TOT Plc will provide a mobile payment service to capitalise on the proliferation of smartphone users and credit card holders.
The goal is to create a sustainable new revenue stream.
The state telecom, through subsidiary ACT Mobile Co, will launch the electronic payment service Just Pay by next March, targeting public services.
TOT president Yongyuth Wattanasin said Just Pay is specially designed to serve future shifts in customer behaviour.
The information and communication technology minister wants TOT to become a "national network provider" and "national mobile payment gateway" to create a new revenue stream to offset vanishing concession revenue.
TOT is facing the imminent end of its three private telecom concessions held by Advanced Info Service (AIS) for mobile service and True Corporation and TT&T for fixed lines.
AIS, whose concession will expire in 2015, contributes 20 billion baht to TOT each year.
TOT will not be able to book all concession-related revenue into its financial statements as their own after next month, in line with the Frequency Allocation Act of 2010.
Apirak Preechayasomboon, ACT Mobile's acting chief executive, said his company will provide a full-function mobile payment solution serving all digital devices including PCs, smartphones, tablets, printers and card readers.
TOT's Just Pay app will provide three service categories _ mobile wallet, mobile point of sale and mobile information management and online statistics reports, he said.
Mobile wallet will allow customers with Android-based smartphones to pay utility bills and access other products and services.
Mobile point of sale will enable consumers to use debit and credit cards to pay retailers that use TOT's iOS app platform.
It will also facilitate retailers' expansion of their customer base and sales.
Mobile information management will allow retailers to manage and access real-time online statistical reports on government websites for efficient management of their accounting.
Mr Apirak said his company is in talks with several commercial banks for joint provision of its mobile payment service.
"We're confident our mobile payment service will generate core revenue for us in the near future, while TOT's core revenue will come from network rental service fees," he said.
Mr Apirak said he believes mobile payments will be the next big trend in telecommunications thanks to rapidly changing consumer behaviour.
At present, 18.3 million credit card holders spend 1.2 trillion baht per year, he said
ACT Mobile was established nine years ago, initially to provide TOT's third-generation (3G) trial service on the 2100-megahertz spectrum with 500 base stations under the Thai Mobile brand.
But TOT now provides 3G service itself on 5,320 base stations.
The parent firm pays ACT Mobile 200 million baht a year as a 3G network rental fee in exchange for the use of the 500 3G base stations.