Wednesday, January 09, 2008

Samart lawsuit may resolve Thai Mobile row


Samart lawsuit may resolve Thai Mobile row


Samart Corporation's 2.65-billion-baht lawsuit against TOT Plc and CAT Telecom could finally resolve the longstanding dispute between the two state telecom enterprises over Thai Mobile.

Given the fact that CAT would be reluctant to absorb the damages if Samart wins the suit, it may speed up the long-delayed sale of its shares in the moribund cellular venture to TOT.

TOT board director Djit Laowattana said management notified the board about the lawsuit brought over the weekend against TOT and CAT by Samart's subsidiary, Samart I-mobile. Samart is seeking 2.65 billion baht in overdue bills and damages.

After Samart filed the suit, CAT president Phisal Jorpocha-udom approached his TOT counterpart informally to say that CAT was rethinking the sale of its 42% stake in Thai Mobile because CAT did not want to be on the losing end of a lawsuit, Mr Djit said.

But Col Natee Sukolrat, the TOT board spokesman, said TOT did not respond to CAT's approach because it felt that the dispute was the shared responsibility of both agencies.

However, the board felt the case might expedite Thai Mobile's shareholding revamp after TOT failed to convince CAT to sell its stake for 2.4 billion baht.

Earlier CAT was reluctant to sell its holding because it wanted Thai Mobile's rights to use the 1900 MHz frequency range, which was reserved for third-generation mobile phone service.

Thai Mobile has six billion baht in debt and only 70,000 customers in a market of 52 million. The business has suffered from disagreements between TOT and CAT over control.

Col Natee said he met Samart president Watchai Wilailuck recently, who explained that Samart's court case was purely to assert the company's rights. Samart did not want to cause a conflict with the two state telecoms, he said.

CAT has been increasingly unwilling to absorb losses from Thai Mobile, which has 64 million baht a month in expenditures against revenue of merely three million baht.

The court case brought by Samart might serve as a catalyst to settle the share sale more quickly, Col Natee said.

Since 2002, Samart I-Mobile has been contracted by Thai Mobile to operate call centres, customer service, billing and marketing. The value of the contracts is 1.8 billion baht.

The contracts for call centres, customer service and marketing expired in October, while the billing agreement is set to expire in two years. But Samart stopped providing all services for Thai Mobile in June after the latter failed to pay bills since 2005. Thai Mobile had paid Samart 800 million baht earlier.

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