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State-owned Thai operator demanding back payment of access charges

Several private-owned operators in Thailand have received a large bill from none other than TOT, the country’s state-owned operator. TOT is attempting to charge five companies a total of THB214.7 billion (US$7 billion), demanding THB36.4 billion from True Corp, THB97 billion from DTAC, THB700 million from TT&T, THB76.4 billion from AIS, and THB4.2 billion from fellow state-run firm, CAT Telecom.

Thai Prime Minister Abhisit Vejjajiva stated that the Thai Information and Technology Ministry has recorded these claims and will conduct negotiations with all the firms within the next 15 days, before issuing its report to the cabinet.

TOT is alleging that the accused firms have accrued outstanding debts by failing to pay access charges, or due to alterations in contracts that were originally made under previous governments. A 2007 ruling stipulated that any alterations to contracts held with state-operated concession holders had been made unlawfully; TOT is the first claimant to take legal action since this ruling.

The state operator is demanding the back payment of ‘access charges’, the name for fees paid to TOT by private operators prior to 2004, when they were phased out by the country’s regulator in favour of interconnection fees. As these were paid from operator to operator, access charges were abandoned by most over the next few years.

Access charges make up the basis of over half of TOT’s claim; it is demanding THB138.6 billion from AIS subsidiary Digital Phone, CAT, True Corp and DTAC due to the unpaid fees. Shares have fallen in most of the operators in question, but this may be only temporary.

Finansia Syrus Securities research head Jitra Amornthum commented: “The dispute will take several years to be resolved by the legal process. The impact on the share prices of those companies will be limited.”

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