TT&T announces 2008 restructuring

Bangkok Post (4 December 2007)

Three subsidiaries to list on SET, MAISeoul _ TT&T, the provincial fixed-line telephone provider, has announced a business restructuring roadmap for 2008 with new licensing agreements. TT&T plans to list its three flagship subsidiaries _ Triple T Broadband Co, TT&T Subscriber Services Co and Triple T GlobalNet Co _ on the Stock Exchange of Thailand and MAI next year to increase capital of at least two billion baht.

The strategy is aimed at increasing the group's revenue by 20% to 8.7 billion baht next year, and help the parent company earn a profit in 2009 after facing losses since 2003.

TT&T expects 7.3 billion baht in revenue this year with a declining loss. However, in the first nine months of this year the company reported a consolidated net loss of 1.4 billion baht. compared with a loss of 573 million in the same period last year.

President Prachuab Tantinond said TT&T was moving more into integrated internet services through the three licence-based subsidiaries, with planned investment of almost three billion baht next year in areas where TT&T fixed-line network uncovered.

The company would freeze all fresh investment and business activities in the core provincial fixed-line business to focus on services that entail lower costs under new licensing contracts.

TT&T also plans to invest in WiMax wireless broadband technology and third-generation (3G) once the National Telecommunications Commission (NTC) issues the next-generation broadband and mobile licences.

''The strategy is to shift away from overly high revenue-sharing payments for fixed-line services, which requires us to pay 43% of fixed-line revenue to TOT Plc _ by far the highest rates in the industry,'' Mr Prachuab said.

In comparison, he said, subsidiaries under the TT&T umbrella operating fixed and wireless broadband, voice-over Internet protocol (VoIP), IPTV, international internet gateway (IIG), international direct dialling (IDD) and data communications services pay 7% of their annual revenue under licences from the NTC. This includes a 3% licensing fee and a 4% universal service obligation (USO).

Prasitchai Kritsanayunyong, senior vice-president for corporate finance, said TT&T expected the proportion of its licence-based services to increase from 40% this year to 50% next year.
Triple T Subscriber Services would generate up to 3.7 billion baht and Triple T Global Net 560 million baht. The two firms are planned to list on MAI stock market next year.

Triple T Broadband, expected to list on the SET early 2008, is expected to generate revenue of between 1.5 billion and two billion baht next year with total broadband subscribers of 550,000, up from 300,000 by the end of this year. But the company did not consolidate revenue into the group as TT&T has only a 12.5% stake.

''Our regulatory fees now have been reduced to 30% of revenues compared with 40% last year,'' Mr Prasitchai said.

He admitted that TT&T would still face losses next year due to its high investment costs for broadband infrastructure, declining fixed-line revenue, a price war among mobile operators and TOT price-cutting on domestic long-distance call rates.

TT&T shares closed yesterday on the SET at 1.00 baht, down two satang, in trade worth 4.26 million baht.