TOT ordered to pay TT&T USD750 million in arbitration case

9 Apr 2008

The Bangkok Post writes that state-run telco TOT has been ordered by an arbitration court to pay its privately owned fixed line rival and concessionaire TT&T THB24 billion (USD750 million) in returned revenues, fees and tax backdated to a period ending March 2005. In addition, TOT was ordered to pay a portion of revenues to TT&T until the expiration of its current revenue-sharing concession; TT&T operates provincial fixed line network services under a build-transfer-operate (BTO) licence held by TOT. According to Prasitchai Kritsanayunyong, an executive vice president of TT&T, the arbitration panel concluded that TOT had introduced other services in addition to fixed line telephony over infrastructure built and maintained by TT&T at a cost of over THB1 billion per year, but had not offered to share additional revenues with the private operator. He added TT&T had tried unsuccessfully to negotiate with TOT between 1995 and 2004. TT&T said it had directly paid TOT THB94.7 billion under its BTO concession, including THB57 billion in assets and THB37.2 billion in revenue sharing, plus THB510 million in excise tax. It said TOT collected THB124.8 billion in network access charges from mobile operators for traffic on TT&T’s network up to March 2005. A TOT executive said TOT would appeal the ruling to the Administrative Court because the large amount of compensation would affect its financial status. A similar case between TOT and private full-service operator True Corp is still unresolved in the Administrative Court. According to TeleGeography’s GlobalComms database, in February 2006 the Arbitration Court ordered TOT to pay True THB9 billion (USD230 million) plus interest in lost revenues to settle network access charge claims dating from 1990 to 2002; TOT appealed and the following June the Administrative Court overturned the verdict, leading to a counter-claim from True.