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Dtac and CAT settle majority of concession disputes

Dtac and CAT settle majority of concession disputes

Thai operator dtac will pay state-owned CAT Telecom THB9.51 billion ($296 million) in a settlement that resolves most of the legal disputes that arose during their 27-year concession arrangement.

Two major disputes over excise tax and interconnection charges are not covered in the settlement, while litigation is still pending on some of the claims. These include CAT’s claim that dtac failed to comply with some of the concession’s terms relating to non-competition and a dispute over additional revenue sharing.

The board of Telenor-owned dtac, which is Thailand’s third-largest operator, has cleared the settlement. Once it receives shareholder approval, dtac will make the first payment of THB6.84 billion, with the agreement stipulating that the balance is to be paid once the pending cases are withdrawn.

While CAT has a pending claim over the concession that it could bring up in the future, dtac was able to state that its financial standing and liquidity will not be affected by the initial payment. The longstanding legal disputes between the two parties have been a constant source of worry for dtac, so the operator will be relieved to resolve most of the issues as it looks to grow its business.

Dtac saw both its revenues and market share fall during 2018, registering a net loss of THB921 million. This in itself was due to a dispute with CAT Telecom over tower ownership, which dtac settled by paying a one-off amortisation fee. Dtac will be looking to use its newly acquired 900MHz and 1800MHz to improve its fortunes going forward.

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