Cabinet to discuss TOT's compensation claims

1 Feb 2011

The Thai government is expected to discuss compensation claims made by state-run telco TOT against the country’s three privately-owned mobile operators, AIS, DTAC and True Move. The Nation reports that ICT Minister Chuti Krairiksh is expected to seek Cabinet approval for a plan to set up separate committees to negotiate with each of the three companies. The Supreme Court previously ruled that ex-prime minister Thaksin Shinawatra had abused his powers while in office to benefit AIS and its parent Shin Corp, formerly owned by Thaksin and his family. The wrongdoings included ‘illegal’ amendments of the build-transfer-operate (BTO) concession contract between AIS and TOT, resulting in the loss of state benefits.

TOT is demanding damages of around THB73 billion f(USD2.4 billion) from AIS by 15 February 2011 or it will take the case to court. Of the damages, THB30 billion is alleged to have resulted from the telecom excise duty imposed by the Thaksin government in 2003; TOT has already taken the excise issue to an arbitration panel. The excise rates were reduced to zero by the Surayud Chulanont government in 2007. The remainder of the claim derives from two amendments to AIS’s concessions made under previous TOT management. An amendment in May 2001 reduced AIS’s pre-paid revenue share with TOT from 25% to 20% until the end of the concession period in 2015. Under its original concession terms AIS had to share pre-paid revenue with TOT at an incremental rate of 15% from 1991 to 1995, 20% in 1996-2000, 25% 2001-05 and 30% 2006-15. A further amendment in September 2002 allowed AIS to offer network roaming and deduct the roaming expenses from gross revenue before paying the concession fee to TOT, retroactively effective from October 2001. AIS says it will not pay the compensation, as it believes it has done nothing wrong.