TOT-CAT merger looks to be on ice
TOT Plc and CAT Telecom Plc might have to wait for the next government to decide if they can go ahead with their plan to merge, a source at the Information and Communications Technology (ICT) Ministry said on Friday.
The source said the ministry had yet to authorise the melding of the two state companies. Permanent secretary of the ICT Ministry Kraisorn Pornsutee declined to comment on the matter. The merger of TOT and CAT was a policy of the government of prime minister Thaksin Shinawatra, which was ousted in a coup on Tuesday. The policy was aimed at reducing the two company's redundant investments and improving their competitiveness in order to prevent them loosing out to private operators in the newly liberalised market. CAT and TOT have thus far been competing against each other in the cellular and overseas-call markets. Executives of both companies have already agreed upon a merger model, under which the Finance Ministry would set up a holding firm to oversee CAT and TOT. The two companies would continue to work separately under the plan so that no job cuts would be required. Together, the CAT and TOT would create a network provider that would invest in a cutting-edge network and then lease it to their subsidiaries and possibly other companies. Tuesday's coup has also affected the National Telecommunications Commission (NTC), which is uncertain if it retains its role as independent regulator after the coup leaders, the Council for Democratic Reform under Constitutional Monarchy (CDRM), abrogated the 1997 Constitution. The NTC has said it may not issue any new policies without directions from the CDRM. Article 40 of the 1997 Constitution mandated the establishment of an independent telecom regulatory body to promote equal public access to telecom services, fair market competition and effective frequency allocation and utilisation. The NTC met the CDRM on Thursday and was told to continue working as usual.
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