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TMCNet:  TOT faces financial tightening

[December 17, 2012]

TOT faces financial tightening

Dec 18, 2012 (Bangkok Post - McClatchy-Tribune Information Services via COMTEX) -- The new chairman of TOT Plc has outlined his priorities to manage what he terms a "precarious financial status" before TOT's concession revenue vanishes at the end of next year.

Under Section 84 of the Frequency Allocation Act of 2010, TOT must return concession revenue and revenue from frequency-related services to the National Broadcasting and Telecommunications Commission (NBTC) starting Dec 20, 2013. The NBTC will then pass the revenue to the state.

"Concession revenue will be our most critical item in 2013," said Udom Puasakul, TOT's new board chairman. "It immediately needs to be discussed and we must prepare for survival without concession revenue." Mr Udom is a former director-general of the Public Works Department.

TOT's concession revenue makes up 60% of its total revenue. The state telecom enterprise took in 19 billion baht from the AIS concession last year and reported a net profit of 6 billion baht. The AIS concession will expire in 2015.

The concessions of TOT's other two concessionaires, True Corporation and TT&T Plc, are due to expire soon.

"Without revenue sharing from AIS, our financial state will suddenly turn red," said Mr Udom.

He said a resolution is desperately needed now that the three mobile phone operators have obtained 3G licences to operate wireless broadband services on the 2.1-gigahertz spectrum.

The new licensing regime lets operators quickly move their existing 2G subscribers to 3G networks run by new subsidiaries to escape the concession system.

Mr Udom said TOT must speed up its plan to become a network service provider instead of an operator.

He also wants the state enterprise to outline a clear business plan for the second-phase 3G project.

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