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Thailand: Universal service levy considered to speed rural roll-out Print E-mail
Friday, 11 April 2008

TOT and CAT Telecom could be required to pay a 4% universal service levy if they do not make faster progress in rolling out telecommunications services in rural areas.

Suranan Wongvithayakamjorn, secretary-general of the National Telecommunications Commission (NTC), said that both state-owned operators have requested more time to meet their roll-out obligations. TOT says that the slow process of procuring telecom equipment is responsible for its failure.

Both operators agreed to provide service in unserved rural areas in lieu of contributing to the universal service obligation (USO) fund. In Thailand, if operators do not want to provide service in unserved areas, they are required to pay 4% of their revenue into the fund to finance operators interested in serving remote, rural areas.

The NTC has requested more information from TOT and CAT by April 22. If they fail to provide convincing reasons for failing to meet their roll-out obligations, the NTC could order them to contribute 4% of their revenues to the USO fund.

TOT has struggled financially in part because it lost around US$ 446 million in revenue when Total Access Communication (DTAC) and True Move stopped paying an access charge to TOT in November 2006. TOT sued the mobile operators for the overdue payments. The access charge is paid by the three mobile operators on CAT concessions to TOT for connecting their calls to other networks.

More financial difficulties face TOT after an arbitration panel recently ruled that the company has to pay US$ 759 million to TT&T for letting mobile operators use TT&T's network. TOT plans to appeal the decision.

Source: Thai News Service - WDR/Intelecon Regulatory News.