Bt64 bn set for new TOT network

The Nation (9 November 2007)

State agency will also cut 2,000 staff through early retirement.

TOT will spend Bt64 billion from 2008 to 2011 on installing its new cutting-edge network, and will eliminate 2,000 staff for leaner operations in accordance with its turnaround plan.

Spokesman Natee Sukonrat yesterday said TOT would spend Bt16 billion during each of the four years to install its next-generation network (NGN) nationwide and expand its broadband-Internet network. Of the budget, 60 per cent will be for the NGN roll-out.

The NGN will enable TOT to offer voice and data services efficiently and earn more revenue, Natee said. "We've no problem financing the project," Natee said. "Usually, we spend Bt12 billion a year on expanding our existing telecom networks."

TOT now has about 200,000 broadband-Internet subscribers. Telecom industry experts predict total broadband-Internet subscriber numbers in Thailand will reach 1 million this year, from the present 800,000.

TOT and CAT Telecom must respond quickly to intense competition from private telecom operators.

One telecom analyst said TOT was making a viable move by focusing on the broadband market instead of the saturated cellular market.

"It may be the only way for it to survive," the analyst added.

Natee said broadband Internet would become TOT's main revenue source by 2011, at which time it is expected to contribute 70 per cent of total income, replacing fixed-line voice service, which currently accounts for 70 per cent.

He added that the Finance Ministry, sole owner of TOT, ordered the state agency to come up with the turnaround plan.

The board recently asked TOT to add more details to the plan, which will be presented for its consideration next week before being forwarded to the ministry's State Enterprise Policy Office.
Moreover, TOT will cut staff to 17,000 between next year and 2011, from 19,000 now, through an early-retirement programme. The programme will cost TOT about Bt3 million per staff member.

TOT projects total revenue of at least Bt63 billion in 2011, up from this year's forecast of Bt50 billion. Excluding concession revenue, it should post Bt38 billion in 2011, up from this year's expected Bt28 billion.

TOT owns the concessions of Advanced Info Service, True Corp and TT&T.

In 2011, TOT expects to achieve a high net profit of Bt7 billion, the same as last year, Natee said.

The state agency's revenue projection excludes access-fee revenue, given that Total Access Communication (DTAC) and True Move stopped paying the fee to TOT last November, instead turning to comply with the National Telecommunications Commission's interconnection regulations. Their combined outstanding access fees are about Bt10 billion at present.

TOT previously earned more than Bt14 billion a year in access fees from three of CAT's cellular mobile-phone concessions - DTAC, True Move, and Digital Phone - for their connecting different networks via TOT's facilities.

The interconnection regulations require the telecom operators, which signed bilateral interconnection-charge deals, to share voice and data revenue between the networks involved in the calls.

The leasing of the third-generation (3G) broadband wireless network to cellular operators is intended to serve as its new revenue source, but TOT has made no progress in its plan to roll out the 3G network nationwide. This is because CAT Telecom has yet to make a decision on whether to sell to TOT all of its shares in their Thai Mobile cellular joint venture.

TOT and CAT own 58 per cent and 42 per cent, respectively, of Thai Mobile, the sole cellular operator owning the 1900-megahertz cellular spectrum, a platform for offering 3G service.