The chief of Advanced Info Service Plc has broken his silence on the amendments of AIS's mobile prepaid revenue-sharing concession amid a flood of policy-based graft accusations.
The clarification by Somchai Lertsutiwong, chief executive of the country's largest mobile operator, comes after its concession owner, TOT Plc, yesterday notified AIS it would seek compensation of 70 billion baht for the amendments of its prepaid concession.
TOT took the move after a suggestion by Information and Communication Technology Minister Uttama Savanayana.
The cabinet also asked TOT to settle the concession issue before it expired today.
Mr Somchai urged TOT to decide its future and its standpoint instead of being afraid of a possible legal backlash from Section 157 of the Criminal Code for negligence of duty.
"I want to celebrate and make merit with TOT after running the business together with the state enterprise for 25 years instead of taking legal action against each other," he said.
AIS and TOT could join hands to promote the development of the country's digital economy, Mr Somchai said.
He said AIS's concession amendments came after similar ones by Total Access Communication Plc and True Move with their concession owner CAT Telecom.
The amendments also followed a suggestion by the Council of State in 2001 that TOT and AIS amend the prepaid concession, which it said would not require cabinet approval.
TOT, which granted a 25-year mobile concession to AIS in 1990, has amended the concession seven times, making changes such as extending the concession period to 25 years from 20 years and reducing the amount of prepaid revenue AIS must share with TOT.
The most significant amendment came in 2001 when TOT changed the revenue-sharing payments for prepaid services to a flat rate of 20% a month for the remainder of the concession compared with the original payments of 15% from 1991-95, 20% from 1996-2000, 25% from 2001-05 and 30% from 2006-15.
In February 2006, the Supreme Court confiscated assets from then-prime minister Thaksin Shinawatra after finding him guilty of abusing his power to benefit companies he owned.
The amendments to the AIS concession were cited.
Mr Somchai said AIS's prepaid concession amendments came under scrutiny during two different governments, but both governments set up legal panels that concluded there had been no damage from them and the amendments were legal.
"I dare say the concession agreement between AIS and TOT is considered the most successful in the Thai telecommunications industry, as we built the country's first cellular network nationwide for Thais and they had their first-ever experience with wireless service," Mr Somchai said.
He disclosed that TOT earned 240 billion baht in concession revenue over the 25-year concession life.
The state telecom also received telecommunication infrastructure assets worth 186 billion baht after the concession expired under the build-transfer-operate concession contract.
And the government also earned corporate income tax from AIS as well as individual income tax from 10,000 AIS employees.
Despite facing the prospect of several bitter legal battles, Mr Somchai insisted AIS still wanted to be a partner with TOT to help the state telecom grow their business together.
AIS has 16,000 2G base stations equipped with 15,000 telecom towers nationwide. The company wants to rent the towers from TOT after its concession expires to serve development of its commercial 3G and 4G services next year.
Mr Somchai said jointly managing the mobile towers would also generate rental revenue for TOT.
AIS would like to invest in a joint venture in exchange for a potential 49% share of ownership, while TOT might have to pay nothing for a 51% stake since it owns the towers, he said. Telecom towers could be rented to other telecom operators.
However, TOT plans to file a petition against AIS with the Administrative Court this week, seeking an interim injunction against AIS using the 16,000 base stations after the concession expires.
Mr Somchai said AIS also proposed to provide mobile services on the 2100-megahertz spectrum under the mobile virtual network operator model on behalf of TOT.
"TOT could earn at least 3 billion baht a month if the state enterprise selected us as a partner," he said, adding that TOT would shoulder interest and operating costs of 1.8 billion baht a year from the network investment.
Mr Somchai said AIS was a public company with both institutional and individual investors and not involved in politics.