Fifth Meeting of the Subregional Telecommunications Forum (STCF-5)

21-22 February 2001

Bangkok, Thailand
Introduction
The 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 Session
Mr. 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 loopbased 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 Activities
The 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 longdistance 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 Plan
Mr. 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
Study
Mr. 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/email 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 Korea
Mr. 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 Partnerships
Mr. 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 publicprivate 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

10

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 Reduction
Mr. 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 Observers
Mr. 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.

11

Other Matters
Responding 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 CoChairperson 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.
Acknowledgements
The 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.

12
Appendix 1

Program and Agenda

Chairperson of the Meeting
Mr. Sethaporn Cusripituck Director General The Post and Telegraph Department Ministry
of Transport and Communications Kingdom of Thailand
Co-Chairperson of the Meeting
Mr. Preben Nielsen Deputy Director Infrastructure, Energy, and Financial Sectors
Department (West) Asian Development Bank
Day 1: 21 February 2001, Wednesday
0830-0900

Registration

0900-0940

Session I: Opening
Chairperson's Introduction
Mr. Sethaporn Cusripituck Director General The Post and Telegraph
Department Ministry of Transport and Communications Kingdom of
Thailand
Welcome and Opening Remarks
Mr. Kraisorn Pornsutee Deputy Permanent Secretary Ministry of Transport
and Communications Kingdom of Thailand
Opening Statement
Mr. Preben Nielsen Deputy Director Infrastructure, Energy, and Financial
Sectors Department (West) Asian Development Bank
GMS Assistance Program Overview and Strategy
Mr. Toru Tatara Head, GMS Unit Programs Department (West), Division
III Asian Development Bank

0940-1010

Coffee Break

1010-1100

Session II: Country Presentation on Ongoing Telecommunications

Development Activities

Kingdom of Cambodia
People's Republic of China
Lao People's Democratic Republic
Union of Myanmar
Kingdom of Thailand
Socialist Republic of Viet Nam


1100-1300

13
Session III: Status of Implementation of STCF Workplan
Presentation:
Mr.
Dong-Soo
Pyo Senior
Financial
Analyst Transport
and
Communications Department Infrastructure, Energy, and Financial Sectors
Department (West) Asian Development Bank
Presentation on the Summary of the Results of the Feasibility Study of
GMS Telecommunications Backbone Project - Phase I
Detecon Consultants Discussion

1300-1400

Working Lunch

1400-1500

Session III: Continuation

1500-1530

Coffee Break

1530-1630

Session IV: Proposed Regional Technical Assistance for GMS

Telecommunications Sector Policy Study
Presentations: Mr. Sethaporn Cusripituck Director General The Post and
Telegraph Department Ministry of Transport and
Communications Kingdom of Thailand
Dr. Chong Hoon Park Korea Information Society Development Institute
Discussion
Dinner to be hosted by the Post and Telegraph Department

Day 2: 22 February 2001, Thursday

0900-1000

Session VI: Modalities for Financing Telecommunications Projects:

Public-Private Partnerships
Presentations: Mr. M. Wietbrock Senior Manager,
Siements Financial Asia Ltd.

Project Finance,

Discussion
1000-1100

Session VII: Information and Communication Technology and

Poverty Reduction
Presentations: Mr. Gabriel Accascina Director, IT4dev.org
Discussion

1100-1130

Coffee Break

14

1130-1230

Session VIII: Statements from Observers

1230-1400

Working Lunch

1400-1500

Session IX:
Proceedings

1500-1530

Session X: Closing

Discussion

and

Closing Statements:
The Post and Telegraph Department
Asian Development Bank

Adoption

of

the

Summary

of

15
Appendix 2

List of Participants
GMS Countries
Cambodia
Mr. Vongsey Vissoth, Deputy Secretary General, Ministry of Economy and Finance
Ms. Mey Phoeung, Deputy Director of Planning and Financial Department Ministry of Posts
and Telecommunications
Mr. Duong Sophorn, Chief Office, Department of International Relations Ministry of Planning
People's Republic of China
Mr. Wang Jianchao, Officer, Comprehensive Planning Department, Ministry of Information
Industry
Mr. Ma Shan, Engineer, General Policies Division, Strategy and Policy Department, China
Telecom Group Corporation
Mr. Xu Jiang Hong, Vice Director, China Telecommunications Group, Yunnan Provincial
Telecom Corporation
Lao People's Democratic Republic
Mr. Padapphet Sayakhot, Director General, Enterprise of Telecommunications Lao, MCTPC
Mr. Chaleun Sibounheuang, Deputy Head of Telecom Division, Department Post and
Telecommunications, Ministry of Communication Transport Post and Construction
Dr. Sonephet Inthavong, Deputy Director General, Foreign Investment Management Cabinet,
Prime Ministers Office
Mr. Meckham Silykhoune, Deputy Chief of International Financial Institutions and ODA
Division, Department Economic Affairs
Myanmar
U Soe Myint Thein, Chief Engineer, Long Distance Communications, Myanmar Posts &
Telecommunications
Daw Than Than Htoo, Assistant Director, Foreign Economic Relations Department, Ministry
of National Planning & Economic Development
Thailand
Mr. Sethaporn Cusripituck, Director General, Post and Telegraph Department
Ms. Panuporn Patarachoke, Acting International Affairs Expert, International Services
Division, Post and Telegraph Department
Mr. Aran Permpiboon, Senior Executive Vice President, Telephone Organization of Thailand
Mr. Noppanat Hutacharoen, Vice President of International Telecommunications Department,
Telephone Organization of Thailand
Ms. Hataitip Chairojkanjana, Chief of International Cooperation Section, International Services
Division, Post and Telegraph Department
Mr. Chairat Tongjub, Communications Engineer, Post and Telegraph Department
Mr. Arkom Suwanraksa, Communications Engineer, Post and Telegraph Department
Mr. Yongyuth Manochanyakorn, Chief of Specialized Organization Sub-division, International
Affairs Division, Ministry of Transport and Communications
Mr. Charoon Thongma, Director, Telecommunications Planning Department, The

16

Communications Authority of Thailand

Mr. Anucha Weeranitiwechasarn, Senior Manager, Telecom Planning Department, The
Communications Authority of Thailand
Mrs. Duangjai Thammachotigo, Director of International Telecommunications Relations
Division
Ms. Srisunan Hoonsuwan, Director of International Relations Division, Telephone
Organization of Thailand
Ms. Jitsukon Paisanautphong, First Secretary, Ministry of Foreign Affairs
Mrs. Somchit Chularat, Director, The Telecommunications Association of Thailand
Ms. Chollada Svetanandana, Policy and Plan Analyst, Regional Economic Development
Cooperation Committee Office
Viet Nam
Mr. Lam Hoang Vinh, Director of the International Cooperation, Department of the Viet Nam
Posts and Telecommunication Cooperation
Ms. Truong Thi Dac, Senior Expert of the Office of Government
Mr. Hoang Viet Khang, GMS Senior Expert, Foreign Economic Relations Department,
Ministry of Planning and Investment
Ms. Tran Thanh Ha, Manager, International Organizations, Science-Technology and
International Cooperation Department, Department General of Posts and
Telecommunications of S.R. Viet Nam
Observer
Mr. Makoto Kotera, Bangkok Representative Office, Japan Bank for International Cooperation
Mr. Santiago Elorza, Economic and Commercial Counsellor, Head of the Commercial Office
of Spain, Embassy of the Kingdom of Spain
Mr. Diego Fernandez Gabaldon, Embassy of the Kingdom of Spain
Mr. Krissanet Sripraset, Embassy of Switzerland
Mr. Takahiro Kono, Programme Officer, Asia-Pacific Telecommunity
Mr. Robledo Salvador, Technical Assistant, Asia-Pacific Telecommunity
Mr. William J. Withers, Senior Expert, Sector Reform and Finance International
Telecommunication Union, Regional Office Bangkok, Thailand
ADB
Mr. Preben Nielsen, Deputy Director, Infrastructure, Energy and Financial Sectors
Department (West)
Mr. Toru Tatara, Head, GMS Unit, Programs Department (West), Division III
Mr. Dong Soo Pyo, Financial Analyst, Infrastructure, Energy and Financial Sectors
Department, Transport and Communications Division West, (IWTC)
Ms. Lucja Cannon, Private Sector Specialist, Infrastructure, Energy and Financial Sectors
Department (West)
Consultant/Resource Persons
Mr. Chong Hoon Park, Korea Information Society Development Institute
Dr. Jingjai Hanchanlash, Director Thai Chamber of Commerce
Mr. Gerd W. Engelhardt, Executive Director, Regional Office Southeast Asia, DETECON
GmbH
Mr. Werner Gruebler, Senior Telecommunications Expert, DETECON GmbH
Mr. Gerd Johnen, Senior Consultant Business Development, DETECON GmbH
Mr. Ingo Peters, Senior Expert, DETECON GmbH
Mr. Cherdchai Chantrasuriyarat, Senior Manager, EDP, DETECON

17

Mr. Matthias Wietbrock, Siemens, Senior Manager, Project Finance, Siemens Finance Asia
Ltd.
Mr. Canh Quach, Siemens, Director, Liason Office to Asian Development Bank
Mr. Gabriel Accasina, Director, IT4DEV.org
Mr. Ronald Antonio Butiong, Consultant, GMS Unit, Programs Department (West)
Secretariat
Ms. Yvonne Razote, Consultant, GMS Unit, Programs Department (West)
Mrs. Intira Boonpayong, Post and Telegraph Department, Thailand
Ms. Somchit Sassanarukkit, Post and Telegraph Department, Thailand
Ms. Watcharee Pomsuk, Post and Telegraph Department, Thailand
Ms. Darat Assawasantad, Post and Telegraph Department, Thailand
Ms. Poonsin Nontakhan, Post and Telegraph Department, Thailand
Ms. Achara Kongsakul, Post and Telegraph Department, Thailand