TOT claims USD6.8bn compensation from AIS, DTAC, True and TT&T

2 Feb 2011

Thai state-run telco TOT is seeking a total of THB210.5 billion (USD6.8 billion) in damages from private sector domestic telecoms operators, resulting from contract changes made under previous governments and non-payment of fees under a previous system of access charges. TOT will pursue THB76.4 billion from Advanced Info Service (AIS), THB97 billion from Digital Total Access Communication (DTAC), THB36.4 billion from True Corp and THB700 million from TT&T, reports Bloomberg. The ICT ministry will negotiate with the companies and report back to the Cabinet in 15 days, Prime Minister Abhisit Vejjajiva said. ‘The negotiation aims to go back to use the original contracts,’ Abhisit told reporters today after a Cabinet meeting, adding that ‘If the negotiation fails, the ICT ministry will use legal options, including a lawsuit.’

As part of sector liberalisation Thailand scrapped the access charge system in favour of interconnection fees but the process was messy, with the private operators signing interconnection agreements in 2006 which were not immediately recognised by TOT, whilst withholding the access fees, leading to TOT’s damages claims. Separately, amendments to the private companies’ concessions were ruled illegal by a state legal advisory body under a military-appointed administration that took power following a 2006 coup against former prime minister Thaksin Shinawatra, whose family previously controlled AIS.

TOT is seeking THB138.6 billion for unpaid access charges from state-run CAT Telecom’s build-transfer-operate (BTO) concession holders DTAC, True and Digital Phone Co (a wholly owned subsidiary of AIS), and CAT itself (THB4.2 billion), taking the grand total claim to THB214.7 billion. Damages sought directly from AIS – holder of a BTO concession from TOT – relate solely to concession changes causing loss of revenue-sharing earnings at the state-run firm (as reported in detail in TeleGeography’s CommsUpdate yesterday).

TOT deputy president Hutacharoen Noppanat said the telco was acting to protect the interests of the public, adding: ‘TOT is not singling out any one party. We are taking action now to protect our rights before the statute of limitation for certain cases expires.’ All private sector operators involved have disputed TOT’s claims, which could take several more years to be resolved.