TOT board to scrutinise three projects

Bidding processes appear to be tainted

KOMSAN TORTERMVASANA

The board of TOT Plc has given management until the middle of this year to take action against former directors and executives responsible for three projects that are believed to have damaged the state enterprise's business.

Director Djit Laowattana said the board has singled out for attention a costly and flawed billing system, the moribund Thai Mobile cellular venture, and the contract to supply 565,000 new fixed-line numbers.

The billing system has been especially problematic. TOT signed a five-year deal worth 1.2 billion baht to lease the system from Telemetics in October 2003. Under the contract, TOT is to pay 19 million baht a month to Telemetics, whose shareholders include some ex-TOT executives.

The system was supposed to allow TOT to classify customers according to their phone-usage patterns so that it could better serve their needs.

But the system has been flawed ever since it began operating in April 2005. Problems have included billing errors and unmatched call data records (CDR) that involved more than 70,000 numbers.

Telemetics, meanwhile, encountered serious financial rouble and was unable to help TOT fix the problems or create a backup system. The National Counter Corruption Committee is currently investi gating allegations of corruption and irregularities in regard to the case.

Mr Djit said that Telemetics was nothing more than a paper company or a broker in bidding for the TOT project. Project implementation was in fact handled by System Adviser Group (SAG), a major shareholder in Telemetics.

An earlier investigation showed that one of the major shareholders in SAG was part of the team that drafted the terms of reference for the billing system.

The board wants answers about the project by next month, said Mr Djit.

The second project, involving 565,000 new telephone numbers, is well behind schedule. The bid winners, Ericsson and Siemens, were supposed to have completed their work by August 2006.

Thai Mobile, meanwhile, has accumulated losses of three billion baht and has only 80,000 customers in a market of 40 million cellular users.

Thai Mobile has to pay 30 million baht a month to Samart Plc to handle billing under a five-year contract.

''The status of Thai Mobile today is overexpenditure, an increasing accumulated loss, an unclear business plan, an the unknown future of the 3G mobile system,'' said Mr Djit.

Thai Mobile's growth has also been stunted by five years of bureaucratic infighting between TOT and CAT Telecom, its erstwhile partner in the venture. CAT has agreed in principle to sell its holding to give TOT a free hand in running the business, but the two sides cannot agree on a price.

Bangkok Post

Monday April 09, 2007