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TOT internet problems


ranma500

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And in todays Bangkok Post TOT says:

 

(I can;t help bt wonder if in 10 years time we'll call NGN OGN's?)

 

TOT cuts reliance on fixed lines

 

Broadband revenue to make up 70% of total

 

KOMSAN TORTERMVASANA & SRISAMORN PHOOSUPHANUSORN

 

The TOT board says it will invest 64 billion baht to diversify its core revenue source away from fixed-line telephone service, which is plunging due to the fast-growing broadband business, under a four-year turnaround plan.

 

The scheme aims to increase the proportion of broadband revenue to 70% of total earnings by 2001, compared with 30% currently.

 

Colonel Natee Sukolrat, a board director and spokesman, said that the four-year turnaround draft for 2007-10, which was finished last week, would be submitted for board approval next week.

 

Under the plan, TOT would spend 16 billion baht annually until 2010 to convert its core fixed-line network to NGN or next generation network technology using 70% of its total investment capital.

 

NGN technology could allow the TOT network to handle images, voice, data and broadband internet, he said.

 

The state telecom enterprise forecasts revenues of 50-63 billion baht in 2010 when the NGN is complete.

 

The plan would turn the ailing TOT into a strong competitor after suffering declining earnings from fixed-line services and public telephones, which are its core businesses.

 

TOT's revenues have been shrinking ever since two mobile operators, DTAC and True Move, stopped paying network access charges that normally bring in 14 billion baht a year for TOT.

 

The mobile firms stopped making payments last November, claiming that interconnection charges approved by the National Telecommunications Commission took precedence.

 

Col Natee said TOT would now focus on broadband services, multimedia circuit leasing, wireless communications, and WiFi.

 

TOT expects revenue to grow by 9% a year under the turnaround plan.

 

It did not fix target for return on investment because it was an initial forecast that needed approval from the Finance Ministry, TOT's sole shareholder.

 

''If the ministry rejects the turnaround plan, then TOT is not able to invest any further,'' he said.

 

The board spokesman said that third generation or 3G mobile phone service would not be initiated under this government because it had not been put before the cabinet for consideration.

 

It was thus very likely that the 3G service would have to be decided by the elected government, he said.

 

In another development, TOT deputy president Kittipong Taemayapradit said TOT was considering stopping paying dividends amounting to 40% of net profits to the Finance Ministry due to steep falls in revenue as customers moved toward mobile phones. The company would still pay corporate tax of 30%.

 

Last year TOT paid dividends and corporate taxes of 9.8 billion baht to the Finance Ministry. In the eight months from January to August, TOT earned only 34.5 billion baht, down five billion baht from the revenue it earned in the same period last year.

 

TOT's net profits also dropped from 5.68 billion baht to 4.02 billion baht for the period.

 

Loss of access charge payments by mobile operators has cost TOT almost 10 billion baht from the previous earnings of 14 billion baht a year.

 

Meanwhile, TOT has adjusted its forecasts to accommodate a 4% salary increase for its staff, which will cost it another 400 million baht a year.

 

TOT was recommended by Tris Ratings to submit a plan on reviving its business after facing a crisis when the two mobile phone operators stopped making their access charge payments.

 

Under Tris's recommendation, TOT is to submit a qualitative plan by next month, while a quantitative plan has been submitted every three months.

 

TOT was corporatised in July 2002 to prepare for open competition and a stock market listing, which has since been postponed indefinitely.

 

But five years on, the heavily overstaffed state enterprise has still underperformed the booming local telecom sector.

 

Revenues fell for three consecutive years after it changed from a state enterprise to a public company.

 

In 2004, TOT earned 76.9 billion baht with 11.42 billion baht in profit. But in 2005, its revenues fell to 76 billion with a profit of 6.7 billion. In 2006, revenue was 75.76 billion baht and profit improved slightly to 6.98 billion baht.

 

This year, TOT's first-half revenues fell sharply to 25.94 billion baht with a mere 2.8 billion baht in profit.

 

 

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