PwC to study CAT, TOT broadband merger
STATE telecom agency TOT has awarded a contract to PwC Thailand for it to be a consultant studying the planned merger of its broadband business with that of CAT Telecom.
The merged entity will be named National Broadband Network Co (NBN). TOT president Montchai Noosong said the value of the consultancy contract was around Bt20 million. The merger is in line with an order by the State Enterprise Policy Commission that the two state agencies merge their broadband businesses, which will have an estimated asset value of Bt15 billion after consolidation.
The commission also ordered them to merge their Internet gateway and submarine-cable networks to become Neutral Gateway Network Co (NGN) – with an estimated asset value of Bt5 billion after consolidation – while their combined Internet data centres will become IDC Co.
TOT is taking the lead in establishing NBN, while CAT is taking charge of forming NGN and IDC Co.
The consultant will have to finish the first-phase study of the broadband-business merger by the end of January, Montchai said, adding that it would come up with a model for NBN and its share ownership, and for how the new entity would survive.
TOT’s chief said his state agency also had to seek additional new sources of revenue.
TOT is in a partnership with Advanced Wireless Network – a subsidiary of Advanced Info Service – to provide 3G service on the state agency’s 2.1GHz spectrum.
Last month, they started a joint service offering on a commercial-trial basis for six months.
TOT will receive net revenue of Bt325 million a month – Bt3.9 billion a year – if both parties sign an official contract for the partnership.
Montchai said TOT was currently drawing up the final draft of the official contract, which it expected to complete within five months.
Meanwhile, the state agency has reduced the cost of its overall equipment procurement by around 20 per cent, which will help improve its financial performance, he added.
This year, TOT is expected to suffer an overall loss of around Bt10 billion. During the first half, it recorded consolidated revenue of Bt12.45 billion, well below the target of Bt18.13 billion.
Mobile-phone business showed a sharp decline from the targeted level of Bt2.8 billion, coming in at only Bt144 million, while telecom-infrastructure business generated Bt280 million against a target of Bt350 million. Telecom-pole business in the period was also disappointing, at Bt198 million compared with a target of Bt1.68 billion.
