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About Telecommunication Infrastructure Fund

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What is an Infrastructure Fund?

An Infrastructure fund is established to raise capital from both individual investors and institutional investors in order to finance infrastructure projects across Thailand. Investment in infrastructure projects is not only essential for the wellbeing of Thai people but it also plays a crucial role in developing the nation’s economy. Naturally, infrastructure projects are huge in size and require a tremendous amount of capital in which the government is likely going to borrow thereby increasing the level of public debt. Thus the purpose of the infrastructure fund is to alleviate that burden. Moreover, the fund will also become an alternative source of financing for private sector involved in the national infrastructure projects.

Infrastructure fund is allowed to invest in 12 types of infrastructure projects as follows:

  1. Railway or Pipeline Transportation
  2. Electrical Grid
  3. Waterworks
  4. Road, Expressway, or Concession Way
  5. Airport or Airfield
  6. Deep Sea Port
  7. Telecommunications or Telecommunication-Related Infrastructure and Communications
  8. Alternative Energy
  9. Water Management/ Irrigation
  10. Natural-disaster prevention system including the alert and management systems to mitigate the intensity of such natural disaster
  11. Waste Management
  12. The infrastructure projects that mix with multi-infrastructures mentioned in 1. to 11., with the complete characteristics as follows:
    • Connecting, supporting, or having advantage together or towards the individual communities or vicinities
    • Generating or prone to generate the revenues no less than 80% of the total revenues from the total projects mixed

Benefit to the country

Benefit to the public
1. The infrastructure fund lessens burden of government agencies or state-owned enterprise to build and develop basic infrastructure which could take longer years. 1. Able to access to better telecommunication infrastructure
2. It lessens the government’s burden for budget allocation as most infrastructure projects are astronomical in value and thereby reduces the country’s public debt. 2. The infrastructure fund increases interesting investment alternative to investors.
3. Investment redundancy is avoided since telecommunication infrastructure assets could be shared by multiple service providers under a co-location basis. 3. Unitholder will benefit from investment returns as, being a natural person, investor will get tax exemption from dividend for 10 years from the tax year when the fund is established subject to rules and conditions stated by the Revenue Department.

What is Telecommunication
Infrastructure Fund?

The Telecommunication Infrastructure Fund refers to a type of infrastructure fund set up to principally invest in telecommunication infrastructure assets. The Telecommunication Fund can invest in two major assets as follows:

  1. 1

    Passive assets, namely telecommunication towers and fiber optic cable

  2. 2

    Active assets, namely transmission equipment and receiver equipment installed on telecommunications tower

The infrastructure assets are very crucial for the use of telecommunication devices such as mobile phone and tablet as they have been built to accommodate their use; i.e. to receive and transmit mobile phone signals in voice or data format through mobile phone and tablet. At present, telecommunication operators who are major mobile phone service providers in Thailand have built up their own telecommunication networks ranging from cable to fiber optic cable, antenna systems and other facilities although they can share the infrastructure since a tower can accommodate up to 4-8 telecommunication service providers. As such, the telecommunication infrastructure fund, when established, can be a means for telecommunication integration and sharing to maximize the existing assets. New telecommunication providers can develop their network and offer customers their service without having to own tower or network equipment. This will not only reduce investment redundancy but also mitigate environmental impacts. Unitholders in the telecommunication infrastructure fund will enjoy a return in a form of rental incomes as the infrastructure assets are leased to the telecommunication business or other forms of benefits as permitted by the laws on securities.

Infrastructure Sharing

Infrastructure Sharing is when telecommunication infrastructure whether it’s telecommunication tower, antenna system, transmission, site and other facilities such as generator and air-conditioning systems are shared among service providers.

Why sharing the infrastructure?

  • Telecommunication infrastructure is crucial for communication system but it takes time build and complete and the operation is also complicated.
  • At present, several operators invest in their own infrastructure. Having a new operator invest in an already-existing infrastructure is not only redundant but also wasteful. This could also widen competitive disadvantage of newcomer vis-à-vis veteran, making new operators more struggling to penetrate into the market.

Benefits from telecommunication infrastructure sharing

  • Reducing investment redundancy
  • Enhancing competition efficiency
  • Lowering market-entry barrier for newcomers
  • New service providers able to visualize more business opportunity
  • Service providers re-directing money left from investment to improve their network efficiency

Samples of the infrastructure sharing around the world

Spain and the UK

  • In Europe, infrastructure integration and sharing has been constantly promoted. Besides, as most operators have to pay a hefty sum for their 3G licenses, they plan beforehand to share the telecommunication infrastructure in their 3G service provision.
  • For example, an agreement between Orange and Vodafone in Spain and the United Kingdom helps reducing cost by as much as 30 per cent in the UK and cut down the number of base stations by 40 per cent in Spain with comprehensive coverage all over the countries.

Canada

  • The Canadian Government stated in its 2 GHz band range auction policy framework that the spectrum would be reserved for new operators and that infrastructure which included antenna, telecommunication towers and infrastructure sites must be shared. Besides, roaming service will be available to newcomers.

Malaysia

  • The Malaysian Communications and Multimedia Commission (MCMC) sets the sharing of infrastructure as criteria for granting a license for the 3G wireless auction.
  • Operators must prove that they are capable to participate in the sharing of both physical infrastructure such as tower or base station to network capacity.

*Source: The National Broadcasting and Telecommunications Commission (NBTC)