SRISAMORN PHOOSUPHANUSORN
TT&T Plc, the provincial fixed-line telephone provider, says it expects to reach a deal to reschudule payments of debts totalling 19 billion baht by the end of this year.
The refinancing, if settled, would turn around TT&T's financial structure, said Prasitchai Kritsanayunyong, senior vice-president for corporate finance.
TT&T faces principal repayments of two billion baht a year plus annual interest charges of 1.2 billion baht. It has lost money since 2003 and expects the poor results to continue until 2008.
''The deal would provide us greater cash flow and ease our financial burden,'' he said. ''It would also enhance our future investments.''
TT&T is likely to reach a rescheduling agreement with existing creditors, Mr Prasitchai said.
For refinancing alternatives, he acknowledged that new creditors would be reluctant to provide loan facilities because of its current legal dispute with TOT Plc over access charges, as well as new allegations raised by TOT that the company is illegally using the state telecom enterprise's interconnection points.
Mr Prasitchai said TT&T was trying to reduce dependence on fixed-line business, which accounts for more than 50% of its revenue. Instead, it plans to focus more on licensing-based businesses, including voice-over Internet protocol (VoIP), public telephones, value-added services, leased lines and network rentals.
''We expect the proportion of our concession-based business will drop steadily to 40% in 2008 and to 10% over the next three to five years,'' he said.
TT&T pays 43% of its fixed-line revenue to TOT Plc and 18% for leased-line and non-voice services _ by far the highest rates in the industry. It pays just 15% of revenue under other licences from the National Telecommunications Commission (NTC).
''Our regulatory fees now have been reduced to 28% of revenues compared with 40% in the past,'' Mr Prasitchai said. ''TT&T is the second-largest TOT concessionaire paying revenue, behind only mobile operator AIS.''
However, he said, TT&T still expected to face operating losses over the next two years due to declining fixed-line revenue and high investment costs for broadband internet infrastructure.
He also attributed the losses to TOT price-dumping on domestic long-distance call rates, industry liberalisation, the introduction of low-cost VoIP and a price war among mobile operators.
TT&T shares closed yesterday on the Stock Exchange of Thailand at 1.15 baht, unchanged, in trade worth 13.51 million baht.
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