CAT union files suit against DE Ministry

CAT union files suit against DE Ministry

CAT Telecom's labour union on Tuesday filed a lawsuit against the Digital Economy and Society (DE) Ministry in the Central Administrative Court to scrap the process of creating two new companies from CAT Telecom and TOT Plc.

CAT's union said the separation will weaken the operational functions of the two state telecom enterprises and may create damage in the future because of a lack of balance between market forces and public services.

Moreover, the process of splitting into two new companies conflicts with cabinet resolutions, said Sungvorn Poomtian, president of CAT Telecom's labour union.

"The existing procedure must be stopped to avoid uncontrollable losses in the future, including the process to transfer core assets from CAT and TOT to the two new companies," he said.

Mr Sungvorn said CAT's and TOT's labour unions have been urging the DE Ministry and the government for a year to scrap the process.

National Broadband Network (NBN) and Neutral Gateway & Data Centre (NGDC) split off from TOT and CAT after a cabinet order on June 13 last year, as proposed by the DE Ministry.

The companies' separation aims to create sustainable revenue in the long term through telecom assets and eliminate redundancy of investment.

NBN and NGDC began operations in Nov 1 last year, but separation of accounting transactions will be complete on April 1.

TOT and CAT Telecom hired Detecon as a consulting company for valuation of assets and operational transformation to the two new subsidiaries.

NBN, which was wholly owned by TOT, will own all domestic networks of TOT, including transmission and fibre-optic lines, and provide wholesale network capacity to TOT, CAT and private operators.

NGDC, which was wholly owned by CAT, will own CAT's submarine cables and data and supply wholesale international network capacity to CAT, TOT and private operators.

"The valuation of TOT's and CAT's assets and transfers are critical issues, including for projection of future revenue and returns, and the procedure has yet to create clarity of details to ensure transparency and benefits to TOT and CAT," Mr Sungvorn said.

He said the existing procedure also falls afoul of a cabinet resolution on Dec 4, 2007 related to legal practices for establishing a state enterprise subsidiary.

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