CAT suing cellcos for USD150m to pay TOT charges; payment could include Thai Mobile stake

26 Jun 2007

The Bangkok Post reports that a protracted dispute appears to be nearing a climax with a decision by state-run CAT Telecom to pay network access charges to fellow government-owned fixed line operator TOT, and in turn sue True Move and DTAC, the two mobile operators that hold Build-Transfer-Operate (BTO) licences with CAT, for THB4.8 billion (USD150 million) in compensation. DTAC and True Move stopped paying network access charges to TOT in November last year, arguing that the new system of interconnection rates approved by the National Telecommunications Commission (NTC) should take precedence. TOT claims it is owed THB6 billion, and CAT has agreed to pay a first installment of THB2.4 billion on its mobile concessionaries’ behalf. However, in a further twist, an unnamed TOT executive said the payment would not be in cash, but that CAT would instead transfer its 42% equity stake in Thai Mobile, the struggling cellular joint venture between TOT and CAT. The stake has been valued at around THB2.4 billion. TOT had earlier offered to buy the shares to make it the sole owner of Thai Mobile, in the hope of reviving the business, which has debts of around THB6 billion.

The newspaper reports that the Ministry of Information & Communication Technology has given CAT the green light to take DTAC and True Move to the Civil Court. Under the terms of the original BTO concessions, CAT believes that it can seek compensation worth double the amount of access charges it has to pay. TOT, meanwhile, continues to insist that it should be allowed to collect access charges for the mobile operators’ use of its network, and regards access charges as a separate issue. The incumbent earned around THB14 billion last year from access charges. The three major cellular operators – Advanced Info Service (AIS, which operates under a BTO concession with TOT), DTAC and True Move – have signed interconnection agreements, but whilst DTAC and True Move are collecting the fees from each other, AIS has not begun to do so because it fears a lawsuit from TOT for breaching its licence. Sigve Brekke, chief executive of DTAC, disputed CAT’s contention that it is entitled to compensation at twice the amount of outstanding charges: ‘I’m 100% confident…We’ve never seen any statement that identified a double fine,’ he said. Mr Brekke said that DTAC, which was listed on the Stock Exchange of Thailand on Friday, had provided calculations of both access and interconnection charges in its first-quarter financial statement, which resulted in roughly equal totals. ‘We don’t care what TOT is doing,’ he said. ‘We’re sure about the access charge case following a study by our legal team, which coincides with a recent decision by the NTC to order TOT to enter into talks with DTAC for an interconnection agreement.’