TOT board member quits to block two pro-AIS projects

23 Jun 2014

Thailand state owned telco TOT corporation has seen its second board member resign citing opposition to a mad rush to get projects approved that would have benefited TOT’s concessionary partner AIS at the state’s expense.

The representative from the office of the attorney general, Prasit Siripaporn, revealed he had resigned from the TOT board on 11 June and that many others were soon to follow suit.

Prasit said his resignation was to allow military junta the National Council for Peace and Order to appoint new board members, but also to stop TOT management from rushing through four projects without due diligence.

Chief of these was a project that would allow AIS to use TOT’s 2.1-GHz 3G spectrum. In 2012 AIS famously outbid itself on the 3G non-auction so it could choose its spectrum slot first to be adjacent to TOT.

Another project was to refarm AIS’ 900-MHz 2G concession for 3G and 4G even though the concession was due to expire in 2015. Prasit said the project papers put before the board had no clarity at all as to how the investment would be reused post 2015.

Another two projects involved FTTH and fixed line expansion that was divided up into small projects so they could be approved individually without having to go to the cabinet for approval. Thailand’s public expenditure rules require that any project worth more than 1 billion baht ($30.8 million) gain cabinet approval.

The same ruse was successfully used for Shin Satellite’s Thaicom 3 satellite where the satellite was never approved by the cabinet but individual transponders, each under the one billion baht threshold, were approved by bureaucrats.

Meanwhile, fellow state telco CAT Telecom has asked the NCPO junta for permission to participate in any future LTE spectrum auction.

Previously, state enterprises were prohibited from competing with the private sector under article 84(1) of the 2007 constitution. With the coup and the constitution annulled, CAT now has joined TOT in asking permission from the ruling junta to bid for 1800 when it comes up for renewal.

Think-tank TDRI’s Dr Deunden Nikomborirak said that she was not opposed to state enterprises joining in the auction so long as the auction was held in a transparent and competitive manner. She noted that 84(1) was never observed even with a constitution in place so having it or not makes little difference.

However, it seems that the national broadcasting and telecommunications is intent on excluding Telenor-owned Dtac from the competition. NBTC secretary-general Takon Tantasit first said he would use the foreign dominance notification to exclude Dtac which was clearly foreign dominated, before later saying he would set a 1800-MHz spectrum cap at 25MHz, the exact amount Dtac has on its 2G concession.

Originally the auction was penciled in for this August. That has been postponed indefinitely by the military, which means TrueMove 2G gets yet another extension to its concession that was supposed to end in October 2013 but which still has 4 million subscribers yet to port out.

Elsewhere, the NBTC has backtracked on an earlier decision to use USO funds to compensate the FIFA World Cup rights holder after it ordered the broadcasting rights to be handed over hours before the first matched kicked off.

The use of $13 million (427 million baht) of USO funds to provide free-to-air football for national unity and happiness has been controversial and has even triggered the office of the comptroller-general to ask the junta to reconsider the NBTC act, effectively asking them to disband the NBTC, and demand the USO funds be handed over to the treasury so that any future spending will be according to government procurement rules.

Not content with forcibly taking away RS’ intellectual property rights and not paying compensation, the NBTC has also ordered that RS refund the cost of set top boxes to anyone purchasing them with the intent to watch the World Cup under the guise of consumer protection.

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