Thailand's CAT and TOT in turmoil

Don Sambandaraksa
18 May 2012

Thai ICT Minister Anudith Nakorntap has told state-owned TOT’s board to stop following the failed 3G business plan, that has so far cost $510 million (16 billion baht) with little to show after over two years of operations.

Anudith said that to date, fewer than half the planned 5,320 base stations have been rolled out and the telco had only around 200,000 users, less than one twelfth of the projected target of 2.5 million users.

Operational costs of the network exceeded revenue by a factor of four.

Anudith ordered TOT to come up a new business plan with strategy coming directly from the ICT Ministry. TOT will now have to report weekly into the State Enterprise Planning Office, chaired by Finance Minister Kittirat Na Ranong, with new short and long-term plans to be drawn up. The SEPO is also responsible for a post-concession survival plan for both of Thailand’s state owned telcos, TOT Corporation and CAT Telecom.

However, the ICT Minister said that TOT could not just keep adding base stations as that would only increase costs. He said that TOT should have known better than to enter a retail market as they could not compete with the private sector operators.

Meanwhile, Thai language daily Thairath has quoted an anonymous source within CAT Telecom’s board of directors saying that the board has decided to halt the controversial TrueMoveH 3G project after both the counter-corruption commission and the ICT Ministry have deemed the contract to be illegal.

The source said that CAT would end cooperation with TrueMove H, meaning that TrueMove H would no longer be able to get import licences for new equipment but might be able to continue operations on existing equipment for the time being. The source also said that CAT’s own 3G network My 3G, which runs on the TrueMove H network, is to be cancelled to prevent legal complications.

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