TOT launches legal assault on True, threatens to shut it down

22 Feb 2006

Thai state-run fixed line operator TOT Corp yesterday threatened to terminate fellow telco True Corp’s wireline concession, claiming its rival had failed to abide by its contract. The move follows True’s major arbitration victory against TOT on Monday which settled a long-running network dispute. TOT’s president Teerawit Charuwat said: ‘There is enough evidence that True has repeatedly and seriously violated the concession terms for us to end its contract.’ He added that TOT would pursue the process through the Attorney General’s Office ‘soon’. He went on to say that TOT would pay True THB26 billion (USD660 million) as compensation for terminating the concession, due to run until October 2017, and would seize back its network and take control of its customers.

Monday’s Arbitration Court decision ruled that TOT has to pay True THB9 billion (USD230 million) plus interest in lost revenues for a period ending August 2002, representing a share of TOT’s earnings from providing special services on True’s network. TOT has been told to make the payment within 60 days, but Charuwat thinks it could take a year before the dispute is completely resolved, which could cause TOT to delay the launch of its initial public offering (IPO) once again. Unsettled court cases between TOT and its private concession holders, including True and TT&T, are part of the reason it did not list on the Thailand Stock Exchange last year, because of concerns that the lawsuits would make its stock unattractive in the eyes of investors.

Thailand, TOT, True Corp