Decision Likely Today On Claims Against Thailand's Three Mobile-Phone Operators

[webfact]

Decision likely today on claims against telecos

By Usanee Mongkolporn

The Nation

Cabinet OK sought over government move to get billions in compensation

The Cabinet is expected to make a crucial decision today on multibillion-baht compensation claims against the country's three mobile-phone operators, including Advanced Info Service, the biggest, whose potential liabilities could top Bt75 billion.

Information and Communi-cations Technology Minister Chuti Krairiksh is expected to seek Cabinet approval to resolve the compensation issues by setting up separate committees to negotiate with each of the three concession holders.

Total Access Communication (DTAC) and TrueMove will also face compensation claims, but the amounts are likely to be much smaller than what AIS is facing.

Ahead of the Cabinet meeting, top executives of Singapore Telecom (SingTel), a major shareholder of AIS, will reportedly meet with Prime Minister Abhisit Vejjajiva, who has just returned from the World Economic Forum in Switzerland.

AIS is majority-owned by Shin Corp, which is controlled by Temasek Holding Group of Singapore. SingTel, which is affiliated to Temasek, holds a 20-per-cent stake in AIS.

Industry sources said the Singaporean investors had mounted a strong lobbying effort on the compensation and related issues, as the claim AIS is facing is huge and its 30-million-plus customer base in Thailand is now at stake.

It remains unclear whether the Cabinet will give Chuti its full backing to tackle the AIS issue, especially as far as coalition parties in the Democrat-led government are concerned. Chuti is a key figure in the Democrat Party.

A Government House source yesterday said the ICT Ministry would not turn to arbitration to resolve the compensation claims and other issues.

This is largely because the Supreme Court has already ruled that fugitive ex-prime minister Thaksin Shinawatra had abused his powers while in office to benefit Shin Corp and AIS, formerly owned by Thaksin and his family.

The wrongdoings included illegal amendments of the concession contract between AIS and state-owned TOT, resulting in the loss of state benefits.

The majority stake in Shin Corp was sold by Thaksin and his family to Temasek in 2006.

Besides tomorrow's meeting with Abhisit, top officials from SingTel also met with Finance Minister Korn Chatikavanij and Chuti early last month.

Areepong Bhoocha-oom, the Finance Ministry permanent secretary and TOT chairman, said earlier that TOT had notified AIS of its demands for damages deriving from concession amendments and the levy of telecom excise duty.

TOT is demanding payment of Bt73 billion, plus annual interest of 7.5 per cent, by February 15, or it will take the case to court.

However, AIS is adamant that it will not pay the compensation, as the company believes it has done nothing wrong.

The company yesterday told the Stock Exchange of Thailand that it had not yet received official TOT notification over the damages claim.

Of the damages, Bt30 billion is alleged to have resulted from the telecom excise duty imposed by the Thaksin government in 2003. The remainder derives from the sixth and seventh amendments to AIS's concessions.

TOT has already taken the excise issue to an arbitration panel. The excise rates were reduced to zero by the Surayud Chulanont government in 2007.

Regarding the sixth concession amendment, made on May 15, 2001, TOT reduced AIS's prepaid-service revenue share with TOT from 25 per cent to a flat 20 per cent, starting from June 2001 and applying until the end of the concession period in 2015.

Originally, AIS had to share prepaid revenue with TOT at an incremental rate of 15 per cent from 1991 to 1995, 20 per cent from 1996 to 2000, 25 per cent from 2001 to 2005 and 30 per cent from 2006 to 2015.

Under the seventh concession amendment on September 20, 2002, TOT allowed AIS to roam other networks and deduct the roaming expenses from gross revenue before paying the concession fee to TOT. This was effective from October 1, 2001.

-- The Nation 2011-02-01

[gosompoi]

I think TOT ran a jetski rental business the past.

[wackysleet]

I think TOT ran a jetski rental business the past.

It will be interesting to see where any compensation money eventually ends up, but just a suggestion that they {TOT} consider bringing their antiquated communications system {I use that term in a jocular way} into the 21st century but that possible windfall is more likely to be spent on administration

[animatic]

The malfeasances happen while Thaksin was in office, in court they are considered proved. It doesn't matter who owns the 'legal entity' AIS now, the acts that benefited AIS still occurred, so compensation is still due.

So the issue is now how much must they return. It doesn't necessarily mean AIS goes under, timed payments can be worked out. Temasek should have done better due diligence about what their potential liabilities could be worst case, and apparently didn't do this adequately.

Edited February 1, 2011 by animatic

[jaltsc]

TOT didn't seem to be complaining when they overcharged me 3,000 THB. I had the receipts that I paid, but they said they go with what is in their computers. Let's see....I pay my monthly bill, employee pockets the money, doesn't record it in the computer...I still owe the money. Then they tell me that, YES...my receipts are valid, but I would have to still pay the money, and then ask for a refund. No, not by phone, but by traveling to their district office...a 3 hour trip. It was time to cut my losses. Moved to another provider. Absolutely no problems with billing in 18 months.

TOT should be the last ones to complain. Maybe they are just jealous that AIS is better at their own game.

[NCFC]

The malfeasances happen while Thaksin was in office, in court they are considered proved. It doesn't matter who owns the 'legal entity' AIS now, the acts that benefited AIS still occurred, so compensation is still due.

So the issue is now how much must they return. It doesn't necessarily mean AIS goes under, timed payments can be worked out. Temasek should have done better due diligence about what their potential liabilities could be worst case, and apparently didn't do this adequately.

I would think TOT were fully aware of what they were agreeing to, and signed legally binding paperwork at that time. When you make an agreement you should feel bound to abide by that agreement, do you not think?

[Thailand]

Perhaps TOT want to make sure that AIS do not have the funds come the 3G auction so are trying to tie them up in litigation?

[wackysleet]

Perhaps TOT want to make sure that AIS do not have the funds come the 3G auction so are trying to tie them up in litigation?

Surely your not implying that a government owned company such as TOT would do something like that, and whats with CAT and True upto with their little deal on 3G, as I understood it there were only two licences available and TOT were tied to a contract with CAT to provide 2G which of course the records show from posters on here that they made a pigs ear of that so what is in store for us when the powers to be somehow wangle it that they are a 3G provider.

[Chang_paarp]

Looks like the folk who bought AIS from the Thaksin family believed them when they said everything was above board and "the boss" would make sure they had no problems. Now there is a court verdict that "the Boss" broke the rules by changing the rate of royalty and some people believe the money is due to be paid by AIS to TOT. AIS are saying it was before my shift and TOT are saying the debt is still due plus interest. If DTAC wants to put a nail into AIS they should pay TOT and make sure everyone knows it is a precitant.