Chaos in TOT-CAT overhaul attempt

Chaos in TOT-CAT overhaul attempt

Executives, unions and officials butt heads

Pichet: No collapse from restructuring
Pichet: No collapse from restructuring

The creation of two new companies from TOT Plc and CAT Telecom is creating havoc in the operations of the two state enterprises' management.

A high-ranking executive of TOT said branching off two new companies from TOT and CAT Telecom is not in accordance with the one-stop-service business of both companies.

"The splitting off of two new companies will effectively eliminate redundancy of investment between TOT and CAT," the executive said. "However, by separating into more than one company, clients cannot contact a single point for service."

The source said clients providing digital communication solutions to end-users may have to rent submarine cable capacity from CAT's subsidiary, rent a core network from TOT's subsidiary, and rent a last-mile network from TOT to provide service to households.

The government, through the Digital Economy and Society (DE) Ministry, has been moving the timeline to split the two new companies since last year. TOT is splitting off National Broadband Network Co (NBN), while CAT's new company will be called Neutral Gateway and Data Centre Co (NGDC).

Last week, CAT Telecom's labour union filed a lawsuit against the DE Ministry in the Central Administrative Court in a bid to scrap the two new companies.

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

DE Minister Pichet Durongkaveroj has urged CAT's union to be open-minded and aware of the rapidly-changing business ecosystem, saying that the separation of two new companies will generate sustainable revenue in the long term through their telecom assets and reduce investment redundancy.

Mr Pichet said the procedure of splitting two new companies will not weaken TOT and CAT, as both still have stakes in the two new companies.

In addition, the new structural changes will lead the two subsidiaries to reach new business opportunities and enable them to achieve healthier performances for their parent companies.

"TOT and CAT will not collapse from the procedure," Mr Pichet said.

He said businesses need development and transformation to handle rapid changes in business models and digital ecosystem.

An independent academic and telecom specialist, Anuparp Thiralarp, said TOT, CAT and their two new companies will all operate under two state-run organisational structures.

Mr Anuparp said it's hard to run the business based on practical decisions alone, as there is a dearth of flexible investment conditions and no decision-making procedure.

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