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Regulating the Internet: Lessons from Thailand Somkiat Tangkitvanich Thailand Development Research Institute (TDRI)

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Presentation on theme: "Regulating the Internet: Lessons from Thailand Somkiat Tangkitvanich Thailand Development Research Institute (TDRI)"— Presentation transcript:

1 Regulating the Internet: Lessons from Thailand Somkiat Tangkitvanich Thailand Development Research Institute (TDRI)

2 Outline zStatus of Internet in Thailand zImpacts of the state monopoly on price and Internet adoption zImpacts of the states share-ownership on price and corporate governance of ISPs Future prospects

3 The Status of Internet in Thailand z18 commercial ISPs + 4 non-commercial providers + two public interchanges z2.5 billion Bt of ISPs revenue in year 2000 zOver 600 Mbps international bandwidth About 3.54 million Internet users (as of Q1 2001)

4 CAT 18 ISP House hold Corpor ate Internet Structure of the Internet Markets

5 Listed Prices of 64 Kbps Leased Line $ US/month Source: TDRI

6 0.57 1.13 1.71 2.70 4.05 2 Mbps 4 Mbps 8 Mbps 16 Mbps 45 Mbps Prices of International Half Circuits 0.71 1.29 2.22 3.94 7.16 CATMCI Million Bt/Month

7 Monopoly and its Impact on Net Use z# Host = 772.6 GDP - 557.2 M x GDP - 41,201 (1) z# SSL Server = 4.25 GDP - 4.0 M x GDP - 49.9 (2)

8 Identify the IP Address Locate the IP Address Tracert Whois Identify and Locate the IP Address Neotrace Two Ways to Locate a Server

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10 Location of Thai Web Portals Source: TDRI

11 Consumer Benefit Quantity Price Qc Pc Qm = 555 Mbps Pm=1.43 Pc Producers Profit Welfare Losses = 230 million Bt per year Welfare Losses

12 Impacts of CATs share ownership zISPs are required to give 1/3 of its share to CAT in return for a concession to operate A CAT representative acts as the chairman of the ISP and has a veto rights against any business plan

13 The Cost of CATs Share Ownership Let X be an ISPs expected rate of return yP/P = (2+3X)/(2+2X) 20% price mark-ups for X = 30%

14 CAT Holding Company Major Shareholder 1 Major Shareholder 2 ISP Subsidiary 1 Subsidiary 2 Subsidiary 3 32+3%65% 100% Shareholding Structures of ISPs

15 Revenues and Profits of ISPs Million Bt


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