The two telecom state enterprises must seriously reform themselves into a network sharing provider by aggregating telecom assets and developing an infrastructure pool to generate a new revenue stream after the end of the concession era, says the ICT Minister.
TOT Plc and CAT Telecom were assigned to study the feasibility of establishing a joint venture for implementing two projects -- international submarine cables and nationwide underground fibre-optic lines -- to serve the government's digital economy policy.
The enterprises must sustain growth by operating telecom services that serve the digital economy policy, but their ailing financial status means they must be selective in their investment, ICT Minister Uttama Savanayana told Bangkok Post after almost two months in office.
"When I was approached for the position, I was pleased to take responsibility and push for the transition to a digital economy. It's very important to drive the country to become a digital infrastructure hub in Asean," he said.
This is challenging work because the ICT sector will develop rapidly in line with global trends, while the telecom sector will completely change from a concession to a licensing regime in the next few years, said Mr Uttama.
He graduated with a bachelor's degree in electrical engineering in 1982 from Brown University in the US, a master's in finance & international business in 1984 from Kellogg School of Management at Northwestern University and a doctorate in management in 1990 from University of Massachusetts Amherst.
Another challenge is to aggregate telecom assets to share them for the optimum benefit of the country, including reallocating and managing spectrum, he said.
"Many foreign investment funds are waiting to see a clear transition because ICT development will provide significant infrastructure for all business activities under an internet-based society," said Mr Uttama.
He wants TOT and CAT to share telecom infrastructure by developing their existing assets and investing more in submarine cables and above-ground and underground fibre-optic lines to develop a full-scale digital infrastructure.
"The role of infrastructure-sharing provider may generate a low profit margin but this is allowed as a state enterprise. Other state business units should operate alongside private companies under a strategic partnership model," said Mr Uttama.
TOT and CAT must not compete in areas where they lack marketing skill and flexible decision management. In fact, they should join hands with partners, he said.
Both TOT and CAT are operating under rehabilitation plans as ordered by the State Enterprises Policy Commission (superboard).
They own abundant telecom assets that could be used to develop an infrastructure-sharing business to serve the digital economy policy.
TOT owns 13,198 base stations from its 2G mobile concession holder Advanced Info Service (AIS), 5,320 base stations from its own 3G network first phase and 300,000 telecom poles throughout the country.
The 2G mobile service concession expired on Sept 30.
CAT owns 12,000 base stations from its 2G mobile concession holder Total Access Communication (DTAC), 8,000 base stations from True Move and 200 from Digital Phone Company (DPC).
The 2G concession of True Move and DPC expired in 2013, while the DTAC concession will end in 2018.
Under the 2G concessions, private companies must transfer telecom assets to the concession owners under the build-transfer-operate conditions. But no 2G mobile operator has transferred telecom assets to their concessions owners yet.
Mr Uttama said TOT and CAT are now in negotiations to end the bitter decade-long network transfer disputes with their 2G mobile concession holders in a bid to create telecom tower companies.
The CAT board approved in principle a draft to set up a joint telecom tower company with DTAC, but DTAC must end it dispute and transfer 2G assets to CAT. DTAC would rent CAT's network to provide service.
The proposed joint venture between CAT and DTAC is under consideration by the superboard.
True Move is negotiating with CAT, but TOT and AIS have yet to reach an agreement over the latter's 13,198 telecom towers under TOT's 2G network.
Mr Uttama said CAT also owns six submarine cables and TOT owns two. In comparison, Singapore has 20 submarine cables and Malaysia 12.
"Thailand's geographic location makes it an appropriate digital infrastructure hub for Asean, which the country can achieve by 2020. Both TOT and CAT must invest in more submarine cables to serve this goal," he said.
The government needs to develop both hard and soft infrastructures nationwide to persuade global tech firms to invest in the country's ICT infrastructure development projects, the ICT Minister said.
Hard infrastructure covers a national broadband network, national broadcast facilities, satellites, spectrum frequency management, an international internet gateway and submarine cables. Soft infrastructure involves data security protection, updated internet laws, an e-transaction platform, cybersecurity measures and human resource development.
The country needs investments from global tech giants such as Google, Facebook, Amazon and Apple to help promote the country as a digital infrastructure hub, said Mr Uttama.
There are 15 flagship projects over a three-month period that the ministry needs to accelerate as part of government policy. The projects fall into five categories: telecom infrastructure, electronic services for SMEs, government information, cybersecurity and smart cities.
The ICT Ministry earlier ordered the 10 state agencies that report to it to propose flagship projects. Each agency proposed two, with the ministry selecting 15.