This proposal came up after the Cabinet approved Metropolitan Electricity Authority’s project to move a 261-kilometre electricity wire underground; leading to the conclusion that the telcos’ cable-laying on the same route also needed to be underground.
The underground cable laying for the project requires an estimated investment of 7 billion baht, said TOT’s acting president Montchai Noosong.
Currently, TOT is generating an annual revenue of 400-500 million baht from renting out the cable for 25,000 kilometres, of which 20,000 kilometres is in Bangkok.
“But this still cannot meet the demand in Bangkok. Therefore, we plan to launch our infrastructure fund in the same way that the Electricity Generating Authority of Thailand did, and use the proceeds from the fund to invest in cable expansion without creating more cost burden for the government,” the acting president told DEALSTREETASIA.
So far, the company is in the process of drafting a term of reference for hiring a financial advisor to evaluate the project’s possibility. It expects to make at least one billion baht a year from renting out the underground cable initially.
Meanwhile, he said that this month the company expected to finalise on a partner for the third-generation cellular business on the 2.1 gigahertz spectrum.
TOT has about 5,320 3G base stations nationwide that it has invested for 20 billion baht, of which 11 billion baht came from bank loans.
Montchai said the potential partner has proposed to set up 11,000 3G base stations for TOT. The subsidiary of the potential partner plans to lease 80 per cent of the combined capacity of TOT’s existing base stations and the planned new base stations to offer a 3G cellular service.
If the deal is not changed, it will generate more than 3 billion baht in annual rental income for TOT.
Local media earlier reported that it was in talk with Advanced Info Service (AIS), which also had long sought arbitration over the status of its ownership of the 13,000 towers after its concession with TOT expires in September this year.
The companies are are yet to arrive at a solution for the dispute.
Also Read: Thailand’s EGAT infra fund launch in Q1 2015