TOT stakes its claim over all BTO networks

15 Mar 2007

The board of Thai state-run incumbent telco TOT says it plans to reaffirm its ownership rights over all existing telecommunications networks currently operated under build-transfer-operate (BTO) concessions, reports the Bangkok Post. Under the BTO system, private operators, including AIS, DTAC, True Corp and TT&T, agree to finance and construct fixed line and mobile networks of set capacity, before transferring ownership of the infrastructure to either TOT or international gateway provider CAT. From then on each private company operates services over the network for a predetermined period, sharing a large proportion (between 10% and 45%) of revenues with the state-run sister operators. BTO agreements cover the provision of a full range of telephony and data services.

TOT’s board, chaired by assistant army chief General Saprang Kalayanamitr, outlined its strategy to scrap the revenue-sharing based concession agreements with all private operators and introduce a rental system at a meeting attended by more than 1,000 TOT employees. Board director Dr Vuthiphong Priebjrivat said the strategy was aimed at turning the organisation into a ‘truly national telecom company’. Employees reportedly welcomed the move, although Dr Vuthiphong acknowledged that the strategy was sure to increase political and business tensions in the country. Private telecom operators have been at odds with TOT for months over the network access charges stipulated in some concessions, while attempts to unwind revenue-sharing concessions in favour of a different business model have been debated on and off for a decade. General Saprang expressed strong support for the plan, saying TOT was an agency that managed the country’s assets and had a duty to serve society. The general said he regretted that in the past, TOT’s assets were abused to create wealth for a certain group of (unnamed) people with the help of former state enterprise executives who disregarded national interest, adding that the board had agreed that all of TOT’s assets should be reorganised for social benefits. Dr Vuthiphong also said that the scheme would work to the advantage of the private operators, by allowing them to scrap the revenue-sharing system to pay rental fees at ‘fair rates’ instead.

Thailand, TOT