NTC rejects TOT’s USO claim as telco looks to the skies to cut costs

7 Sep 2005

Thailand’s National Telecommunications Commission (NTC) has rejected a THB13 billion (USD317.9 million) compensation claim from state-run fixed line incumbent TOT Corp. TOT had asked the regulator for compensation relating to its investment in rural telecom services as part of its Universal Service Obligation (USO), saying that it needed the money in preparation for the forthcoming liberalisation of the fixed line market. Another appeal by TOT, asking the NTC to reduce its telecoms excise tax, is ongoing. If that appeal also fails, TOT claims it will have to further postpone its forthcoming IPO, currently scheduled for May 2006.

Meanwhile, TOT is currently preparing the rollout of services via Shin Satellite’s new iPSTAR orbiter, which launched last month. The iPSTAR project is widely regarded as Shin Satellite’s most ambitious yet and will provide capacity for high speed broadband services to customers across Asia, following its launch from French Guyana in mid-August. TOT’s management team has drawn up a business plan for services via the satellite which is currently awaiting approval from the company’s board. The telco wants to use iPSTAR for a USO programme to replace 19,000 of its existing satellite-based long-distance public telephone lines, as well as 40,000 dial-up modem connections at 40,000 rural schools, public organisations and medical centres. The USO plan will save TOT around USD48 million a year. It also hopes to roll out a residential multimedia broadband business providing high speed internet and leased line services to the public.

Thailand, TOT