State to set up holding company

State to set up holding company

The government plans to create a National Backbone Holding Co to operate the country's telecommunications infrastructure as part of efforts to promote a digital economy.

Creating the holding company would be aimed at reducing redundancies in telecom network investment, which could result in lower service fees, said Pansak Siriruchatapong, one of eight members of the panel working on the digital economy policy.

"The establishment of a national backbone holding company needs to be settled after a national digital economy committee, chaired by Prime Minister Prayut Chan-o-cha, is set up by January," he said.

The number of fibre-optic lines of TOT Plc and CAT Telecom total 150,000 kilometres nationwide.

Combined with the lines of other telecom operators and the Electricity Generating Authority of Thailand, the country has 200,000 km of fibre-optic network.

Mr Pansak said Thailand had a strong fibre-optic backbone, but the last stretch connecting subscriber households only accounted for less than 10% of households or fewer than 2 million households.

He pointed out that at least 30,000 villages nationwide could not connect to the internet.

Information and Communication Technology Minister Pornchai Rujiprapa intends to double the country's internet penetration to 40 million users by 2017.

Mr Pansak said to achieve that goal, the country must promote both fixed-line and wireless broadband services including fourth-generation (4G) mobile broadband.

The National Backbone Holding Co would operate all existing telecommunications network assets and generate revenue from providing network rental services, he said.

Under the holding firm, two other companies would be set up — Telecom Tower Co and Fibre-Optic Network Co.

Mr Pansak, who also serves on the board at CAT Telecom, conceded that setting up a holding company might be an uphill task due to legal technicalities, saying local telecoms operated under a build-transfer-operate concession agreement.

To make a good start, CAT signed a memorandum of understanding with Total Access Communication (DTAC) yesterday for network sharing.

The two parties have jointly set up a working committee that is studying whether to set up a joint venture or an infrastructure fund.

Col Sanpachai Huvanandana, CAT's acting president, said the partnership agreement would pave the way for both companies' business collaboration.

"We're determined to play an important role in hard infrastructure under the digital economy policy," he said, adding that CAT's network assets were worth more than 50 billion baht, behind only TOT.

"We also plan to participate in the 4G licence auction, scheduled for mid-2015," Col Sanpachai said.

CAT expects a net profit of 1 billion baht on revenue of 49 billion this year, with revenue rising to 52 billion next year.

Sigve Brekke, DTAC's interim chief executive, said sharing the telecom infrastructure would play a crucial part in the development of the government's digital economy.

DTAC also expressed interested in renting CAT's fibre-optic network to provide fixed-based broadband services in the near future.

Mr Brekke also urged the National Broadcasting and Telecommunications Commission to allocate existing unused spectra for the 4G auction to ensure the country had sufficient spectra to support a national wireless broadband service.

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