Home 
Regions and Countries Regional Cooperation Regional Cooperation Initiatives Greater Mekong Subregion Publications Proceedings of Ministerial, Forum, and Working Group Meetings Fifth Meeting of the Subregional Telecommunications Forum (STCF-5)
Fifth Meeting of the Subregional Telecommunications Forum (STCF-5)IntroductionThe Fifth Meeting (the "Meeting") of the Subregional Telecommunications Forum (the "STCF") was held in Bangkok, Thailand from 21 to 22 February 2001. The Meeting was hosted by the Royal Thai Government, in cooperation with the Asian Development Bank (the "ADB"). The countries of the Greater Mekong Subregion (the "GMS") and ADB expressed their appreciation to the Royal Thai Government, in particular, the Post and Telegraph Department of the Ministry of Transport and Communications (the "PTD") for the hospitality, organization, and cooperation provided to the Meeting. The objectives of the Meeting were as follows: (i) to discuss the proposed GMS: Telecoms Backbone Project Phase I, which is one of the high priority projects in the GMS; (ii) to facilitate the implementation of STCF Work Plan; and (iii) to discuss the relationship between poverty reduction and information and communications technology ("ICT"). The Meeting Agenda, which is attached as Appendix 1, included the following: (i) country presentations on ongoing telecommunications development activities; (ii) status of implementation of the STCF Work Plan; (iii) proposed regional technical assistance for GMS Telecommunications Sector Policy Study; (iv) telecommunications sector reform; (v) modalities for financing telecommunications projects; and (vi) information and communications technology and poverty reduction. The participants of the Meeting included delegations from the Kingdom of Cambodia, the People's Republic of China (the "PRC"), Lao People's Democratic Republic (the "Lao PDR"), Union of Myanmar, Kingdom of Thailand, and Socialist Republic of Viet Nam. Representatives from bilateral and multilateral agencies also attended. The list of participants is attached as Appendix 2. The Meeting was chaired by Mr. Sethaporn Cusripituck, Director General, PTD. Mr. Preben Nielsen, Deputy Director, Infrastructure, Energy, and Financial Sectors Department (West) ("IWD") of ADB co-chaired the Meeting. Opening SessionMr. Sethaporn Cusripituck, PTD, made introductory remarks about the STCF, and summarized the meetings that have been held so far. He mentioned that the STCF has established three loops, namely, East, West, and North Loops. Priority has been given to the East Loop comprising new links to connect existing facilities in Viet Nam, Lao PDR, Cambodia, and Thailand and for which ADB has provided technical assistance to conduct its feasibility study. The Fourth Meeting of the STCF revised the STCF Work Plan by regrouping the original loop-based projects into a two-phased project. He outlined the major objectives of the Meeting, namely: (i) to facilitate the implementation of the STCF Work Plan, and (ii) to discuss the relationship between poverty reduction and information and communications technology. He concluded by inviting Mr. Kraisorn Pornsutee, Deputy Permanent Secretary of the Ministry of Transport and Communications, Royal Thai Government to deliver the welcome and opening address. In his Welcome and Opening Remarks, Mr. Kraisorn Pornsutee, Deputy Permanent Secretary, Ministry of Transport and Communications, welcomed the participants. He noted the importance of the GMS countries' efforts to work together for the promotion of cooperation and prosperity in the subregion. He enjoined the participating countries to express their appreciation to ADB for its significant role in the GMS Program, particularly in extending financial support to priority subregional projects. Mr. Kraisorn wished the participants a pleasant stay in Bangkok, and looked forward to the success of the Meeting. He concluded by declaring the Meeting open. In his Opening Statement, Mr. Preben Nielsen, ADB, noted the progress made by the STCF as an advisory forum to develop and foster cooperation among all interested parties in the telecommunications sector in the GMS. He recalled the agreement by the Fourth Meeting of the STCF to adopt regulatory principles as a benchmark for reforms in the GMS countries. Mr. Nielsen highlighted the networking revolution that is taking place on a global scale, and the enormous impact of information and communications technology (the "ICT") on economic growth and poverty reduction. ICT enables an economy to reduce cost and increase market coverage, facilitating the achievement of economies of scale and scope. ICTs, therefore, provide an opportunity for developing countries to leapfrog toward an advanced stage of economic development. He emphasized the widening of the so-called "digital divide" between developed and developing countries. Significant barriers to the expansion of connectivity in many developing countries include policy failure, lack of competition in the telecommunications market, and lack of appropriate regulation. In this context, Mr. Nielsen reported that the GMS countries have agreed to conduct a telecommunications policy sector study, for which ADB technical assistance is being considered, as a prerequisite for the Phase I Backbone Telecommunications Project. If necessary, ADB will also consider providing a support program to the concerned governments to mitigate any fiscal burden that might result from the implementation of the telecommunications sector reform. This could include: (i) loss of fiscal revenue due to tariff restructuring or rebalancing; (ii) system adjustment cost, such as the cost of employee retrenchment, redeployment, or retraining; and/or (iii) transaction costs such as the cost for realignment of government agencies. He concluded by summarizing the proposed sequence of implementation of the Phase I telecommunications backbone project as follows: (i) conduct of a telecommunications policy sector study; (ii) provision of an ADB program loan to mitigate any fiscal burden on the part of the government arising from telecommunications sector reform; and (iii) implementation of the Phase I backbone project through an investment loan. It is envisaged that sector reforms will be implemented in parallel with the two proposed ADB loans. Mr. Toru Tatara, Head, GMS Unit, ADB, provided an overview of the GMS Economic Cooperation Program (the "GMS Program") and its medium-term strategic thrusts. He noted the objective of the GMS Program, which is to make the best use of the common resources of the Mekong countries and strengthen economic linkages among the six participating countries. The GMS Program was established with no intention of creating a trade block. Rather, it adopted a pragmatic and project-oriented approach, in contrast with other regional cooperation schemes. Mr. Tatara noted that the GMS Program is now in full-blown implementation stage, although the Asian economic and financial crisis substantially delayed the implementation of priority projects. Notwithstanding the crisis, he highlighted the significant rise in intraregional trade and investments. What has emerged is a common recognition among the GMS countries and policy makers that regional cooperation and integration would be an effective measure against external shocks in a globalized economy. He expressed the enthusiasm of the GMS governments to move faster with the implementation of priority GMS projects. Mr. Tatara outlined the four key medium-term strategic thrusts of the GMS Program endorsed by the six countries as follows: (i) adoption of a timetable for the opening of borders for the freer movement of goods and people throughout the GMS; (ii) expansion of high-priority transport corridors into economic corridors; (iii) more effective resolution of transborder environmental issues through the implementation of an Strategic Environment Framework for the GMS; and (iv) greater focus of the GMS Program toward achieving the poverty reduction objectives of the six countries. To meet the fourth strategic challenge, subregional projects must benefit not only those in the "mainstream", but also those in remote communities, such as ethnic minorities living in border areas of GMS countries. To operationalize the strategic thrusts, ADB has prepared a GMS Assistance Plan for 2001-2003 to deliver nine priority projects with a total cost of about $456 million, including the telecommunications backbone project. Mr. Tatara informed the Meeting that the telecommunications backbone project, together with assistance in undertaking sector policy and regulatory reforms, are considered as high-priority "flagship" initiatives of ADB's assistance to the GMS Program for 2001-2003. Country Presentations on Ongoing Telecommunications Development ActivitiesThe six country delegations presented their respective country reports that provided an update of recent developments in their respective telecommunications sectors. The following is a summary of recent developments in the telecommunications sector in Cambodia as presented by Ms. Mey Phoeung, Deputy Director, Planning and Finance Department, Ministry of Posts and Telecommunications (the "MPTC"): (i) there are about 161,400 telephones in Cambodia, of which 130,500 are mobile phones; (ii) there is one international GW/transit switch and four local switches; (iii) the satellite facilities provided by the UN operate in 21 cities, and a fiber optic network from the border with Thailand to the border with Viet Nam through Phnom Penh, constructed with grant aid from the Government of Germany, is now operational; (iv) local call service is provided by MPTC and five foreign companies with joint-venture contracts with MPTC; (v) in addition to MPTC, a second international carrier (RTI) is now operating international call services; (vi) domestic long-distance call services are being provided through satellite and microwave lines between Phnom Penh and 21 cities; (vii) cellular phone services are being provided by six joint-venture companies; (viii) Internet services are being provided by two joint venture companies, CamNet and Bigpond; (ix) plans for the next five years include rehabilitation and extension of customer telephone networks of Phnom Penh, and the construction of a F/O link from Phnom Penh to other cities; and (x) goals of MPTC are to provide network capacity and coverage equivalent to at least two lines per 100 people, fully cover Phnom Penh, Sihanoukville, and Siem Reap, and expand services to the urban cores of other provincial towns. The following is a summary of recent developments in the telecommunications sector in the PRC as presented by Mr. Wang Jianchao, Officer, Comprehensive Planning Department, Ministry of Information Industry: (i) the telecommunications industry of the PRC is one of the fastest-growing industries, with 46 million lines and 37 million users added annually during the period 1996-2000; (ii) teledensity nationwide has reached 20.1 percent, with 80 percent of administrative villages equipped with access to telephone services; (iii) the Internet sector has witnessed tremendous growth, with 265 thousand Chinese websites set up, 500 thousand web pages developed, and 22.5 million Internet users; (iv) since 1998, a series of strategic reforms have been gradually implemented including the separation of government regulation and business operation, separation of posts and telecommunications, and telecommunications reorganization and restructuring; (v) there is no longer a monopoly in the telecommunications industry, and competition and market mechanisms are taking place; (vi) legislation has been promulgated in the areas of telecommunications regulation, preserving Internet security and promoting internet information service; (vii) structural adjustment of telecom tariff has taken place, thereby significantly bringing down the overall tariff level; (viii) increased cooperation in the telecommunications sector is anticipated with the forthcoming accession of the PRC to the World Trade Organization (the "WTO"). The following is a summary of recent developments in the telecommunications sector in Lao PDR as presented by Mr. Padapphet Sayakhoth, Director General, Enterprise of Telecommunications Lao (the "ETL"): (i) ETL was reestablished in mid-2000 as a state-owned company to provide domestic and international telecommunications services in the country, serve as international gateway, and develop the north-south fiber-optic backbone network; (ii) total capacity is about 50,000 line units, of which 41,000 lines are used; (iii) two systems of public switching telephone network ("PSTN") are operated, namely FETEX150 and S12; (iv) capacity of mobile telephone GSM 900 now stands at 20,000 lines and there are over 14,000 users; (v) the 430 km section in Lao PDR of China-Southeast Asia terrestrial fiber optic link (part of C1 project) started domestic operations in March 2000 and international operations in February 2001; (vi) Internet services are being provided by over three companies and there are about 4,000 users; (vii) the goal for 2005 is to reach 270,000 telephone lines with a penetration rate of 4 percent; (viii) targets for 2001 include installation of new telephone exchanges with a capacity of 25,000 lines, installation of 40,000 additional mobile phone lines, extension of spur route 65 hubs for 5 provinces and a number of districts, establishment of fiber optic link from Vientiane to Pakse to replace existing microwave, and conduct of a feasibility study for a fiber optic link along Highway Route No. 9 (East-West Economic Corridor) across the planned international bridge across the Mekong River at Mukdahan-Savannakhet; and (ix) in line with the formulation of a regulatory framework assisted by KfW of Germany, the Ministry of Communications, Transport, Post, and Construction employed Pricewaterhouse Cooper to work on three stages, which are planned to be completed in April 2001. The following is a summary of recent developments in the telecommunications sector in Myanmar as presented by U Soe Myint Thein, Chief Engineer, Myanma Posts and Telecommunications: (i) as of January 2001, there are 551 telephone exchanges and 279,515 telephone lines, including PSTN, mobile telephones and wireless local loop; (ii) in terms of domestic long distance services, all the domestic earth stations and VSATs are linked with THAICOM3 using a quarter of a transponder; (iii) in terms of cellular mobile telephone system, the entire 7,000 lines are now fully subscribed; (iv) in terms of international communication, a standard A satellite earth station with international gateway switch is operating with 866 digital voice grade circuits as of August 2000, and can now be expanded up to 2,940 international trunks; (v) the portion in Myanmar of the SEA-ME-WE3 international fiber optic submarine cable project has been activated, with the cable landing station in Myanmar and gateway switch in Yangon linked with a terrestrial fiber optic transmission system; (vi) a GSM system has been contracted for 70,000 lines in Yangon and 30,000 lines in Mandalay, and will be commissioned soon; and (vii) the digitization of existing analog exchanges in four townships (Yangon, Mandalay, Taungoo, and Pyay) is ongoing for a total of 55,000 lines under contract with Shanghai Bell Co., Ltd. The following is a summary of recent developments in the telecommunications sector in Thailand as presented by Ms. Hataitip Chairojkanjana, Chief of International Cooperation Section, International Services Division, the Post and Telegraph Department: (i) the Act on Organization to Assign Radio Frequency and to Regulate Radio and Television Broadcasting as well as Telecommunications Activities was approved by the Parliament and came into effect on 8 March 2000; (ii) the Draft New Telecommunications Act is now under the Senate's consideration; (iii) the New Radiocommunications Act and New Broadcasting Act are under consideration by the Council of State; (iv) Cabinet approved on 26 September 2000 the transformation of the Telephone Organization of Thailand ("TOT") and the Communications Authority of Thailand (the "CAT") into four limited state-owned companies in line with the Master Plan for Telecommunications Development; (v) six information technology laws are being studied, namely, the Electronic Commerce Law, Digital Signature Law, Data Protection Law, Computer Crime/Computer-related Crime Law, Electronic Funds Transfer Law, and Universal Access Law; (vi) a new joint venture company, ACT Mobile Co., Ltd., with a registered capital of 1.2 billion baht, will operate and provide the new 1900 MHz mobile phone system; (vii) Thailand is participating in the Asian Internet Network, a grouping of eight telecommunications operators in Asia, whose purpose is to deliver direct Internet access around the region; (viii) the IP network of TOT is being expanded to 30 times of the current capacity with a total of 100,000 voice and data expanded ports; (ix) the TOT board has approved the new numbering plan that changes the current seven digits to eight, and will be in effect by July 2001; (x) public internet terminals that allows users to access the Internet are being installed by TOT and CAT; and (xi) the 2000 IT Master Plan, which will provide the guidelines for Thailand to develop information technology on its own, is expected to be integrated into the Ninth National Economic and Social Development Plan (2002-2006). In addition, a human resource development program to be offered by the Royal Thai Government (TOT) to the GMS countries is scheduled to be implemented from 20 May to 3 June 2001. The following is a summary of recent developments in the telecommunications sector in Viet Nam as presented by Mr. Lam Hoang Vinh, Director of the International Cooperation Department of the Viet Nam Posts and Telecommunications: (i) teledensity in Viet Nam reached 4 lines per 100 persons, with a total of 3.3 million lines across the country; (ii) by the end of 2000, there are almost 830 thousand new subscribers; (iii) to date, 85.5 percent of all communes in the country have telephone access; (iv) various new services were started to be offered including pre-paid mobile phone, international mobile phone roaming, Datapost, VNN1268 and VNN1269, and P&T-related services; (v) as of end-2000, total Internet subscribers reached almost 120 thousand; (vi) targets for 2001 include teledensity of 5 lines per 100 people, over 47 thousand Internet subscribers, and over 4 million telephone lines in the network; (vii) Vietnam Telecommunications was tasked to implement an active international cooperation policy and an opening-up policy that is appropriate for the country's conditions; (viii) the Government is expediting the development of the National Information Infrastructure that will ensure the availability, accessibility, and reliability to support the proliferation of e-commerce; and (ix) Viet Nam will participate actively in the integration of its national telecommunications network through the E-ASEAN framework agreement and the Mutual Recognition Agreement on telecommunications equipment. Status of Implementation of STCF Work PlanMr. Dong-Soo Pyo, Senior Financial Analyst, Transport and Communications Division, IWD, ADB, summarized the developments in subregional cooperation in the telecommunications sector, highlighting the major agreements reached from the Third GMS Ministerial Conference held in Hanoi in April 1994 up to the Ninth GMS Ministerial Conference held in Manila in January 1999 and the Steering Committee Meeting for the Study on the Establishment of the Backbone Telecommunications Project Phase I held in Bangkok in December 2000. He highlighted the decision by the Fourth Meeting of the STCF held in Vientiane in November 1999 to regroup the East Loop into a two-phased telecommunications backbone project. Phase I of the telecommunications backbone focuses on Cambodia, Lao PDR, and Viet Nam, while Phase II particularly focuses on Myanmar. In addition, nine studies were recommended covering institutional strengthening and implementation issues. The Fourth Meeting of the STCF also reaffirmed ADB's role, i.e., to foster telecommunications sector environments that are attractive to foreign investors, and to assist in mobilizing resources, including from the private sector. The agreements at the Fourth Meeting of the STCF were endorsed by the Ninth GMS Ministerial Meeting held in Manila in January 2000. Mr. Werner Gruebler, Mr. Gerd Johnen, and Mr. Ingo Peters, DETECON and ADB Consultants, presented the final report of the ADB-financed regional technical assistance for the Establishment of the Backbone Telecommunications Network Project - Phase I (the "Phase I backbone telecommunications RETA"). The draft final report of the RETA was discussed at the Steering Committee Meeting held in Bangkok on 18 December 2000. Comments received during the Meeting were incorporated by the ADB Consultants. The ADB consultants outlined the key findings of the study, which include: (i) since the completion of the feasibility study in mid-1999, all necessary minimum required facilities to establish GMS Phase I telecommunications backbone network ("Phase I backbone network") have been completed and are expected to be in place by the beginning of 2001; (ii) the only bottleneck in the whole loop is the limited capacity in Cambodia; (iii) implementation of the Phase I backbone network should be done in four stages, namely, present situation (Stage 1), optimization of the East Loop (Stage 2), upgrade of the Phase I backbone network to make it capable to carry anticipated traffic beyond 2004 (Stage 3), and developing four additional routes to improve the availability and quality of service and open the Phase I backbone network to Yunnan Province, PRC (Stage 4); (iv) a Telecommunication Network Management should be set up to ensure proper operation and maintenance of the Phase I backbone network; (v) technical assistance programs, namely, policy and tariff study, accounting and billing study, call event recording study, numbering study, telecommunications management networks study, synchronization study, and signalling no. 7 study need to conducted either prior or in parallel to the implementation of the Phase I backbone network; (vi) the Phase backbone network is financially viable with a cumulative earnings before interest, taxes, depreciation and amortization (EBITDA) ratio projected at 49 percent; (vii) the estimated cost of the project is $68.8 million, of which 31 percent, 43 percent, 4 percent, 14 percent, 6 percent, and 3 percent are accounted for by Cambodia, Lao PDR, Thailand, Viet Nam, Yunnan Province, PRC, and Myanmar, respectively; (viii) the internal rate of return per country is as follows: Cambodia - 14 percent, Lao PDR - 10.5 percent, Thailand - 19.8 percent, Viet Nam - 7.3 percent, and Yunnan Province - 9.8 percent; (ix) financing of the project is proposed to be secured through a loan from ADB to cover up to 80 percent of the foreign exchange costs, with the remaining financing gap to be possibly sourced from the private sector and/or equity to be provided by the concerned GMS countries; (x) it is strongly recommended that all GMS countries intensify their efforts to prepare an appropriate regulatory situation and that a sector policy be developed that supports full competition in the telecommunications market; (xi) the environmental impact of the project is minimal, with possible minor disturbances during the construction period; and (xii) the social impact of the project is generally positive, and the resulting telecommunications facilities would serve as a coordination instrument, thereby supporting the development of other parts of the economy. The following comments, views, and suggestions were made by the Meeting participants concerning the status of implementation of the STCF workplan and the final report of the Phase I telecommunications backbone RETA: (i) telecommunications sector policy reforms involve a long process, involving various policy aspects that each of the GMS countries must tackle; (ii) in undertaking policy sector reforms, there is a need to establish a telecommunications regulator that is independent, and a need for an efficient telecommunications operator; (iii) concern has been raised in the workings of the proposed telecommunications management network and steering committee, particularly on how decisions are to be reached; (iv) in response to item (iii), agreements made under the GMS Program framework are reached on the basis of a general consensus with the view to harmonizing as many components as possible while respecting national policies; (v) it is important for the GMS countries to determine the best way to manage an interconnected telecommunications network; (vi) some of the information contained in the final report as contained in the Feasibility Study prepared by Wiedleplan and SOFRECOM, both concerning technical data as well as policy and regulatory issues, are not consistent with information available in some of the GMS countries; (vii) the ADB consultants clarified that information has been classified as those obtained from the earlier feasibility study conducted on the East Loop and those provided by the GMS telecommunications agencies; (viii) the Meeting participants agreed to provide the ADB consultants the most recent information within two weeks, if possible, by e-mail; (ix) it was suggested to incorporate the benefits that accrue from the subregional projects in determining the allocation of investment costs; and (x) if requested, the ADB consultants would explain and clarify, on an individual basis, specific queries concerning the final report. The GMS delegations expressed their appreciation to the ADB consultants for their good work in preparing the study on the Phase I backbone telecommunications network. The ADB consultants thanked the telecommunications agencies in the participating GMS countries for the cooperation that the consultants have received in the course of their work. Proposed Regional Technical Assistance for GMS Telecommunications Sector Policy StudyMr. Dong-Soo Pyo, ADB, presented the project brief on a proposed regional technical assistance (RETA) for a GMS Telecommunications Sector Policy Study. The objective of the proposed RETA is to assist the Governments of Cambodia, Lao PDR, and Viet Nam to prepare a telecommunications sector policy, a telecommunications act, and a telecommunications sector reform program. The RETA involves five parts, namely: (i) Part I - preparation of a comprehensive telecommunications sector policy guideline; (ii) Part II - preparation of a comprehensive telecommunications sector legislative guidelines for the concerned countries to formulate principal legislation for implementing telecommunications sector policy; (iii) Part III - development of a country-specific telecommunications sector reform program; (iv) Part IV - preparation of an ADB support program for each participating country, if found necessary, to lessen the fiscal burden of the respective Governments that might result from the implementation of the telecommunications sector policy reforms; and (v) Part V - preparation of a short-term, medium-term, and long-term human resource development (HRD) plan to upgrade the technical, operational, managerial, and planning capacity in the respective telecommunications ministries, the regulatory authorities, and government telecommunications service operators in the concerned countries. The estimated cost of the RETA is $1.18 million, of which the equivalent of $1 million is proposed to be financed by ADB on a grant basis and the remaining amount to be financed by the concerned countries in kind for office space, secretarial services, counterpart staff, etc. It is proposed that ADB be the executing agency for the RETA. Each participating country will appoint an implementing agency to coordinate day-to-day implementation of the RETA. The RETA will be guided by a steering committee to be formed prior to the commencement of the work. The RETA will be carried out by consultants to be recruited by ADB in accordance with its Guidelines on the Use of Consultants and other arrangements satisfactory to ADB for the engagement of national consultants. Consulting services are expected to commence on 1 April 2001, and to be completed on 30 November 2001. Mr. Pyo stated that the discussions at the Meeting concerning the RETA would substitute for the fact-finding mission for the RETA to the participating countries, after which further processing by ADB of the RETA will be undertaken. Prior to the approval of the RETA, ADB will send by fax/e-mail the final TA Paper for vetting by the RETA countries within 14 days. A Letter of Agreement will subsequently be forwarded to the participating countries for signature by the concerned authorities. The Meeting made the following comments, suggestions, and views on the proposed RETA: (i) an independent regulator is considered desirable to ensure that government interference and political influence are minimized; (ii) there are several examples of telecommunications regimes in many parts of the world where the regulators remain dependent on the government, and yet the telecommunications systems are working well; (iii) in undertaking the policy reforms and legislative measures in the telecommunications sector, intensive and well-participated consultations should be conducted with all stakeholders; (iv) the RETA is envisaged to allow the participating countries, with the assistance of the consultants, prepare a preliminary draft of laws necessary to undertake telecommunications sector reforms; (v) the implementation period of the RETA, which is expected to range between six to eight months, is considered appropriate and should allow each participating country to decide on the model of policy and regulatory reforms to adopt; (vi) the RETA is limited to three countries partly due to resource constraints, but the same approach could be applied if and when the Phase II backbone telecommunications project is implemented; (vii) it is important to convene high-level workshops, seminars, and other related meetings concerning the proposed policy and regulatory reforms involving various stakeholders; and (viii) it was suggested that the membership of the steering committee to oversee the RETA implementation must comprise high-level officials from the participating countries in view of the sensitive nature of policy issues to be debated. The participating countries endorsed the further processing of the RETA by ADB for immediate implementation as scheduled. An Aide Memoire for the proposed RETA was circulated to the delegates from the RETA participating countries. Telecommunications Sector Reform: Case Studies - Experiences of the Kingdom of Thailand and the Republic of KoreaMr. Sethaporn Cusripituck, PTD, made a presentation on telecommunications sector reform - the case of Thailand. He outlined the following: (i) current situation in terms of government structure and telecommunications services; (ii) the relevant provisions of the National Constitution promulgated in October 1997 that call for an independent telecommunications regulatory body and promote fair and free competition; and (iii) the 12 main policy elements of the Master Plan for Telecommunications Development that include liberalization, increased private participation, and establishment of an independent regulatory body. In the area of liberalization, the major guidelines include: (i) undertaking a phased, step-by-step approach; (ii) prioritizing the liberalization of the domestic telecommunications sector; and (iii) liberalizing the sector according to WTO commitments by 2006. Corporatization of TOT will transform it into a TOT Company, Ltd., and CAT into CAT Telecommunications Company, Ltd., and CAT Postal Company, Ltd., all of which will remain as state-owned enterprises under a holding company fully owned by the Ministry of Finance. In the area of regulation, draft Acts have been passed establishing the National Broadcasting Commission and the National Telecommunications Commission (the "NTC"). These Acts have merged and took effect on 8 March 2000. The NTC, which is expected to be established by June 2001, will have 21 major duties and responsibilities, which include: (i) setting policy and formulating the Master Plan on Telecommunications; (ii) setting the criteria and categories of telecommunications services; (iii) permitting and regulating the use of spectrum for telecommunications; (iv) granting the license and regulating telecommunications services; and (v) protecting the consumers. Upon the establishment of the NTC, the PTD will be transformed to be a Secretariat Office of NTC. Mr. Chong Hoon Park, Research Fellow, Korea Information Society Development Institute, made a presentation entitled, "Governing the Telecommunications Liberalization: the Korean Experience". Mr. Park outlined the process of liberalization in the telecommunications market in the Republic of Korea, and discussed how the market environment has evolved since the country started its deregulation policy in the early 1990s. On the whole, the Republic of Korea has succeeded in enhancing the overall performance of the telecommunications market through the promotion of competition. As of June 2000, the telecommunications service industry was in a state of full-blown competition with 47 operators in 11 facilities-based service sectors, including two local service providers, 190 operators in three special service categories, and 2,492 operators in the value-added service sector. The telecommunications market in the Republic of Korea has expanded significantly, with an exponential increase in subscription and a popularization of every kind of telecommunications service. Liberalization has also resulted in lower and affordable service tariffs and a variety of choices, which have benefited the consumers. Also as a result of liberalization, operators have been able to increase production efficiency by cutting down costs and streamlining management, and improving distribution efficiency by introducing cost-based pricing. The lessons that can be drawn from the experience of the Republic of Korea in the liberalization of the telecommunications sector are as follows: (i) clear legislative objectives have to be put in place; (ii) there is a need for a strong and robust regulatory framework; (iii) there is a need for an empowered regulator that is provided with resources; (iv) a periodic fundamental review of the regulatory regime must be made; and (v) there are no universally-accepted answers in undertaking the liberalization of the telecommunications sector. Modalities for Financing Telecommunications Projects: Public-Private PartnershipsMr. M. Wietbrock, Senior Manager, Project Finance, Siemens Financial Asia, Ltd., made a presentation on public-private partnerships in financing telecommunications infrastructure projects. He discussed the criteria, rationale, key issues, and respective roles related to public-private partnerships. He illustrated four concepts on public-private partnerships in developing telecommunications systems, namely: (i) outsourcing (maintenance); (ii) financing and supply package; (iii) turnkey; and (iv) build-operate-transfer scheme. For most concepts, the construction and operating phases were described. The key conclusions of the presentation are as follows: (i) if properly structured, public-private partnerships offer attractive business opportunities for the private sector and increased value for money to the public; (ii) establishing a stable and transparent regulatory framework as well as an efficient institutional structure is paramount; (iii) public-private partnership is a long-term strategy rather than a quick fix solution to a funding problem; (iv) experience shows that significant research work needs to be undertaken by the public sector before tendering; (v) public-private partnerships are likely to grow due to the need for increased discipline in public sector borrowing and scope of infrastructure investment; and (vi) case by case approach may be necessary. Mr. Preben Nielsen, ADB and Co-Chairperson of the Meeting, informed the Meeting that ADB has started to provide partial risk guarantees aimed at mitigating country-related sovereign risks faced by commercial lenders in financing infrastructure projects in ADB's developing member countries. Through this mechanism, ADB hopes to further catalyze private sector investments. Mr. Nielsen further clarified the scope of assistance that ADB could provide in this area, which could be applicable to promoting private sector participation in the planned GMS Telecommunications Backbone Project. The scope involves: (i) assisting in creating an enabling environment, including ensuring competitive bidding process; (ii) assisting in the preparation of bid documents, bidding process, and guiding the negotiations between the government and the private sector in a neutral capacity; and (iii) serving as "public lender of last resort", thereby not "crowding out" the private sector. Information and Communication Technology and Poverty ReductionMr. Gabriel Accascina, Director, IT4DEV.ORG, made a presentation on the relationship between Information and Communications Technology and Poverty Reduction. He emphasized that a coordinated approach is needed to leverage Information Technology and the Internet to foster economic development and reduce poverty. A strategy for adopting such approach should include policy reforms, applications, technologies, and, most of all, capacity building. There are a number of steps that governments can take to fully participate in the new economy, i.e., the economy based on information. Mr. Accascina's presentation summarized a number of practical examples on the use of Information and Communication Technology for development, while recommending action in specific areas in terms of policies and strategies. These include: (i) full deregulation of the Internet sector; (ii) education and capacity building; (iii) deregulation aided by government intervention and IT policies; (iii) construction of efficient fiber optic backbone networks; and (iv) rural connectivity. The Government has an important role to play in promoting Information and Communications Technology for development through a variety of ways, including: (i) investing or promoting investments in the physical infrastructure of the electronic economy; (ii) equipping citizens with the means to access the global network; (iii) providing individual consumer and citizen access to information networks; and (iv) intervening directly to protect, guarantee, and regulate the digital exchange of money, goods, and services. It was pointed out the ICT should be closely linked to the proposed GMS Telecommunications Backbone Project. The Thai delegation expressed support to the recommendations made in the presentation, and cited Thailand's efforts to expanding the access to telecommunications and the Internet toward the rural areas as also done in the past. The Cambodian delegation inquired on whether planning for ICT and increasing access to the rural areas should be on the basis of demand or supply. It was clarified that both factors should be considered in a suitable combination. Statements from ObserversMr. Takahiro Kono, Programme Officer, Asia-Pacific Telecommunity (the "APT") introduced APT to the Meeting. He outlined the achievements of APT in 2000, highlighting the results of the Asia-Pacific Summit of the Information Society. He expressed APT's interest in the activities of the STCF. Mr. Kono concluded by thanking PTD and ADB for the successful organization of the Meeting. Other MattersResponding to an inquiry made by a member of the Vietnamese delegation, Mr. Sethaporn Cusripituck, Director General of PTD and Chairperson of the Meeting, made a clear and comprehensive description of the current status of the process of selection of the members of the National Telecommunications Commission of Thailand, and also provided deep insight in the legislative process involved. Mr. Sethaporn expressed his satisfaction over the progress made by the STCF in promoting subregional cooperation in the telecommunications sector among the six GMS countries. The Cambodian delegation inquired about the linkage between the development of the telecommunications sector and economic growth. Mr. Preben Nielsen, ADB and Co-Chairperson of the Meeting, responded that telecommunications should be seen as a contributing factor of economic growth, central to the development process and poverty reduction. An integrated approach to telecommunications development is considered important taking into account basic services, rural development, energy, roads, railways, urban development, etc. AcknowledgementsThe GMS countries and the ADB expressed their sincere thanks and appreciation to the Royal Thai Government, in particular, the Post and Telegraph Department of the Ministry of Transport and Communications, for the wonderful hospitality, excellent arrangements, and tremendous assistance provided to the Fifth Meeting of the Subregional Telecommunications Forum.
|
© 2008 Asian Development Bank Privacy | Terms of Use |
 Top of page |
Back