CAT, TOT urged to seek collaboration

Information and Communica-tions Technology Minister Pornchai Rujiprapa has instructed TOT and CAT Telecom to seek a collaboration to operate their redundant submarine cable network and fibre-optic broadband Internet service as part of the ministry’s urgent measures to reduce their overlapped businesses and improve their financial performance.

The ministry has ordered the boards of both state agencies to discuss ways to jointly run all the redundant businesses, beginning with these two. They can either set up a joint venture to run the two services or collaborate to market them.

Pornchai said that the government wanted to solve TOT’s weak financial performance as soon as possible.

Recently, the State Enterprise Policy Commission, or "superboard", ordered TOT and CAT to conduct due diligence of their |six core business units and the process |was expected to take seven months to complete.

Pornchai met with the chairmen of TOT and CAT and representatives of the State Enterprise Policy Office last week to seek ways to improve the financial performance of both agencies.

He said that if they did not want to merge, they had to prove that they could stand on their own. One way to achieve this was through collaboration.

He said that despite TOT and CAT’s lack of marketing savvy, the government believed they could survive the market competition if they collaborated on the redundant areas. They could leverage their vast ICT networks to expand their market shares.

If they were not competitive in the cellular service field, they should focus on leasing their vast telecom networks to private operators.

CAT acting president Viroj Tochareonvanith said the company was ready to follow the ministry’s policy and join with TOT to operate the overlapped services.

Both agencies started trans-|ferring their private cellular-|service concession revenue, which had been their main revenue, to |the state coffers last December in line with the 2010 Frequency Allocation Law.

For the first half of this year, TOT reported a loss of Bt1.3 billion on Bt32.4 billion in revenue. Its revenue for the full year is expected to reach Bt57.6 billion, short of the targeted Bt64.4 billion. It is also expected to suffer a huge loss of Bt8.9 billion, more than the budgeted Bt5.1 billion. This year CAT is expected to earn Bt1.7 billion on Bt55 billion in revenue. For the first half of the year, it eked out a Bt602-million profit from Bt25.2 billion in revenue.