was supposed to institute a telecommunications holding company by October 2,000. This company would be completely owned by the government and called the National Telecommunications Commission (NTC). The responsibilities of NTC will include the allocation of licenses, manage spectrum distribution, and supervise the independent telecommunications operators.
All three of the enterprises will follow similar agendas. For the CAT Telecom Company, the transition from public to private is planned to happen according to the following sequence.
2001: They will sell 25% of its equity to a strategic partner and 3% to employees.
2002: They will offer 22% equity for private placement on the Thailand Stock Exchange.
2006: They will set up three or more subsidiaries to handle different services.2
Kogod School of Business American University Other Country Reports
Sources:
1 Country Commercial Guide Thailand, Fiscal Year 1999, Prepared by The Embassy of the U.S.A., Bangkok, Thailand
2 Mongkolporn, Usanne, "Thailand's Telecom Industry Deregulation to be Delayed," Bangkok, Thailand, September 25, 2000, http://www.newsbytes.com