Thailand - Concerns over TOT's provision of an broadband Internet core network

[bangkok post] TOT Plc fears for the future of its broadband internet business after an aide to Prime Minister Abhisit Vejjajiva advised the state enterprise to axe a 3-billion-baht gateway project.

TOT hoped to turn the project into a core business generating revenue of 5 billion baht a year.

TOT has already called e-auctions to install gateway equipment worth 3.03 billion baht. The equipment would support the 577,000 new broadband internet and fibre-optic network ports in four zones across the country.

The bid's three successful consortia have been named: HM Consortium won Zone 1 for 570 million baht and Zone 2 for 552 million; JTS-JRW Consortium won Zone 3 for 832 million; and TFM Consortium won Zone 4 for 1.7 billion. Zones 1 and 2 are in Greater Bangkok.

HM is a led by ComLink with Marubeni. JTS-JRW is a Jasmine-led consortium. TFM is led by Advanced Information Technology and Thai Transmission Industry Co.

Winners of the Nov 26 e-auctions were due to be submitted to the board for approval, said a TOT director. But the issue was missing from the board meeting's agenda after the Information and Communications Technology Minister, Ranongruk Suwunchwee, recommended approval be put off until politicians close to the prime minister gave the go-ahead.

The board has scheduled another meeting before the end of the month.

Before the board meeting on Tuesday, Mr Abhisit asked TOT executives to provide clarification after anonymous letters criticised the project's transparency, said the director.

TOT president Varut Suvakorn was sent to discuss the issue with the prime minister but failed to meet him, speaking with his aide instead. The aide advised the president to kill the project, said the director.

The project had been criticised by the TOT union and ZTE-EMC, a failed bidder, said the director. The union has asked the ICT minister to examine bid documents from the auction winners to see whether the deadline has been met.

Mrs Ranongruk has told TOT to provide more information but Mr Varut insisted the bid committee held the auction with care and in TOT's long-term interests, said the director.

The auction process was also verified by TOT's legal office, he said.

Mr Varut said the ZTE-EMC consortium, which lodged the complaint, had a conflict of interest because its commercial and technical proposals did not meet TOT's requirements.

In particular, proposals on equipment and parts were missing and well as several items on optical parts, he said.

The TOT president also voiced concern that business and service competitiveness would be hit hard if the project fails to win approval, said the director.

If contracts cannot be signed, budget allocation will be cancelled and the project cannot proceed. If the project then goes ahead, the Finance Ministry would need at least two years to approve a new budget.

Mr Varut also said broadband internet would be a core substitute for lost revenues from steadily declining fixed-line revenue.

TOT fears for broadband - Bid results challenged for lack of transparency