The National Broadcasting and Telecommunications Commission (NBTC) has ordered K4 Communication Company, which holds one of its mobile virtual network operator (MVNO) licences, to stop distributing SIM cards pending the completion of a probe to see whether the company's invitation to people to invest in its top-up kiosk business with the promise of significant returns has breached its rules.
The regulator also warned people that if they are invited to invest in the company's top-up kiosk business, with the promise of high returns on the basis of multilevel marketing (MLM), this might result in risks in the future.
It added that if the NBTC finds that the company has referred to its NBTC licence while inviting members of the public to invest in the kiosks and such an invitation is found to have led to public damage, this would be deemed as having violated its rules.
Trairat Viriyasirikul, acting secretary-general of the NBTC, said the only business operated by the company that falls under the NBTC is its SIM card business.
The top-up kiosk business is regulated by the Bank of Thailand, while MLM is supervised by the Finance Ministry, he said.
The NBTC move comes after it received a public inquiry in February 2024 regarding investment in the top-up kiosks known as "Katie Pansuk", which offers high returns to prospective investors.
Mr Trairat said the NBTC had presented the case to related state agencies.
According to the NBTC, K4 Communication's Line group invited people to invest in the kiosks.
The company also referred to its NBTC licence in a bid to win the confidence of members of the Line group, noted the regulator.
The NBTC probed the case in July and summoned the company to clarify its position throughout this year.
According to K4 Communication's investment proposal, the company attracted people to purchase its top-up kiosks, which were to be installed at a cost of 50,000 baht per unit, in exchange for returns of 300 baht per day throughout a period of 500 days, representing a total return of 150,000 baht to the investor.
The company installed 15,000 top-up machines nationwide.
K4 Communication obtained its MVNO licence in March 2019 and began operating in October 2022.
An MVNO is a mobile virtual network operator, which rents another telecom network to operate its service.
Mr Trairat said in 2023 the company paid only 7,000 baht in telecom business fees based on its telecom business revenue of roughly 5 million baht.
However, the company continuously increased its registered capital from the original 5 million baht in 2022 to reach 500 million baht this year.
Mr Trairat said it is doubtful whether the capital increase is based on income from its licensed telecom business or related to other types of business not related to the licence.
He said if the company is found to operate other types of businesses, it must consider whether such a business is luring its users to invest in exchange for benefits other than providing telecom services, which is prohibited by NBTC law.