By Komsan Tortermvasana
The 80,000 subscribers to Thailand's smallest mobile phone company Thai Mobile were cut off temporarily on Wednesday when owners TOT Corp and CAT Telecom failed to pay the bills of a major supplier.
Thai Mobile, held 58% by TOT Plc and 42% by CAT Telecom, has suffered an accumulated loss of six billion baht and has incurred debts of 900 million to Samart Corporation since it began service in 2001. Debt payments are in arrears and the company is unable to resume payments, a TOT board director said.
Dr Chit Laowatana, a TOT board director, said it would be difficult to settle the debt with Samart because Thai Mobile had so few subscribers and has accumulated more than six billion baht in losses.
TOT was also unable to settle its negotiations with CAT Telecom on the purchase of 42% of the latter's shares in Thai Mobile, he said.
Samart was awarded three contracts from Thai Mobile worth a total of 2.5 billion baht. All contracts - billing, customer relation management, and marketing - are valid for five years.
TOT has already paid one billion baht to Samart but suspended payments almost a year ago.
Since the suspension, Samart has sent several notices requesting that TOT pay the outstanding debt. The last notice sent on May 4 threatened to shut down its services on May 7 if TOT failed to pay.
Samart delivered on its threat, leaving 80,000 subscribers unable to make phone calls.
TOT was subsequently able to negotiate with Samart to reopen the service.
Thailand has nearly 40 million mobile phone users. Most of Thai Mobile's customers are civil servants or TOT employees.Thai Mobile president Vasukree Klapairee said that the shutdown meant that all customer service calls were directed to Thai Mobile.
"Our staff were not prepared to answer all incoming calls and it was chaos," he said.
He added that Samart had been in business for a long time and should have known that any shutdown should have been discussed beforehand.
He said TOT paid Samart 40 million baht a month from the three contracts assigned to Samart. Mr Vasukree added that Samart had agreed to reopen the service after discussions with TOT.
He said that Thai Mobile's total loss of nine billion baht was deceptively high because it included three billion baht in depreciation costs.