TOT, AIS reach tentative deal on towers

AIS had long sought arbitration over what the ownership status of 13,000 towers would be after its concession with TOT expired, which it did at the end of September this year.

AIS had proposed a joint venture to manage the towers, but TOT insisted on AIS transferring these assets to the state telecom agency and leasing them back from it.

Montchai Noosong, acting |president of TOT, said on Wednesday that AIS had consented in principle to TOT’s proposal and that he hoped both sides could reach a conclusion on the matter this year.

Then AIS will have to hand over the disputed towers to TOT and withdraw the dispute from arbitration, he said in an update on the overall situation at a staff meeting this week.

An AIS source said the proposed network rent is just a short term solution to the dispute.

TOT is getting close to securing a partner for its third-generation cellular business on the 2.1-gigahertz spectrum this month, he said while declining to identify the potential partner.

TOT is reportedly in talks with AIS.

TOT has about 5,320 3G base stations nationwide that it set up at a cost of Bt20 billion, of which some Bt11 billion was financed by bank loans.

Montchai said the potential partner proposed to build 11,000 3G base stations for TOT to wholesale to interested companies.

The subsidiary of the potential partner plans to lease 80 per cent of the combined capacity of TOT’s existing base stations and the planned new base stations to offer a 3G cellular service.

This would earn more than Bt3 billion per year in rental income for TOT.

Creditors might believe that TOT will fail in the 3G business and some of its debt comes due this month, Montchai said.

If TOT can find a strong 3G partner this year, this might improve its situation in the eyes of creditors, he said.

TOT wants to launch an infrastructure fund investing in its cables late next year to finance the project to bury the cables nationwide. The fund is estimated to bring Bt1 billion to TOT per year.