Government-owned CAT Telecom wants to terminate its mobile concessions with three private operators due to high annual regulatory costs required by the National Telecommunications Commission (NTC).
CAT Telecom has been transformed into a telecom services provider. While it used to be the sector regulator, it granted concessions to private firms to provide telecom services, requiring them to share a portion of their revenue with CAT. Under the new licensing terms set by the NTC in August 2005, CAT Telecom can continue with its revenue-sharing agreement with TA Orange, Total Access Communication and Digital Phone. However, it must pay regulatory fees on their behalf. The fees include: 3% of pre-expenditure revenue from private operators, a monthly numbering fee of THB12 per number, an interconnection charge of THB1.07 per minute and 4% of revenue as a universal service obligation.
"Each concession would put us in the red. We can't afford to retain them as concessionaires," a CAT executive said.
Previously, private operators wanted to end the concession contracts but under the new environment, CAT Telecom is seeking to scrap the agreements. The NTC was established late last year to oversee the creation of a new regulatory structure in the telecom sector ahead of the industry's planned liberalisation in 2006.
Source: Dow Jones - WDR/Intelecon Regulatory News
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