Thailand's satellite-related economy is expected to reach an important milestone next year with two major developments -- the auction of rights to use satellite orbital slots, scheduled for Jan 8, and a push by the telecom regulator to amend the rules governing landing rights licences for foreign satellite operators, paving the way for low-Earth orbit (LEO) satellite business in the country.
The amendment aims to find a balance between regulation and the commercial satellite business to deliver optimum benefit for the country's space economy.
"2023 is the year when we address existing challenges to ensure a smooth transition in the satellite business landscape and bring benefits to the country," said Air Marshal Thanapant Raicharoen, a commissioner of the National Broadcasting and Telecommunications Commission (NBTC).
ORBITAL SLOT AUCTION
The auction offers five slot packages, covering 50.5° East and 51° E; 78.5° E; 119.5° E and 120° E; 126° E; and 142° E. The licences for orbital slot usage run for 20 years.
A total of six companies had picked up bid documents for the auction when the process wrapped up on Nov 30.
They comprise National Telecom (NT), mu Space and Advanced Technology, Prompt Technical Services, Space Tech Innovation, Ascend Capital and The Win Telecom.
Ascend Capital is a subsidiary of conglomerate Charoen Pokphand (CP) Group, while Space Tech Innovation is a subsidiary of SET-listed satellite service provider Thaicom.
Interested firms are scheduled to submit their bid documents on Dec 27 with a fee payment of 500,000 baht. The list of qualified bidders is scheduled to be announced on Jan 4, with a mock auction taking place on Jan 7.
If there is only one bidder in the auction, the regulator will extend the application period by 14 days beyond the announcement date of the list of qualified bidders. The auction would be postponed until Jan 29.
The upcoming auction is the second attempt by the NBTC after the first effort was scrapped last year when TC Space Connect, a subsidiary of Thaicom, was the sole bidder.
At that time, TC Space Connect and mu Space picked up bid documents, but only the former submitted the bid request by the deadline.
The NBTC decided to extend the timeline for the auction to provide more time for interested bidders to submit their bids. NT picked up a bid document, but did not submit a bid request.
AM Thanapant insisted the conditions for the upcoming auction are more practical for bidders than was the case for last year's failed effort.
SATELLITE CAPACITY RESERVATION
The winning bidders in the upcoming satellite orbital slot auction are obliged to reserve one transponder per broadcast satellite, or 400 megabits per second capacity per broadband satellite, for state use and public services without charge.
The condition differs from the previous satellite concession regime, in which the concessionaire was required to allot one transponder per concession, regardless of how many satellites it operated, and received a rental fee payment from the state for the capacity.
AM Thanapant said the requirement will support collaboration between state agencies and private satellite service operators, while helping authorities prepare their own satellite management in the future.
The bid conditions state if government agencies want to use more satellite capacity than stipulated in the conditions, particularly for the 119.5° E slot, they must not participate in the auction, he said. State agencies can negotiate with the winning bidders for such usage, said AM Thanapant.
The winning bidders must allow the assigned state agencies to participate in the construction of a satellite gateway control centre to allow the agencies to manage the allotted capacity for the state's tasks, as well as train their personnel for future tasks.
He said the 119.5° E slot is expected to be the most desirable among bidders, followed by 78.5° E.
The NBTC hopes the upcoming auction will be successful after it was scrapped last year, said AM Thanapant. He indicated there are positive signs for the auction on this occasion.
First, the number of interested companies that picked up bid documents was higher than for last year's auction. In addition, the National Space Policy Commission, chaired by Deputy Prime Minister Prawit Wongsuwon, recently passed a resolution to assign NT to participate in the auction as part of the national satellite development policy.
"At least two companies are likely to submit bid documents on the submission date," AM Thanapant said.
SLOTS AT RISK
He said some orbital slots granted for Thailand's use are at risk of being cancelled if the country fails to coordinate with the International Telecommunication Union, a specialised UN agency for information and communication technologies, and other countries that hold the rights for adjacent slots within a seven-year deadline that is set to expire next year.
Some slots held by Thailand do not have any satellites in orbit.
"Although some slots may fall short of attracting commercial satellite business, the loss of orbital slots would make it more difficult for the NBTC to make a new filing in the future as we would have to queue up for a long time," AM Thanapant said.
Lining up in the queue would mean Thailand would lose priority in securing the slots, he said.
The first satellite orbital slot package of 50.5° E and 51° E has the greatest risk of being cancelled, followed by the fourth (126° E) and fifth (142° E).
Thaicom 6 satellite is now in the 78.5° E slot in the second package, while Thaicom 4 is in the 119.5° E slot in the third package.
Ownership of the two satellites was transferred to the Digital Economy and Society (DES) Ministry after Thaicom's 30-year satellite operating concession expired on Sept 10 last year.
THAICOM RESTRUCTURING
Just before the latest round of the auction was about to begin, Gulf Energy Development Plc, Thailand's biggest private power producer by market value, announced its plan to acquire Thaicom.
Gulf said it will buy a 41.1% stake in Thaicom for 4.4 billion baht from InTouch Holdings Plc. Gulf owns 46% of InTouch.
InTouch and Gulf expect the deal to be completed by March next year.
Gulf also indicated it will propose a tender offer to acquire the remaining shares of Thaicom from other shareholders.
An industry source who requested anonymity said the planned acquisition of Thaicom by Gulf may be driven by business and political reasons.
In August 2021, Gulf completed its 25-day tender offer for a stake in InTouch, becoming the largest shareholder in the tech and telecom-oriented holding firm, whose major shareholdings were earlier controlled by foreign entities.
Before Gulf pursued the tender offer for a stake in InTouch last year, DES Minister Chaiwut Thanakhamanusorn revealed that the ministry would hold talks with InTouch and Thaicom regarding the proportion of the latter's shareholding held by foreign companies.
When the satellite concession contract was awarded by the government in 1991, Shin Corporation, the former name of InTouch, agreed to set up a new firm to run the service, with Shin holding a stake of at least 51%.
The new company was named Shinawatra Satellite, which later changed its name to Thaicom.
In 2003, under the government of former prime minister Thaksin Shinawatra, Thaicom asked the Information and Communication Technology Ministry -- the former name of the DES Ministry -- to adjust the concession by letting InTouch reduce its stake in Thaicom to 40%, from at least 51%, as it wanted more partners. This proposal was later approved.
While the National Anti-Corruption Commission later ruled against the approval, InTouch's stake in Thaicom never returned to the 51% as stipulated in the contract.
Mr Chaiwut previously said as InTouch's share proportion in Thaicom should be at least 51%, and with Singapore's Singtel holding a 21% stake in InTouch, efforts must be made to ensure the proportion of a foreign entity's shareholdings in Thaicom were not greater than those held by Thai entities.
The buyout of Thaicom by a Thai entity meets the government's concerns about national security for digital networks and satellite businesses, the source said.
The new structure of Thaicom should pacify those who are concerned about Thaicom becoming the winning bidder in the auction, according to the source.
LEO SATELLITE BUSINESS
AM Thanapant said the NBTC is looking at amendments for some conditions in the regulation that governs landing rights licences for foreign satellites, which could open the door for LEO satellite business in the country.
The move could support new business opportunities in the space economy, he said.
LEO satellites operate 500-2,000 kilometres from Earth's surface, while traditional communication satellites, also known as geostationary satellites, are located higher up at around 36,000km. The lower orbit means lower latency in signal transmission.
LEO satellites have the potential to rival or possibly exceed the fastest ground-based networks because of the rapid travel of communication signals in space.
LEO satellite services are operated by several foreign firms, such as US billionaire Elon Musk's SpaceX and the London-based OneWeb.
LEO satellite services, which aim to provide high-end internet coverage to clients such as governments, mining companies and shipping conglomerates as well as remote areas of a country, are only in the early stages and there is not yet a clear business model from a commercial perspective.
Earlier this year Thaicom clinched a partnership deal with Globalstar, a global LEO satellite operator, to establish and operate ground facilities in Thailand for the American firm.
Thaicom said it is also in talks with another three global LEO satellite providers that have strengths in different service categories.
Thaicom applied to the NBTC office for satellite landing rights licences for foreign satellites.
Under an NBTC rule, landing rights licences for foreign satellites include a fee of 7% of total revenue, compared with landing rights licences for Thai satellites, which have a fee of only 4%.
Some foreign operators do not want to form a joint venture with a local business to provide such services here, said AM Thanapant.
Generally, a Thai limited company can have a foreign business ownership maximum of 49%.
"The challenge is to find a balance between the benefits of LEO players and Thai businesses in both the satellite sector and related business fields," he said.
"With borderless business in the internet era, a supportive ecosystem for LEO business in the country is needed."
