TOT Plc says it now expects to face a loss of 4 billion baht this year, a reversal of its earlier prediction of a profit of 4 billion.
The anticipated loss is due mainly to delays in settling the partnership deal with Advanced Info Service (AIS) to allow the country's largest mobile operator to provide mobile service on the state telecom enterprise's network, plus an early retirement campaign that will cost TOT 3 billion baht this year.
"Without AIS as a strategic partner for mobile service to add a new revenue stream for us, we are likely to face a loss of 4 billion baht this year," said TOT president Monchai Noosong.
This would stem from an expected operating loss of 1 billion baht plus the 3-billion-baht incentive offer to 1,300 TOT employees under an early retirement package this year.
TOT projected gaining 9.5 billion baht in additional revenue each from its deal with AIS, said Mr Monchai.
TOT's board approved AIS as a strategic partner to provide mobile service on TOT's 2100-megahertz spectrum on Nov 18, but a memorandum of understanding has not been signed.
Under a draft 10-year partnership deal, AIS would invest in a mobile network on the 2100MHz spectrum and would be allowed to rent up to 80% of TOT's network capacity until 2025.
The agreement also stipulates AIS must construct an additional 10,000 3G base stations nationwide for TOT.
AIS would have to pay TOT at least 4 billion baht a year for network rental.
The remaining 20% of network capacity would be reserved for TOT to provide its own wireless broadband to serve the poor.
TOT posted a loss of 480 million baht on revenue of 12.9 billion in the first half of 2016.
Broadband internet service contributed up to 45% of TOT's total revenue, followed by fixed-line telephone service with 30% and mobile service with 1.2%. The remainder came from mobile data communication services and others.
Mr Monchai said he still did not know exactly when TOT and AIS could enter into a formal partnership deal for mobile service.
TOT has only 200,000 3G subscribers, a sharp drop from 400,000 at the end of 2015, due to fierce competition.
Mr Monchai, however, said TOT expected to settle a network rental agreement with AIS by September, after AIS agreed to transfer its 13,198 2G base stations to TOT after its concession expired last September following a year of dispute.
AIS ran 2G mobile service on the 900MHz spectrum under a build-transfer-operate concession contract with TOT.
TOT plans to rent the 900MHz network to AIS subsidiary Advanced Wireless Network (AWN) to provide mobile service. AWN would have to pay TOT 3.6 billion baht a year for network rental.