State telecom enterprise TOT wants to register 40 billion baht in revenue in 2019, a 14% increase from the year before, thanks to partnership deals with major mobile operators and a different business plan.
TOT is also looking to develop into a digital business in 2019, providing digital service and solutions to Thai enterprises, in line with the Thailand 4.0 policy.
Monchai Noosong, TOT's president, said digital may generate revenue of just 200-300 million baht in 2019 because it is a new business, but he expects growth over the next five years to reflect demand in the digital transformation era.
More importantly, the digital business will boost future revenue streams when TOT's spectrum usage rights expire.
TOT has set a budget of 4 billion baht for digital business investment in 2019.
In 2018, TOT began preparations to provide digital service and solutions to state agencies in their digital adaptation efforts. The work includes marketing channels through online platforms.
Fixed broadband business generates 30% of total revenue, followed by voice service through fixed-line telephones at 20%, revenue from partnership deals at 20% and the rest from other segments.
Mr Monchai said TOT returned to profit in 2018 after accumulating deficits in the past two years because of the expiry of the 2G concession of Advanced Info Service (AIS) in September 2015.
The improved financial statement was mostly driven by partnership deals with Total Access Communication (DTAC) and AIS.
TOT expects total revenue in 2018 of 35 billion baht, with a net profit of 2 billion baht, compared with a net loss of 4 billion in 2017.
Customers use services at a TOT branch in Kantharalak, Si Sa Ket province. SANOH VORARAKS
Recently TOT, TeleAssets (a subsidiary of DTAC TriNet) and DTAC TriNet signed a lease for telecom equipment and domestic roaming service agreements to launch the country's first 4G LTE-TDD network on the widest bandwidth of 60MHz on the 2300MHz spectrum.
Under the collaborative framework, which lasts through 2025, TOT will lease telecommunication equipment from TeleAssets to build a network for broadband wireless access, including fixed wireless broadband and mobile broadband.
TOT will use a portion of the network capacity to provide services to customers and drive the government's digital policy.
The remaining network capacity will be used by DTAC TriNet through the roaming agreement, under which TOT will receive an annual revenue stream of 4.51 billion baht.
In 2017, the TOT board selected AIS to become its partner on TOT's 2100MHz spectrum. AIS is allowed to operate service on 15MHz of bandwidth on TOT's 2100MHz spectrum.
The two companies signed the commercial agreement in early 2018.
The partnership with AIS is expected to generate 10 billion baht a year for TOT, through three agreements: 3.6 billion baht a year from the rental fee of telecom towers; 3.9 billion for using TOT's 2100MHz spectrum capacity; and 2 billion for renting TOT's 2G equipment.
Mr Monchai said TOT is scaling up the business capacity of its flagship fixed-broadband service by seeking more partnerships to drive market share.
TOT will upgrade the existing basic fixed line to be entirely internet protocol (IP) phones by 2025, to cope with the downturn of fixed-line services, by replacing all copper wire networks with fibre optics.
With the upgrade, higher average revenue per user is expected to be earned from IP phone, from the fixed-line service revenue of 200 baht per subscriber.
IP phone enables the processing of voice communications via the internet protocol and the internet or intranet.
TOT and CAT Telecom are in the process of merging as part of government efforts seeking the best solution to save the two state telecom enterprises after the previous plan to create two new firms from TOT and CAT could not move forward.
The Digital Economy and Society Ministry said the merger concept is the best alternative at present.
The updated details of the merger plan may be submitted to the State Enterprise Policy Commission (superboard) in January 2019 before being passed to the cabinet for consideration, Mr Monchai said.