AIS faces $2.5b penalty over contract amendments: report

Staff writer
20 Dec 2010
00:00

Thailand’s top cellco Advanced Info Service may have to pay up to 75 billion baht ($2.5 billion) for making illegal amendments to its mobile phone concession contract with state-owned TOT.

According to a committee appointed by Information and Communications Technology Minister Juti Krairiksh, nine amendments made to the contract between AIS and TOT over the years violate the 1992 Public-Private Joint Venture Law, reports theBangkok Post.

One amendment, in which TOT agreed in the mid-1990s to reduce the share AIS paid on its prepaid mobile revenue, has cost the government 55 billion baht in lost revenue, as prepaid eventually grew to account for 90% of the mobile market, the report said.

The committee also concluded that AIS owes another 20 billion baht in unpaid network roaming fees.

The committee report also recommends that AIS be pressured to return to a 30% revenue-sharing payment for prepaid service that should increase incrementally to 35% by the end of its concession in 2015, the Post reports.

Whether TOT will take legal action against AIS based on the committee’s recommendations depends on whether the recommendations are approved by the cabinet.

AIS chief executive Wichian Mektrakarn said the amendments were legitimate, and that he was unhappy that his company was being singled out by the committee, although the committee is also reviewing amendments made by rival cellcos DTAC and True Move to their concessions with CAT Telecom, the report said.

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