TT&T Public Company Limited

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dTT&T Public Company Limited was formerly known as Thai Telephone & Telecommunications Pcl. (TT&T). The latter was awarded a 25-year build, transfer, and operate (BTO) concession to construct and operate 1 million local telephone circuits in July 1992. The installation of 1 million telephone lines covered all of Thailand except the Bangkok Metropolitan Area and was expected to reach completion within five years. The agreement required the company to pay 43.1% of its income as a royalty to the Telecommunications Organization of Thailand (TOT). In September of 1995, TT&T was allowed to install additional 500,000 fixed lines, and was granted immunity from its 43.1% revenue payments to TOT until 1998. In return, TT&T agreed to wave exclusive rights to offer local services in rural areas starting in 1996. TT&T also received a license to operate Cordless Access Services (CAS) as a value added services to fixed line subscribers in 1996. In August of 1997, the company was granted a license to install and render services of 15,000 public payphone lines. TT&T was originally established as a joint venture by Loxley (Bangkok) Ltd. (25%), Jasmine International Co., Ltd. (25%), Italian-Thai Development Corp. Ltd. (20%), and Phatra Thanakit Co. Ltd. (10%), all Thai companies. In November 1992, Nippon Telegraph and Telephone Corp (NTT) of Japan joined TT&T as a strategic partner and became a 20% equity stakeholder. In May 1994, TT&T offered 50 million shares (10% of the company) to the public on the Bangkok stock exchange. TT&T and its lead underwriters, Phatra Thanakit, for the domestic portion, and US investment bank Goldman Sachs for the international portion, raised US$283 million. The total cost of the network was estimated to be US$1.6 billion. This figure also included the installation of the CAS network. France's Alcatel for transmission systems and Sweden's Ericsson for switching equipment were the main suppliers. By 1995, TT&T had invested approximately US$1 billion in constructing the telephone network and installed 800,000 lines in addition to switching and transmission equipment, outside plant, computerized customer service system, and other network supporting system. By that time, the network covered 72 provinces. The company had installed around 1.5 million fixed lines by the end of 1996. As a consequence of the Asian financial crisis, TT&T posted losses and reduced the 43.1% revenue payments to 25% in 1997. Commercial banks ceased lending money to TT&T from 1996. This prevented the company from paying its two main equipment suppliers (Ericsson and Alcatel). By 1997, the company's total debt was US$1.41 billion, most of it was owed to Ericsson and Alcatel. TOT tried to help TT&T by reducing the royalty fee and by acquiring 37% of the company in October 1997. This reduced Jasmine's shares from 20 to 12%, NTT's shares from 18% to 11%, Loxley's from 13.7% to 8.5%, Italian-Thai's from 11.2% to 6.9%, and Phatra Thanakit's shares from 6.4% to 4%. In September 1998, TT&T contracted Pricewaterhouse Coopers to help it restructure its debt. By 2002, the Company succeeded in debt restructuring with financial creditors and major creditors. By 2003, the TOT had sold its stake back and major stakeholders were Jasmine International Public Company Limited (35.88%), ITD Special Purpose Vehicle Company Limited (13.64%), Nippon Telegraph and Telephone West Corporation (11.45%), and Loxley Public Company Limited (9.92%). By end 2005, the Company had 1,236,899 fixed connections out of a 1.5 million line capacity. The company's revenues, however, came largely from the Internet (broadband) and public phone usage, while fixed-line services were not expected to expand. In 2006, the Company's management planned to reverse the loss by investing roughly five billion baht, of which three billion baht for fixed-line expansion and two billion for broadband network installation. In February 2006, the National Telecommunications Commission of Thailand granted the first fixed-line telephone and broadband licence to TT&T's telephony and data subsidiary Triple T Broadband to provide telephone and broadband services in Bangkok. Fax sent 8/11/03 to President & Chief Executive - Dr Pisit Leeahtam, (662) 6932122-25. Email response from Phanruedee Hasdintra,phanruedeeh@ttt.co.th, see www.ttt.co.th 8/13/03.