Thailand: TOT to Create Separate Companies for Network

Thailand: TOT to Create Separate Companies for Network Operation and Telecom Services


Friday, 14 July 2006
TOT Plc intends to create a subsidiary to provide telecommunications services, while it will continue to operate the underlying network. The new structure is aimed at avoiding regulatory fees charged under the Telecom Business Law, and is one part of a larger programme aimed at increasing TOT’s efficiency.
Over the next few years intends to establish subsidiaries to take over business lines such as Internet services and back-office billing, which will be outsourced from the parent company. One of the subsidiaries would be the sole provider of TOT's telecom services. It will apply for a Type 1 license, which means it will not have to pay the universal service obligation (USO) fee, which stands at 4% of the company's operating revenue. Instead, it would only have to pay a license fee of 3% of revenue, US$ 0.30 per subscriber telephone number per year, and a spectrum fee, to be determined. The National Telecommunications Commission (NTC) grants Type 1 licenses to service providers that do not have their own networks.
TOT currently has a Type 3 license as an operator and network provider, which means it has to pay license, numbering and spectrum fees. It must also contribute to the universal service fund for the cost of service provision high cost and remote areas. With a Type 3 license, TOT calculated that its regulatory fee would amount US$ 125 million a year while its total profit would be US$ 300 million. In addition, TOT would receive less revenue under a proposed interconnection regime, expected to come into force at the end of the year. TOT claims it could not survive if it had to pay all of the regulatory and interconnection costs.
Somchai Thean-anant, the TOT’s vice chairperson, said the new telecom service subsidiary would lease the network from TOT and generate the most revenue. The network operations company would still have to pay the regulatory fees, but it would be a smaller proportion of its earnings because it would generate less income.
Source: Thai News Service - WDR/Intelecon Regulatory News