The Nation (30 October 2007)
International Engineering (IEC) and Total Access Communication (DTAC) have agreed to terminate their airtime-provider agreement. The move is expected to help the cellular operator cut about Bt100 million a year in expenses. In a filing yesterday with the Stock Exchange of Thailand, IEC said both companies had mutually agreed to terminate the contract DTAC awarded to IEC in April 1998 and subsequent supplement agreements before the April 2015 contract expiry. IEC was paid Bt290 million in cash in return. IEC wants to divest the business, which is expected to generate undervalued return in future. The service is only for DTAC's post-paid subscribers, while consumers today tend to prefer prepaid phone service. DTAC chief commercial officer Thana Thienachariya said IEC had provided airtime service to 70,000-80,000 post-paid DTAC subscribers. The contract termination will enable the company to take better care of its customers and cut the revenue share with IEC of about 13 per cent on each customer's monthly bill, he added. One telecom analyst said the deal cancellation saved about Bt100 million of service fees a year for DTAC. DTAC currently has 14.9 million subscribers. Third-quarter revenue increased 33 per cent year on year to Bt16.4 billion, due to customer growth and February's introduction of an interconnection regime by the National Telecommunications Commission. The interconnection regulations require all telecom operators that signed bilateral interconnection deals to share voice and data revenue proportionately between the networks involved in the calls. The same telecom analyst said DTAC's third-quarter interconnection costs dropped to Bt719 million, from Bt1.457 billion in the second quarter, due to DTAC's promotional packages that encouraged calls within the network. The analyst believes DTAC's fourth-quarter performance will show better results, because the net interconnection-charge expense is expected to decline further, while a price war in the post-paid segment has recently subsided.
International Engineering (IEC) and Total Access Communication (DTAC) have agreed to terminate their airtime-provider agreement. The move is expected to help the cellular operator cut about Bt100 million a year in expenses. In a filing yesterday with the Stock Exchange of Thailand, IEC said both companies had mutually agreed to terminate the contract DTAC awarded to IEC in April 1998 and subsequent supplement agreements before the April 2015 contract expiry. IEC was paid Bt290 million in cash in return. IEC wants to divest the business, which is expected to generate undervalued return in future. The service is only for DTAC's post-paid subscribers, while consumers today tend to prefer prepaid phone service. DTAC chief commercial officer Thana Thienachariya said IEC had provided airtime service to 70,000-80,000 post-paid DTAC subscribers. The contract termination will enable the company to take better care of its customers and cut the revenue share with IEC of about 13 per cent on each customer's monthly bill, he added. One telecom analyst said the deal cancellation saved about Bt100 million of service fees a year for DTAC. DTAC currently has 14.9 million subscribers. Third-quarter revenue increased 33 per cent year on year to Bt16.4 billion, due to customer growth and February's introduction of an interconnection regime by the National Telecommunications Commission. The interconnection regulations require all telecom operators that signed bilateral interconnection deals to share voice and data revenue proportionately between the networks involved in the calls. The same telecom analyst said DTAC's third-quarter interconnection costs dropped to Bt719 million, from Bt1.457 billion in the second quarter, due to DTAC's promotional packages that encouraged calls within the network. The analyst believes DTAC's fourth-quarter performance will show better results, because the net interconnection-charge expense is expected to decline further, while a price war in the post-paid segment has recently subsided.
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