CAT telecom loses lawsuit against AIS unit DPC

30 Jul 2015

State-owned CAT Telecom has lost a key lawsuit with the central administrative court with AIS subsidiary DPC in which CAT was trying to ask the court to overturn a ruling by the arbitrator in regards to the controversial excise tax that was introduced by the Thaksin Shinawatra government and get DPC to pay it $63 million in lost revenue.

On 11 February 2003, the Thaksin cabinet passed a law introducing a telecoms excise tax.This tax would be deducted before the revenue share under the concession was calculated. CAT holds the 1800-MHz concession for DPC, an AIS subsidiary. The net effect of the tax meant a substantial reduction in total tax paid to the government.

After the 2006 coup by General Sonthi Boonyaratgalin, the Assets Examination Committee was set up and calculated the net loss to the state from the introduction of the excise tax in respect of DPC at $63 million (2.216 billion Baht). DPC is by far the smallest of the operators and was absorbed into AIS.

The interim military government on 26 February 2007 reduced the telecoms excise tax rate to 0, thus increasing the revenue share paid to CAT Telecom.

CAT and DPC went into arbitration with CAT claiming the 2.2 billion loss plus interest after DPC refused to pay. However, the arbitration committee ruled that DPC was complying with the laws at the time and that they cannot be retroactively billed. This ruling was then upheld by the administrative court that ruled that the arbitration committee did not overstep their mark and that the case was not a matter of public peace and order.

Meanwhile back in the present, ICT Minister Pornchai Rujiprapa has ordered all state agencies to stop the massive data center sprawl and use CAT Telecom’s data centers until a centralised government mega data center is completed.

IT sprawl means that various government agencies now have no less than 112 separate data center operations.

Pornchai said that the new mega data center would host 80,000 servers and cost between $857 million to $1.14 billion (30 to 40 billion baht). The selection process would be completed before the end of this year and the new government data center would go online by 2017.

He said this centralization would save redundant vestment to the tune of $23 million (8 billion baht) a year.

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