Wednesday, January 09, 2008

DTAC plans to seek new licence from NTC


DTAC plans to seek new licence from NTC


Second-ranked mobile operator DTAC is quietly preparing to apply for a type-III operating licence as CAT Telecom might convert its build-transfer-operate (BTO) concession contracts into rental contracts.

The CAT concessionaire outlined a strategic plan to transfer its existing subscriber base to a new licence-operating subsidiary once it obtains a new licence from the National Telecommunications Commission (NTC).

DTAC CEO Sigve Brekke has voiced his support for the state telecom enterprise's rental proposal, saying it would be a win-win settlement between the company and TOT Plc on the ongoing access charge dispute.

''This [concession conversion] has been a major issue for Thai telecom firms for many years. The solution will be a milestone to create a fair and equal competition among operators,'' said Mr Brekke.

DTAC and third-ranked True Move stopped paying access charges to TOT in November 2006, and CAT planned to ceased access charge payments from its CDMA mobile phone service to TOT.

However, market leader Advanced Info Service (AIS) has also urged fair treatment for the company in case CAT Telecom's concession holders are allowed to convert to rental contracts.

Mr Brekke admitted that DTAC had talks with CAT over the conversion a couple months ago.

Under the rental proposal, he said, DTAC would immediately apply for a new licence with the NTC once CAT decided to convert concessions into rental contracts. Then the company would rent the network from the enterprise and pay a rental fee under a licensing agreement, instead of a revenue sharing-based concession.

Rental contracts could be renewed after the contract expires. The benefits from the rental contract would mean that access charges would vanish instantly because they would no longer be tied to concession contracts.

If TOT rejected the proposal and again brought the dispute to court, it would obtain only access charges incurred before the rental contracts became effective.

DTAC would need no additional investment on new networks as it could rent the network under the previous BTO-based contract.

But Mr Brekke said rental fees would be equal to the existing revenue sharing sum. ''This means the costs will include the rental fee plus licensing fee and universal service obligation (USO) fee,'' he said.

DTAC paid CAT 30% of total revenues, or 8.7 billion baht in 2007. The company's concession expires in 2018.

Mr Brekke said CAT would take advantage of rental conversion based on the grounds that when operators obtained 3G licences, they could route traffic among each other without passing through the networks of both CAT Telecom and TOT.

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