Festering problems within the Telephone Organisation of Thailand could explode under the next government
By KOMSAN TORTERMVASANA
The state-owned Telephone Organisation of Thailand Plc (TOT) has sent out a series of bad signals lately.
The trouble started on Aug 24 when a leader of the agency's labour union called for its board of directors, led by Saprang Kalayanamitr, to resign because it lacked management skills and caused conflicts between the organisation's board and president.
This was followed by ICT Minister Sitthichai Pokaiya-udom's comment that the poorly-performing, trouble-plagued organisation was on the verge of collapse.
The explosions have died down a bit, with the TOT board appointing senior executive vice-president Kittipong Taemeyapradit as the company's acting president.
Mr Kittipong replaces Somkuan Bruminhent, who was found guilty by an investigation committee of imposing a lower-than-usual fine against Alcatel for its failure to complete a transmission network expansion project on schedule and his termination is awaiting ministry ratification.
But the roots of the problems remain intact and are likely to find ways to blow up again in the next government.
Like any traditional grade-A enterprise, TOT is huge. It generates more than 25 billion baht in revenue each year and employs about 19,000 people. Its procurement and hiring budget amounts to several billion baht a year, not to mention the more than 20 concession contracts it holds with private companies and benefits from the very expensive fixed line and mobile concessions it gains from telephone companies.
Considering all the priceless eggs in its basket, it is no surprise that TOT has faced political interference from every government. A certain number of board members must come from political groups and the board chairman must be approved by the government.
As all these benefits come from monopoly and concession rights _ a windfall brought to it by the private sector, in essence _ the TOT has not felt a pressing need to have a business objective or master plan to make it a more competitive organisation in the long run. Even though it has been privatised, the organisation still functions as a bureaucratic entity.
The three major interest groups in TOT are: board members from political groups, high-ranking executives who can make or break companies dealing with TOT and the labour union which can throw its support for or against certain projects or individuals allegedly for the sake of state benefits or the interests of employees.
The three interest groups are backed by businesses, suppliers, concessionaires or potential bidders.
Don't forget that just the small change in the content of a contract or concession paper can result in millions of baht in profits or losses.
Again, it is no surprise to find retired TOT executives as presidents or board members of private companies under contract with the organisation.
The influence of the labour union, with almost 20,000 members, can't be dismissed. It can make moves in the media to support or oppose projects which can affect the interests of its own executives or private companies. It is also a channel for ''outsiders'' to influence the affairs within TOT.
Union politics was a reason behind the recent call for the board chairman Gen Saprang to resign.
In effect, the union board is presently in an ''acting'' capacity _ its term expired in June. Traditionally, an election for a new board should be held before expiration, but the board did not want to do that because it was not sure it would be re-elected.
It tried to petition the Ministry of Labour for an election at the end of the year but the ministry rejected it and ordered the acting union to hold an election before Oct 14.
Of course, the acting board of the union and the new group that seeks to contest it are campaigning for votes. Charging the TOT board of mismanaging the organisation and causing profits to go down is a safe bet _ nobody at TOT would deny the accusation as most of the organisation's projects and procurement plans have been stalled for more than six years.
The conflicts within the organisation rage on while TOT struggles to adapt itself from being a regulator to becoming an operator following the sector's liberalisation. Its main product, the fixed line, is not making much money as people are moving more towards wireless service.
The problem does not stop there.
Since the National Telecommunications Commission approved an interconnection regime, two mobile phone operators, DTAC and True Move, have stopped paying access charges _ around 20 billion baht a year _ to TOT.
Mr Sitthichai commented that excluding the revenue-sharing money TOT was receiving from concessionaires, the organisation was already operating at a loss.
That Gen Saprang has a lot of political baggage, as well as a much-contested candidacy to become army chief, does not help the situation. It makes the board more prone to being a target for political wrangling.
The beleaguered presidency of Mr Somkuan is another complicating factor.
While accepted as a capable executive, Mr Somkuan had problems working with others. His difficulties with the current board were many.
That he was put under investigation caused a vacuum at the top. Essentially, the organisation has run without a president and virtually stood still.
The investigation committee finally found Mr Somkuan guilty. The board of directors forwarded its decision to sack him to the Finance Ministry this week. Once the ruling is acknowledged by the ministry, the termination of the employment of Mr Somkuan will take immediate effect.
The frequent change of leadership _ the TOT has had three boards and seven presidents and vice-presidents during the past year and a half _ affects deals with the private sector and deepens the inherent problems, a member of the board said.
When the top decision-making is not there, the business cycle _ purchasing new materials or investing in maintenance _ is severed, too.
On top of all these, TOT's fate also hangs on the still-pending court case with True Corp.
Earlier, an arbitration committee ordered TOT to pay an access charge share of nine billion baht to True Corp, its fixed-line concessionaire.
TOT has appealed the verdict. But if it loses, it may have to pay 14 billion baht including interest to True Corp.
The crisis will be an urgent one for the next government. And it won't be an easy one to deal with.