The IPO of Thai state-run fixed line incumbent TOT Corp has been pushed back once again, to May 2006, the company said in a combined statement with the Ministry of Information & Communication Technology. TOT has postponed its original plan to list on the Stock Exchange of Thailand before the end of this year while it wraps up legal disputes with private concessionaires, reduces its regulatory costs and continues to lobby the National Telecommunications Commission (NTC) to make it exempt from telecoms excise tax. The telco is currently negotiating with the NTC to reduce its licence fees to THB1 billion a year from over THB5.7 billion, and plans to consult the Finance Ministry to argue its case for not paying the telecoms excise tax that applies to rival private telecom operators. Arguably TOT’s biggest challenge is the prospect of facing as many as seven lawsuits from private operators claiming the incumbent has overcharged carry their customers’ calls to different networks. The lawsuits have a combined claim value of THB50 billion.
The privatisation of TOT and its state-owned sister company CAT has been an ongoing saga since the adoption of a new, WTO-compliant telecoms law in late 2001. As long ago as July 2002 the government changed the company’s name to TOT Corporation Public Company Ltd (TOT Corp) in anticipation of a sell-off of part of the operator and flotation on the Stock Exchange of Thailand. The major stumbling block to an IPO of either operator is the state’s reluctance to confirm its loose plans for the merger of both entities. In January 2004 the government confirmed that it planned a TOT-CAT merger, saying it needed to combine the two in order to strengthen them in the face of growing competition. However, it declined to give a timetable and the lack of a conversion scheme has contributed to the problem as both telcos struggle to appraise their assets prior to their respective public listings. The company had been keen to complete the sale before the end of 2005 to benefit from favourable tax limits for local investors, which expire at the end of the year.