CAT & TOT

[Bruce551]

Korn takes swipe at CAT, TOT

Poor service, returns since partial sell-off

* Published: 11/11/2010 at 12:00 AM

http://www.bangkokpost.com/business/telecom/205771/korn-takes-swipe-at-cat-tot

TOT Plc and CAT Telecom have failed to provide efficient services and appropriate returns to the state since their partial privatisation, Finance Minister Korn Chatikavanij says.

Mr Korn sharply criticised the telecom agencies yesterday during the house debate on the much-delayed bill setting up the National Broadcasting and Telecommunications Commission.

The commission will regulate telecommunications and broadcasting.

The bill was passed yesterday on a vote of 228:2. The bill is based largely on the lower house's version of the draft, with some minor changes.

Mr Korn said he was frustrated with services provided by TOT and CAT. They hold on to the status of concession owners and frequency regulators even though they have now been partly privatised. "Why is the concession revenue still with them? Why don't we take this chance to fix it?" he said.

The approved bill provides for the agencies to be granted a three-year period, instead of one year as proposed in the original draft, to transfer concession revenue after deducting costs to the NBTC.

The money will then be forwarded to the state.

He said the Finance Ministry was willing to support their operations if the return of the money to the state affected their financial status.

Mr Korn said CAT earned 21 billion baht from concession fees in 2007 but handed over only 2 billion baht to the state.

The agency earned 23 billion baht in fees in 2008 but gave a return of 5.5 billion baht.

It returned only 3 billion baht in 2009 from a total of 21 billion baht.

"The return is just 15 to 20 per cent of income.

"What has CAT done for the public in the past three years?" he said.

This was unfair not only to their competitors but also to consumers, the minister said.

PM's Office Minister Sathit Wongnongtoey, a member of the joint House-Senate committee vetting the bill, said TOT and CAT were concerned about their finances.

The bill requires Senate approval before going for royal endorsement.

The Senate is expected to endorse it next Monday or no later than Nov 22. Selection of NBTC members can begin 180 days after royal endorsement.

Thai Broadcast Journalist Association president Wasant Paileeklee hailed the bill's passage. The bill will help allocate frequency resources that now rest in the hands of state agencies, he said.

[Admin_2]

a cat vs. a fart (µ´)?

I'd take the fart.

[Bruce551]

The final nail, not a new era

* Published: 1/12/2010 at 12:00 AM

* Newspaper section: Database

http://www.bangkokpost.com/tech/techscoop/208966/the-final-nail-not-a-new-era

As Thailand celebrates one year of ToT's 3G network, others will mourn the passing of the Frequency Allocation Act. Instead of marking the beginning of a new dawn in Thailand's telecommunications saga, the act marks the final nail in the coffin for our short-lived attempts to reform the telecommunications sector from a 90s-style state-run concession to a modern, deregulated licensed one.

Years of negotiations centred around article 84. Namely, the de-coupling of revenue share (a state domain asset) from the state owned enterprises, CAT and ToT. The draft that the house passed did that and called for the 2G revenue share to be severed from the SOEs and directed to the Ministry of Finance. However, at the senate level, the one-year grace period (for accounting purposes) was not only extended to three years, but worse, a provision was added that allowed SOEs to withhold "costs" and USO projects thereafter.

Having a high tax regime is fine if you like paying lots of money for basic services and it is funnelled into public services. The problem is that in Thailand's case, operators are paying crippling rents (25 percent - soon to be 30 - of revenue) not to the state, but to state-owned companies which use that money to compete with them or run ill-conceived USO projects, such as rolling out US-style CDMA as part of a rural coverage project in a village that already has a huge AIS mast in it.

As one industry consultant succinctly put it when I asked him for his reaction to the new frequency allocation act: "The hypocrisy is sometimes just too much for me.

"The CAT/ToT unions write a letter threatening to sue the Government for taking away the revenue sharing [which is not theirs in the first place], the PM gets scared and moves up the house vote on the Frequency Act, but just to make sure, extending the one-year revenue share grace period to three years. Idiot.

"As far as I can tell, he doesn't tell the only bright colleague he has, Korn. During the House vote, Korn stands up and argues against the move to extend the revenue share grace period [which is not theirs in the first place] and is shouted down by members of his own party [satit and Chuti], who clearly want to maintain and access to the revenue share pool of funds.

"And where is our fearless leader, the young, bright, principled reformist who believes in the rule of law? Nowhere to be seen.

(Poor Abhisit is drowning in Thailand's infinite pile of crap, the harder he tries, the deeper he sinks)

"Question: What happens if massive fund flows, which by all rights and logic belong to the state, are being funneled direct to PCLs, in total contravention of Thailand's obligations under the WTO?

"Answer. Do you take away the money? No! You change the law and legislate the continuation of anti-competitive behaviour and rent-seeking!"

He then suggested I emigrate to a saner land where my talent would be appreciated.

With the concession revenue share continuing, effectively forever, this means that CAT and ToT will have an interest in seeing commercial 3G licencing delayed as much as possible. It also opens up Thailand to the prospect of retaliatory tariffs by governments under the WTO framework.

Elsewhere, the circus continues in full-swing.

The fallout of the court ruling on the telecom excise tax case makes it questionable if any new contract can be signed between the incumbents (who cost the state lost revenue) and an SOE.

True is reported to be buying Hutch in order to offer 3G services. The question is, if True repurposes spectrum (from CDMA EV-DO to W-CDMA HSPA), is that a network upgrade or a new network?

If it is not an upgrade, then it contravenes article 46, which forbids transfer of frequency and does not fall under article 84, which grants an automatic licence for lawful, ongoing concerns, thus they risk losing the spectrum.

Not that the NTC could order them to relinquish it. This lame duck regulator has been hit with lawsuits left, right and centre and is now struggling to find an excuse for its existence now that it seems it does not have the right to auction 3G.

The senate is busy selecting a shortlist of six NTC commissioners to replace the three expired ones so it can go ahead and draft up a frequency master plan, reacting to the administrative court ruling that said the bid could not go ahead without one, never mind that such a plan was supposed to be drawn up in conjunction by both the the NTC and NBC. Is this to help the new NBTC hit the ground running (which is expected within a year), or to pre-empt its authority?

Then there is news of Dtac suing True for using its old analogue 1G AMPS spectrum for its huge commercial non-commercial 3G network. It is a non-commercial test network, but only paying commercial customers can take part in it.

In Thailand, is the only way to do business to just do it and then lobby the authorities later? Why does it matter? It matters because ultimately the consumer loses out in terms of services and businesses lose out in competitiveness and opportunities.

Without competition, there is no need to expand the network beyond areas with high revenues per user, and the rural poor suffer. People complain of lack of 3G, but Bangkok has at least four different 3G networks now. Uncertainty means service is bad and nobody dares invest in long-term marketing or value-added projects. How can anyone invest if contracts are annual and not renewed until the last minute?

Without competition, networks will be rolled out without the latest power-saving or quality of service features, meaning your smart phone battery will last much shorter than it could have and MVNOs cannot differentiate premium from general customers.

Neutrality and decoupling opens up the way to exciting new services such as Google TV, Hulu, Netflix or any of the popular games-console-based video services, or even cloud-based home surveillance such as Logitech Alert. None of these could take hold in Thailand without True or ToT's blessing and the former has its own TrueVisions business to care about first.

Ultimately the Thai way of doing things spills over and it becomes a global problem when a certain Thai telco ship nuclear centrifuge parts from Japan to North Korea in containers labelled telecommunications equipment.

The sad thing is that when all is said and done, nobody cares anymore.

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About the author

columnist

Writer: Don Sambandaraksa

Position: Database Reporter