TOT board to discuss turnaround strategy

TOT board to discuss turnaround strategy
Bangkok Post (19 October 2007)

The TOT board is scheduled to meet today with the president and other top executives to discuss the state telecom enterprise's turnaround strategy before proposing it to Tris Ratings, which will assess and forward the plan to the Finance Ministry, TOT's main shareholder. Acting president Kittipong Taemeyapradit said that all board directors except for chairman Gen Saprang Kalayanamitr, who is abroad, would attend what he called a brainstorming session for the turnaround strategy. It plans to wrap up the plan and forward it to Tris next month. This is the company's first meeting since Tris, the ministry's consultant, told TOT to formulate a turnaround plan. The matter is urgent so the board wanted to hear comments and views from all executives before drafting the strategy, Mr Kittipong said. ''We want to hear from them how they can generate revenue, from existing or new services, and how to cut expenditures,'' he said.
The turnaround strategy would act as a guideline for management from 2007 to 2011, he said. However, it could be adjusted according to market conditions, he added. Under Tris's recommendation, TOT should submit a qualitative plan by next month, while a quantitative plan has been submitted every three months. Tris also recommended that the qualitative plan should not take into account external factors that would affect TOT's revenue. These included regulations and politics. Tris believed it was more important to assess TOT's potential based on its own organisation, Mr Kittipong said. Even so, he added, it could hardly be denied that uncontrollable external factors have weakened TOT's status. TOT was corporatised in July 2002 to prepare for open competition and a stock market listing, which has since been postponed indefinitely. But five years on, it has underperformed the booming local telecom sector. Revenues fell for three consecutive years after it was switched from a state enterprise to a public company. In 2004, TOT earned 76.9 billion baht with 11.42 billion baht in profit. But in 2005, its revenues fell to 76 billion with a profit of 6.7 billion. In 2006, revenue was 75.76 billion baht and profit improved slightly to 6.98 billion baht. This year, TOT's first-half revenues fell sharply to 25.94 billion baht with a mere 2.8 billion baht in profit.