Mobile operator Advanced Info Service (AIS) Plc, through subsidiary Advanced Wireless Network (AWN), has sealed a 10-year contract to rent 13,198 telecom towers from TOT Plc, in a deal touted as a win-win solution after years of legal wrangling over the tower concession by the two parties.
TOT president Monchai Noosong said his company stands to benefit from the contract because it will have a stable source of revenue from tower rental.
Entering the contract lets AWN enjoy long-term use of the towers in support of the company's telecom services, especially with a lower rental rate than stipulated under an earlier deal, Mr Monchai said.
Previously, AWN paid a tower service fee to TOT on a monthly lump-sum basis to the tune of 300 million baht since the end of the concession in 2015.
AIS operated 2G mobile service on the 900MHz band under TOT's 25-year concession, which expired in 2015.
The concession concerns a build-transfer-operate (BTO) condition, which means the concessionaire must gradually transfer the towers upon completion of construction to TOT before it can operate them.
Mr Monchai said AIS had transferred about 11,000 telecom towers to TOT up until 2014, when the company informed the state enterprise that it misunderstood the concession details and stopped transferring a further 2,000 towers to TOT.
The case was later thrown into arbitration proceedings in 2014 for a settlement.
As the concession ended in 2015 while the dispute was still unsettled, AWN entered a mutual agreement with TOT to temporarily use the state enterprise's towers with a monthly payment of 300 million baht.
AIS on Wednesday informed the Stock Exchange of Thailand that the company and TOT had agreed to settle the dispute in the arbitration hearings.
AWN agreed to use telecom towers from TOT, while TOT agreed to use space and maintenance services from AWN for 10 years, effective from January this year. The deal is worth 28 billion baht.
AIS chief executive Somchai Lertsutiwong said entering the contract lets both parties fairly capitalise on the towers in the long run.
Mr Monchai also expressed satisfaction over the deal.
"The dispute settlement is a win-win resolution for the both parties, and in line with the government's policy to settle the existing disputes between state enterprises and the private sector," he said.
According to Mr Monchai, apart from the 13,198 towers in the dispute, TOT has about 1,000 towers it has invested in. He went on to say that the tower rental contract would help TOT secure long-term revenue.
As of the first seven months this year, TOT had total revenue of 30 billion baht, more than 40% of it generated by fixed broadband service and 25% by fixed-line phone service.
TOT aims for total revenue of 52 billion baht in 2019 and a net profit of 2.4 billion baht, up from 2 billion baht in 2018.
Mr Monchai said TOT is still mired in legal disputes with several entities, including True Corporation, TT&T, Jasmine International Plc and the National Broadcasting and Telecommunications Commission.