NBTC Notification on “Foreign Domination” of Telecom Businesses

The acting National Broadcasting and Telecommunications Commission (NBTC) issued a notification restricting “foreign domination” over telecommunications businesses.  This notification was published in the Thai Government Gazette on 30 August 2011 and became effective the following day, 31 August.   The notification applies to all current holders of and applications for Type-2 (with network) and Type-3 licenses, meaning that it applies to companies that currently operate a business based on a permission, concession or contract with CAT or TOT. The notification lists the following ten examples of what the NBTC claims is “foreign domination” of a telecommunications business:

  1. direct or indirect share holding by foreigners or foreigners’ agents;
  2. use of apparent agents (nominees);
  3. holding of shares with special voting rights;
  4. participating in appointing or having control over the board of directors or senior officers of the licensee;
  5. a financial relationship such as having a corporate guarantee or a loan with a lower-than-market interest rate;
  6. licensing or franchising;
  7. management or procurement contracts;
  8. joint investments (by a licensee and foreigners);
  9. transactions involving transfer pricing; and
  10. any other behavior which provides direct or indirect control to a foreigner over a licensee.

For information on the NBTC, please click here.