THAILAND: TOT and CAT given 15 days to settle rates

If telecom operaters do not agree on standard interconnection charges within time frame, the National Telecommunications Commission will set the rates

Bangkok Post
Wednesday, May 17, 2006

By Komsan Tortermvasana

Local telecom operators have 15 days to settle and adopt standard interconnection charges, the National Telecommunications Commission (NTC) said yesterday. The NTC said it would intervene and set the charges if operators fail to reach an agreement.

However, operators and experts fear a new round of legal complications because the NTC has not set standard interconnection rates. The regulator has instead left it to the two state operators, TOT Plc and CAT Telecom, to settle on rates between themselves and with their concession holders.

According to Suranant Wongwittiyakamchorn, the NTC secretary, the interconnection regulation was published in the Royal Gazette yesterday and took effect immediately.

Interconnection rates are the fees operators charge each other for handling calls across different networks.

Mr Suranant said the regulation would apply only to TOT and CAT, since they were the only operators licensed by the NTC so far, and not to private operators.

TOT and CAT still had time to work out acceptable rates, he added.

He said the NTC wanted rates to be agreed on by both state enterprises, while rates for their concession holders should also be jointly agreed among private and state operators.

However, NTC commissioner Sudharma Yoonaidharma predicted more legal disputes after the regulation was enforced.

He said that the regulation mandated both TOT and CAT to settle on rates within 15 days, adding that the NTC would only intervene if they could not come to an agreement.

He cited legal disputes that had occurred at Deutsche Telekom when interconnection rates were introduced in Germany, adding that the NTC would set up a ruling chamber to defuse any problems.

The chamber will comprise nine outside experts to screen all disputes arising from the day the regulation was enforced.

Meanwhile, a TOT executive said TOT had a clear stance on access charges and would not yield to concession holders.

Under the concession structure, cellular operators pay a share of their revenues to TOT or CAT, depending on which body granted the concession. Operators under CAT concessions pay 200 baht per number per month for access to the TOT network. In return, they pay a smaller share of their revenue to CAT than market leader Advanced Info Service pays to its concession owner, TOT.

But the operators under CAT concessions, DTAC and True Move, say they are still at a disadvantage. If they have to pay interconnection fees, they say, the access charge should be scrapped.

TOT, which derives a large portion of its revenue from access charges, would face serious financial trouble if the revenue dried up.

The TOT executive said an access charge was a legal commitment between two contractual parties -- TOT and its concession holders -- which no other agency, even the NTC, had the right to abolish.

In addition, he said, no TOT president or board would be brave enough to scrap the access charge as it was a criminal offence to cause damage to the state.

Anuparb Thiralarp, the president of the Thailand Telecommunication Management Academy, said that although the interconnection regulation was a good thing, it would bring about complicated legal disputes.

He said the NTC had double standards in terms of the regulations.

The NTC supervises only TOT and CAT, its licensees, while private operators who are concession holders are still under the supervision of TOT and CAT.

Meanwhile, regulations related to standard contracts between operators and customers and tariff structures were enforced on all operators, he said.

Therefore, if a private operator disagreed with the interconnection rule, a legal dispute could arise because TOT and CAT could not force private operators to adopt the rates.

He also said all operators would have to protect their interests, particularly TOT which did not want mobile operators to stop paying access charges amounting to more than 20 billion baht a year.

Date Posted: 5/17/2006