TOT3G looks on track for massive losses

TOT3G looks on track for massive losses

TECH

TOT3G Co, a subsidiary of the state-owned TOT Corporation, is under heavy scrutiny for failing to reach targets for financial performance and subscribers.

Information and Communication Technology Minister Anudith Nakornthap is due to meet with the TOT board today to discuss the problem.

The internet service unit is struggling financially under the weight of interest and penalties on its project loans due to its failure to meet certain targets tied to the expansion of third-generation (3G) broadband service.

TOT hopes to launch nationwide 3G commercial service from 5,200 base stations next month.

It was scheduled to launch the service last November, but the rollout was delayed after flooding affected construction of the network.

Gp Capt Anudith said revenue is out of line with the original targets, and the project needs adjustments to avoid further damage to TOT.

TOT3G now has nearly 300,000 subscribers through five companies acting as mobile virtual network operators contracted to market the service to end-users.

They are Samart i-Mobile, Loxley, IEC Technology, 365 Communication and M Consult.

Sources familiar with TOT3G said the unit's 16-billion-baht project loans call for the money to be disbursed based on the expansion pace of the 3G network and revenue growth.

But delays in the rollout have resulted in missed revenue and subscriber targets, resulting in added costs and penalties for TOT.

The parent also faces pressure from a law requiring it and its sister agency, CAT Telecom, to repatriate all concession-related revenue and services related to frequencies to the National Broadcasting and Telecommunications Commission after the law has been in effect for three years.

This condition means that from Dec 20, 2013, TOT will no longer be able to book concession revenue in its financial statement. This will have a massive impact on TOT, considering the 19 billion baht in concession revenue paid by Advanced Info Service last year.

TOT chairman Panthep Chamrasromran earlier said his company was looking for more partners to act as sales channels.

It is now applying its new virtual network operator model to non-mobile businesses too.

The state enterprise is considering conditions of new contracts for each business that needs partners to boost revenue.

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