The National Security Council (NSC) has offered a 66.3 million-baht contract to China Telecom (Thailand), whose parent company has been banned in the US over security risk, to develop a national security digital system.

China Telecom (Thailand)'s information page on the Department of Business Development's website

The NSC published an announcement on its website on 20 September 2022 that, following invitations to bid on the project, China Telecom (Thailand) won the bid for the project and that the NSC agreed to sign a 66.3-million baht contract with the company for the development of a digital system for national security purposes.

Information on the Department of Business Development’s database shows three Chinese names listed as board members and lists the company’s activities as ‘Electrical installation’ and ‘Engineering activities and related technical consultancy’. Its shares are 100% owned by foreign entities, all but a fraction from Hong Kong.

China Telecom (Thailand) shares its logo with a telecommunications company with the same name which was banned in the US in October 2021 due to national security risks. The US authorities revoked China Telecom’s business license because the company was allegedly controlled by the Chinese government and ordered it to cease operations within 60 days after having its license revoked.

China Telecom is China’s largest telecommunication service, offering high-speed internet, mobile phone, and landline networks. Its largest shareholder is the Chinese government.

China Telecom's businesses in the Asia Pacific region

According to the company website, China Telecom (Asia Pacific) Pte Ltd is a subsidiary of China Telecom Global Limited, which is itself a subsidiary of China Telecom Corporation Limited. It has its headquarters in Singapore and oversees businesses in 15 countries, including Thailand.

On 27 June, Prachatai sent a letter to the Office of the National Security Council asking how the company won the bid, whether any other company was considered, and whether the NSC has any security concerns.

We received a reply in writing on 3 July. The NSC said that a total of three companies bid for the project, and that judgement was made based on specific detail and characteristics of the project and the proposed price. China Telecom (Thailand) was invited to bid on the project following a presentation which shows its expertise in telecommunication services and infrastructure. It has also worked with other Thai companies, such as National Telecom Plc, True IDC, and JD Central.

According to the Government Procurement database, the two other companies that took part in the bid were Le Siam Internetwork Company Limited and Future Telecom Company Limited.

According to the Government Procurement database, three companies bid on the project.

The NSC said that China Telecom Global Limited is the largest shareholder in China Telecom (Thailand), and that the company is allowed to operate in Thailand. The letter also noted that the NSC has a policy on data classification, and requires any acquired system and equipment to meet international standards.

The NSC’s contract with China Telecom (Thailand) led to concerns over digital security and risk of data leaks due to the company’s connection to the Chinese government. On 2 July, Klaikong Vaidhyakarn, a former Future Forward party MP now working for the non-profit organization Progressive Movement, asked on his twitter account why Thailand’s national security agency is trusting a Chinese company to handle a project involving national security when other countries are questioning whether Chinese technology poses a security risk.