Thailand's telecommunications boondoggle?
By Jon Fernquest
Are Thailand's state telecom enterprises TOT
and CAT doomed? The two giants might die immediately if new 3G licenses were issued and telephone companies stopped paying them the huge 30% of revenue fee (for doing essentially nothing).
Bangkok Post reporter Don Sambansaraksa explains:
The
other day I came across someone who gave me yet another perspective on
the 3G
situation in Thailand (or lack, thereof) and why it seems to be
in the interests of the
powers that be to delay 3G as long as possible
so that while businesses, the economy and techy geeks like us
suffer
and wait in purgatory
for the (data) gates to open, a small minority of
us are kept happy.
No, that small minority is not the shareholders of certain telcos, but rather then 20,000 odd employees of TOT and CAT which would probably find themselves out of a job if the 2.1GHz 3G licences are issued. This is because under the status quo, 30% of all revenue from the telcos goes either to TOT (AIS) or CAT (Dtac, True and Hutch). That is 30% of revenues, not profits, mind you.
Thus, the day the National Telecommunications Commission issues the 2.1GHz licences, that will be the death certificate for TOT and CAT as the telcos will quickly do everything they can to migrate from the current 900/1,800MHz concessions to 2.1GHz so that they can stop paying the concession fee, if for no other reason. (Source: Bangkok Post, database, 24-12-08,Can new government sort out Thai 3G?, DON SAMBANSARAKSA, link)
(See photo of CAT building in the Chao Phraya on right)
No, that small minority is not the shareholders of certain telcos, but rather then 20,000 odd employees of TOT and CAT which would probably find themselves out of a job if the 2.1GHz 3G licences are issued. This is because under the status quo, 30% of all revenue from the telcos goes either to TOT (AIS) or CAT (Dtac, True and Hutch). That is 30% of revenues, not profits, mind you.
Thus, the day the National Telecommunications Commission issues the 2.1GHz licences, that will be the death certificate for TOT and CAT as the telcos will quickly do everything they can to migrate from the current 900/1,800MHz concessions to 2.1GHz so that they can stop paying the concession fee, if for no other reason. (Source: Bangkok Post, database, 24-12-08,Can new government sort out Thai 3G?, DON SAMBANSARAKSA, link)
(See photo of CAT building in the Chao Phraya on right)
a boondoggle - when
an official project wastes a lot of time and money and doesn't achieve
anything
an enterprise - a company
a state enterprise - a government owned company
a telecom - a telecommunications company
TOT - a Thai state-owned telecommunications company. Originally established in 1954 and corporatized in 2002, TOT used to be known as the Telephone Organization of Thailand and TOT Corporation Public Company Limited. TOT's main line of business is fixed line telephony, although it has several other businesses, including mobile telephony. (See Wikipedia)
CAT Telecom - CAT Telecom Public Company Limited is the Thai state-owned telecommunications company that owns Thailand’s international telecommunications infrastructure including its international gateways, satellite and submarine cable networks connections. Until recently, CAT had a monopoly on international telephony and CDMA mobile telephony. CAT partners with sister state-enterprise TOT to provide a GSM mobile service and with Hutchison to provide a CDMA mobile service. Corporatized in July 2003, CAT Telecom used to be known as the Communications Authority of Thailand (See Wikipedia)
doomed - certain to fail or be destroyed
a perspective - one viewpoint, one opinion about issues
3G - third generation mobile phone, the next level of mobile phone services beyond the current second generation (2G), supports broadband internet, supports greater numbers of voice and data customers especially in urban areas (See Wikipedia on 3G)
X in the interests of Y - Y will benefit if X happens
the powers that be - the people currently in power
techy geeks - people who are very involved with technology and computers (which other people find boring)
20,000 odd employees - around 20,000 employees
out of a job - no longer have a job anymore (because your company no longer exists, for example)
licenses are issued - official permission is given to use something (here use of spectrum)
status quo - the usual situation and also current situation
National Telecommunications Commission (NTC) - the first independent state telecommunications regulator in Thailand, regulates all telecommunications services, formulates a master plan, sets criteria and categories of telecommunications services, permits and regulates the use of spectrum for telecommunications services and grants licenses to telecommunications operators (See website and policy)
X will be the death certificate for Y - X will cause Y to die (cease to exist)
migrate - move from using one system to another
concessions - official permission from the government to do a certain type of business
a concession fee - money paid to the government for a concession
an enterprise - a company
a state enterprise - a government owned company
a telecom - a telecommunications company
TOT - a Thai state-owned telecommunications company. Originally established in 1954 and corporatized in 2002, TOT used to be known as the Telephone Organization of Thailand and TOT Corporation Public Company Limited. TOT's main line of business is fixed line telephony, although it has several other businesses, including mobile telephony. (See Wikipedia)
CAT Telecom - CAT Telecom Public Company Limited is the Thai state-owned telecommunications company that owns Thailand’s international telecommunications infrastructure including its international gateways, satellite and submarine cable networks connections. Until recently, CAT had a monopoly on international telephony and CDMA mobile telephony. CAT partners with sister state-enterprise TOT to provide a GSM mobile service and with Hutchison to provide a CDMA mobile service. Corporatized in July 2003, CAT Telecom used to be known as the Communications Authority of Thailand (See Wikipedia)
doomed - certain to fail or be destroyed
a perspective - one viewpoint, one opinion about issues
3G - third generation mobile phone, the next level of mobile phone services beyond the current second generation (2G), supports broadband internet, supports greater numbers of voice and data customers especially in urban areas (See Wikipedia on 3G)
X in the interests of Y - Y will benefit if X happens
the powers that be - the people currently in power
techy geeks - people who are very involved with technology and computers (which other people find boring)
20,000 odd employees - around 20,000 employees
out of a job - no longer have a job anymore (because your company no longer exists, for example)
licenses are issued - official permission is given to use something (here use of spectrum)
status quo - the usual situation and also current situation
National Telecommunications Commission (NTC) - the first independent state telecommunications regulator in Thailand, regulates all telecommunications services, formulates a master plan, sets criteria and categories of telecommunications services, permits and regulates the use of spectrum for telecommunications services and grants licenses to telecommunications operators (See website and policy)
X will be the death certificate for Y - X will cause Y to die (cease to exist)
migrate - move from using one system to another
concessions - official permission from the government to do a certain type of business
a concession fee - money paid to the government for a concession
The new ICT Minister, a former nurse with limited experience in the ICT industry, has a daunting task ahead of her:
...The official said the
minister had three challenging
tasks
awaiting her: improving the financial
status of the state telecom
enterprises TOT Plc and CAT Telecom; getting the frequency allocation
law passed; and co-ordinating
with the National Telecommunications
Commission (NTC) to issue licences for third-generation (3G) services.
He said that TOT and CAT needed urgent remedies at a time when they faced declining revenue but higher operating costs.
TOT's revenue grew slightly to 53.5 billion baht in the first nine months of last year from 52.7 billion a year earlier, while CAT's revenues rose 5% to 36.5 billion baht in the same period.
However, he said, if revenues from concessions were excluded, both state telecoms would show losses from operations.
He said that TOT and CAT continued to face difficulties from three interest groups that play very active roles in influencing their operations. They are the boards of directors, management executives, and influential unions.
TOT has three major projects that have not yet got off the ground - an IP (Internet Protocol) Core project worth 4.7 billion baht, a broadband venture worth 3.6 billion, and a third-generation (3G) network worth 29 billion baht.
The second challenging task is the frequency allocation legislation which has been forwarded to Parliament for debate but is strongly opposed by academics and the private sector, particularly because there is no public hearing.
TOT's 3G mobile phone project also needs attention as it will be costly and it is not certain whether the state telecom enterprise can obtain a good return.
At present TOT is still awaiting the official transfer of the spectrum and rights from CAT to meet the NTC regulations.
He said that TOT and CAT needed urgent remedies at a time when they faced declining revenue but higher operating costs.
TOT's revenue grew slightly to 53.5 billion baht in the first nine months of last year from 52.7 billion a year earlier, while CAT's revenues rose 5% to 36.5 billion baht in the same period.
However, he said, if revenues from concessions were excluded, both state telecoms would show losses from operations.
ICT - Information
and
Communications Technologies, the topic of computer-based information
systems, particularly software applications and computer hardware (See Wikipedia)
daunting - difficult to deal with or do
a task - work to be done (part of a larger project)
challenging tasks - work that requires great effort
status - the situation at a particular time
financial status - the financial situation of a company, the condition and health of the company's assets, liabilities and debt, revenues, and expenses
frequencies, spectrum - parts of the limited electromagnetic spectrum that is used for radio, mobile phones, and TV broadcasting
allocation - dividing up something and giving it to people
frequency allocation bills - laws that divide the limited spectrum and give it to different companies and uses
excluded - not included
daunting - difficult to deal with or do
a task - work to be done (part of a larger project)
challenging tasks - work that requires great effort
status - the situation at a particular time
financial status - the financial situation of a company, the condition and health of the company's assets, liabilities and debt, revenues, and expenses
frequencies, spectrum - parts of the limited electromagnetic spectrum that is used for radio, mobile phones, and TV broadcasting
allocation - dividing up something and giving it to people
frequency allocation bills - laws that divide the limited spectrum and give it to different companies and uses
excluded - not included
He said that TOT and CAT continued to face difficulties from three interest groups that play very active roles in influencing their operations. They are the boards of directors, management executives, and influential unions.
TOT has three major projects that have not yet got off the ground - an IP (Internet Protocol) Core project worth 4.7 billion baht, a broadband venture worth 3.6 billion, and a third-generation (3G) network worth 29 billion baht.
an interest group - a
group of people who join together to put pressure on the government to
do certain things
boards of directors - the highest group of people in a corporation who make high-level policy for a company (See Wikipedia)
influential - can change what large numbers of people do or think
unions - an organisation for the employees of companies that tries to gain better pay and benefits (health insurance, retirement, etc) for them
got off the ground - (like an airplane taking off) were started and were operating
IP (Internet Protocol) - the computer network technology that makes the internet possible (See Wikipedia)
broadband - the most common high-speed data transmission used for high-speed Internet access, fast enough to support applications such as streaming video (See Wikipedia)
a venture - a business project (with a limited scope and focus)
boards of directors - the highest group of people in a corporation who make high-level policy for a company (See Wikipedia)
influential - can change what large numbers of people do or think
unions - an organisation for the employees of companies that tries to gain better pay and benefits (health insurance, retirement, etc) for them
got off the ground - (like an airplane taking off) were started and were operating
IP (Internet Protocol) - the computer network technology that makes the internet possible (See Wikipedia)
broadband - the most common high-speed data transmission used for high-speed Internet access, fast enough to support applications such as streaming video (See Wikipedia)
a venture - a business project (with a limited scope and focus)
The second challenging task is the frequency allocation legislation which has been forwarded to Parliament for debate but is strongly opposed by academics and the private sector, particularly because there is no public hearing.
TOT's 3G mobile phone project also needs attention as it will be costly and it is not certain whether the state telecom enterprise can obtain a good return.
At present TOT is still awaiting the official transfer of the spectrum and rights from CAT to meet the NTC regulations.
the public - all the
people (not a limited private group)
a public hearing - a public meeting were ordinary people can express their opinion on important laws and policies
transfer from X to Y - taking from X and giving to Y
a public hearing - a public meeting were ordinary people can express their opinion on important laws and policies
transfer from X to Y - taking from X and giving to Y
