Com-Link Co.

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Com-Link was awarded a 20-year BOT contract for the operations of a fiber optic transmission network by the state-owned Telecommunications Organization of Thailand (TOT) in 1991. When completed, the project was to install 4,000 long distance telephone circuits, enabling TOT to use the circuits to support an extra three million phone lines for Bangkok and the provinces. The network was involve a 3,000 km fiber optic network running along the country's railway lines between Bangkok and Thailand's north, northeast and southern regions. The company was created as a joint venture signed in 1990 between Thai company Com-Link (70%), and the state-owned Thai Railway Authority (30%). Major Com-Link shareholders were the Thai Farmers bank and its affiliates (20%), CP group (15%) and Santi Bhirompakdi (10%). The company started services in 1995, after investing 5 billion baht (US$192 million). Com-Link and TOT had a dispute about payments because Com-Link started to operate ahead of schedule and wanted to bill TOT. Com-Link was supposed to finish the installation of the transmission network in five years, but it completed it in about three years. The argument of the state-owned company was that it needed only to pay when it put traffic on the network. When TOT started to carry traffic through the Com-link transmission network, it used data compression equipment so that it only used 75% of the total capacity. The tactic further complicated the dispute. After a four-year legal battle, the Appeals Court ruled in February 1998 that TOT had to pay Com-Link 3.39 billion baht (US$63 million), plus 7.5% interest on the principal, making up at least 5 billion baht ($US97 milion). By 2002, the cable network had a capacity of 42,870 circuits. Under the BOT agreement, the TOT was to pay 26% of the revenue to Com-Link from the second to seventh years, with the rate declining in the subsequent years. As of mid 2002, Com-Link had obtained 19.8 billion baht in revenue from the TOT.