|ICT Update | December 19, 2018
Authors: Ella Duangkaew and Monica Chritton
December 20, 2018: Business Roundtable with Indonesia DG of Informatics Application, Semuel Abrijani Pangerapan (Sammy) on GR 82 Draft Revision. Click here to register for sponsorship, and click here to register to attend this event.
January 23, 2019: ICT Committee Quarterly Call: During the call we will review the 2019 Work Plan and discuss the Committee's priorities and upcoming opportunities for the year. If you have any questions, would like to suggest an item to be discussed on the call, or have any input for the 2019 Work Plan, please contact Ella Duangkaew at firstname.lastname@example.org. Click here to register for the call.
|THE COUNCIL'S TAKE|
Indonesia Issues Fundamental Technical Plan for National Telecommunications
Indonesia’s Ministry of Communications and Informatics (KOMINFO) has issued Regulation Number 14 of 2018 (Regulation 14/2018), which outlines a plan for network development planning for all telecommunications organizers. The regulation has provisions relating to 11 areas:
The regulation is intended to achieve the Ministry’s objectives for connectivity and coverage within a market with four major players and high competition. According to the Indonesia Law Briefing (ILB), the regulation requires new players to find their own number allocations and accommodate existing services in the market. All providers must ensure interconnectivity between mobile cellular and satellite networks, fixed-line long-distance and international networks and circuit-switched-based local networks, confirmed by partnership agreements with details also laid out in the Regulation. Providers are required to allocate central gates to achieve certain functions and plan for two types of physical connectivity: Type 1 for the purpose of seamless national connections and Type 2 for the purpose of improving efficiency. The regulation also sets forth criteria for how service fees must be formulated, and defines two types of charging plans: Periodic Pulse Multi-Metering (PPM) and Automatic Message Accounting (AMA).
Indonesia’s connectivity is critical to its economic growth, particularly as an island nation, and the competitive market warrants a roadmap, especially for potential new entrants. This is the intention of Regulation 14/2018, which has been in enforcement since October 2018. Increasing levels of smartphone and Internet penetration will be important for achieving continued e-commerce growth, which has been projected to reach up to US$ 55-65 billion by 2020, according to McKinsey. Connectivity infrastructure must continue to develop despite the challenges Indonesia’s geography presents in developing fixed broadband infrastructure. These efforts to improve connectivity in Regulation 14/2018 follow a statement in 2017 by KOMINFO Minister Rudiantara, where he set a goal of having broadband access in all capitals of districts and regencies by 2019.
After Contract Dispute Before House Panel, Philippines Third Telco Moves Forward
The Philippines House Committee on Legal Franchises approved the sale of the controlling interest of Mislatel to the consortium set to become the Philippines third telco player following a suspension of the sale due to a contract dispute. The consortium is composed of Mislatel, Dennis Uy’s Udenna Corporation and Chelsea Logistics Holding Company and China Telecom.
The contract dispute was brought forward by DigiPhil, which was disqualified from the bidding process. The winning consortium gained its qualification to bid for the third telco slot through Mislatel’s congressional franchise. DigiPhil is part of Sear Telecom, a Chavit Singon-TierOne Communications consortium, and Sear Telecom argued that it had an exclusive contract with Mislatel, according to Rappler. This exclusive contract would mean that Mislatel would not be able to sell and transfer its controlling interest to become a part of the consortium of China Telecom, Udenna Corporation and Chelsea Logistics. According to PhilStar, the House Committee approved the sale of Mislatel’s controlling interest because the DigiPhil is not within the Committee’s jurisdiction. Next, Mislatel will undergo a 90-day post-evaluation before 3G, 4G and potential 5G frequencies will be granted.
Bringing in a third telco player is intended to improve and lower the cost of telecommunications services in the Philippines, which currently has some of the highest priced rates in the world. Mislatel, after winning the bid, proposed to increase the average internet speed and increase coverage to 84% of the population in five years. For more information on the announcement of the third telco player, see our previous Analytical Update here.
Thailand’s New Revenue Code Amendment to Require E-Payments Disclosures
The National Legislative Assembly (NLA) has passed a Revenue Code Amendment aimed at reducing fraud, investigating tax obligations and effectively capturing tax from e-commerce businesses. The new tax policy will take effect January 1, 2020, according to the Bangkok Post. Under the new amendment, any financial institution must disclose information to the Revenue Department for customer accounts with over 3000 deposits and money transfers annually of any annual amount, or accounts with more than 400 deposits and money transfers totaling over 2 million THB (roughly US$61,087) annually.
The Revenue Department has developed the amendment to better capture taxes on e-payments, as it previously lacked the necessary information to do so. The Revenue Department currently reports data showing that only 65% of juristic enterprises file tax returns, and that a large number of self-employed individuals do not pay taxes. Deputy Minister of Finance Wisudhi Sripuphan said the Revenue Code amendment is intended to create more sustainable tax collection, and is not solely intended to target online traders. The Deputy Minister also noted that 2.4 million people are not in the tax system.
E-payments organizations in Thailand have expressed concern that the new tax policy could prevent widespread adoption of e-commerce payments and discourage the beneficial transition towards a more cashless society. Merchants who previously only needed to report a summary will now be required to disclose more detailed information to the Revenue Department, which will introduce additional burden. Thus, to avoid this disclosure burden, smaller merchants may prefer to use cash instead of e-payments. This reporting burden also drew comments from within the NLA, with some members stating that their own accounts would require reporting of transactions from meeting allowances and donations to Buddhist temples.
Although the Revenue Code amendment is intended to ensure fair competition and create more convenient and effective tax collection, its effect on e-commerce and e-payments may affect Thailand’s vision to become a cashless society. Thailand has emphasized the benefits of e-payments and has prioritized its goal of becoming a cashless society in its National e-Payments Master Plan and through its PromptPay e-payments system established through public-private partnership. PromptPay services began in 2017 and the service currently has 42.6 million registrants. According to the Bangkok Post, the Bank of Thailand reported 375 trillion THB (about US$ 11.4 trillion) in online transactions in June 2018, which was an increase from 250 trillion THB (US$7.6 trillion) in June 2017. Given the existing and projected benefits of e-Payments, it will be critical for the Revenue Department to develop regulation that will enable easy and increased use of e-Payments, and remove provisions that would introduce any kind of burden in the process.
Innovation-enabling and flexible legislation is crucial to the realization of the country’s goals under Thailand 4.0, which will become amplified as Thailand takes on the 2019 ASEAN Chairmanship with digital innovation as a key theme. This legislation closely follows the development of other digital economy related regulations, such as the Personal Data Protection Bill and the Cybersecurity Bill. The Ministry of Digital Economy aims to pass both regulations by the end of the year, prior to elections. Upon passage, it will be critical for these regulations to be transparent and in line with international best practices, especially to position Thailand as a leader in digital economy development, in line with its ASEAN Chairmanship themes to advance digital prosperity and innovation.
2018 TELMIN Business Mission
From December 4-6, the US-ASEAN Business Council led a delegation of 13 U.S. companies on its Business Mission to the 18th ASEAN Telecommunications and Information Technology Ministers Meeting (TELMIN). The Mission’s plenary engagements included a presentation during the TELSOM+US Consultation, and a working luncheon with the TELMIN and TELSOM Leaders. This 2-hour luncheon was the longest slot given to any private sector group on the formal agenda of the TELMIN, and included presentations by Naveen Menon, the Council’s ICT Committee Chair and President for ASEAN of Cisco Systems, and Ralph Haupter, President of Microsoft Asia and Corporate Vice President of Microsoft Corporation. Every TELMIN and TELSOM leader was in attendance, in addition to the Secretary Generals of ASEAN and the International Telecommunications Union (ITU). In addition to these plenary events, delegates also engaged the Ministers bilaterally to discuss mutual integration and investment interests. The Council held nine bilateral meetings in total with government officials from the United States, Lao PDR, Indonesia, Japan, Malaysia, Thailand, Cambodia, the Philippines and Myanmar. Delegates also attended the TELSOM Welcome Dinner, the TELMIN Gala Dinner and Annual ASEAN ICT Awards Ceremony.
During the TELSOM+US Consultation and the plenary luncheon, the delegation tabled three initiatives for 2019 (as part of the 2019 ASEAN-US ICT Work Plan):
The Council’s presentation to the TELSOM+US Consultation detailing these initiatives is attached, as well as the agenda for the working luncheon. The Council’s proposals were welcomed and approved by the TELMIN and TELSOM leaders at the meetings. The Council will look to follow up on these proposals and execute these initiatives in 2019. Please contact Shay Wester (email@example.com) and Ella Duangkaew (firstname.lastname@example.org) if you are interested in participating in any of these initiatives, or have any questions.
Thailand Draft Cybersecurity Bill
On December 14, the Thai Ministry of Digital Economy and Society released its latest revision on the Draft Cybersecurity Bill, following a public hearing period that ended in October (found here in Thai). The Council is developing an industry letter on this latest draft Bill, and is urgently seeking member comments. Please submit all final comments to Ella Duangkaew (email@example.com) on the industry letter by EOD December 20 SGT. Please contact Ella Duangkaew (firstname.lastname@example.org) with any questions, or for a copy of the letter.
Malaysia National Fiberisation and Connectivity Plan (NFCP)
Malaysia's Communications and Multimedia Commission (MCMC) has drafted a national fiberisation and connectivity plan (NFCP) to enhance the country's broadband infrastructure. The NFCP aims to improve broadband quality and coverage by enabling affordability and availability of internet access for all and expanding fiber networks. The NFCP is meant to be implemented over the next five years (until 2023). Click here to review the draft National Fiberisation and Connectivity Plan.
The Council is urgently seeking your final feedback and revisions on a draft industry letter on the NFCP. Please provide your feedback on the Council's final draft industry letter to Ella Duangkaew at email@example.com by COB Thursday, December 20. Please contact Ella Duangkaew (firstname.lastname@example.org) with any questions, or for a copy of the letter.
|IN THIS UPDATE|
The Digital Transformation of Infrastructure Reuters 14th Dec 2018
Gamified tourism app Get Up wins first Brunei Hacks Biz Brunei 9th Dec 2018
Call for close coordination in cybersecurity Borneo Bulletin Online 8th Dec 2018
Vietnam, Cambodia boost information safety cooperation Nhan Dan Online 17th Dec 2018
Telcos contribute $9 million to USO fund Khmer Times 14th Dec 2018
‘The time for digitalisation is now,’ experts tell local firms Khmer Times 13th Dec 2018
Official warns of cyber attacks Khmer Times 12th Dec 2018
Police in Poipet raid online gambling operation Khmer Times 12th Dec 2018
Government builds high-speed internet to support MSMES Antara News 12th Dec 2018
National Online Shopping Day Targets Rp 7t in Transactions Jakarta Globe 12th Dec 2018
Cyberattacks increase ahead of presidential elections Antara News 12th Dec 2018
Indonesia can boost exports using China digital platforms: Ambassador Antara News 11th Dec 2018
Indonesia’s e-commerce sales set to hit $65 bn in 2022 The Nation 10th Dec 2018
Government Blocks Illegal FinTech Websites & Apps in Indonesia | Indonesia Investments Indonesia Investments 10th Dec 2018
Indonesia to study China’s offer on 5G technology development The Jakarta Post 7th Dec 2018
Electronic signature law will boost E-commerce, govt tells NA Vientiane Times 13th Dec 2018
Costs of Cable: Laos Ranks Low, Has High-Price Broadband Connections Laotian Times 10th Dec 2018
Cyberjaya to be revived as a tech hub NST Online 14th Dec 2018
Extend fiberisation to other infrastructure, govt urged New Straits Times 12th Dec 2018
East M’sia’s mobile internet usage highest in the country BorneoPost Online 9th Dec 2018
e-commerce platforms need to strengthen DNS security BorneoPost Online 9th Dec 2018
Telenor completes NB-IoT trials in Myanmar Mobile World Live 12th Dec 2018
3rd telco faces franchise trouble before House panel Rappler 14th Dec 2018
DICT targets 500k digital workers Manila Standard 14th Dec 2018
PHL ranking in B2C E-commerce index jumps four notches in 2018 BusinessMirror 14th Dec 2018
PHL still ranked 10th in white paper on digital transformation BusinessMirror 12th Dec 2018
House OKs bill penalizing e-violence vs. women CNN 11th Dec 2018
Top 25 tech stocks hit average returns of 5.7% in December Singapore Business Review 14th Dec 2018
Singapore defends crown in Asian Digital Transformation index Singapore Business Review 14th Dec 2018
Faster patent for fintech firms in Singapore Channel NewsAsia 14th Dec 2018
MDES: 18th TELMIN approves Thailand’s proposal related to cyber security National News Bureau of Thailand 14th Dec 2018
DIP: Over 10,000 SMEs targeted for online operations in 2019 National News Bureau of Thailand 14th Dec 2018
DEPA offers tax deduction up to 200% for software purchases by SMEs National News Bureau of Thailand 13th Dec 2018
Thailand’s cyber security proposal approved Vietnam Plus 11th Dec 2018
Asean cities to ‘get smart’ Borneo Bulletin Online 9th Dec 2018
E-payment tax to take effect in 2020 Bangkok Post 8th Dec 2018
Internet economy continues strong gains Bangkok Post 8th Dec 2018
E-commerce players up in arms over tax Bangkok Post 7th Dec 2018
Plan to shepherd 600,000 SMEs into e-commerce next year Bangkok Post 7th Dec 2018
700MHz auction postponed from February to 3rd quarter Bangkok Post 7th Dec 2018
E-passports for Vietnamese citizens expected by 2020: public security ministry Viet Nam News 17th Dec 2018
Hospitals going digital Vietnam Net 14th Dec 2018
Vietnam, Russia step up cooperation in e-government building Vietnam News Agency 14th Dec 2018