Mobile leader Advanced Info Service Plc (AIS) has submitted a joint-venture proposal to TOT Plc to operate telecom tower sites after its mutual second-generation (2G) mobile concession expires next month.
The proposal by the country's largest mobile operator is to ensure continuity of its mobile service and serve development of next-generation mobile networks.
AIS now provides 2G mobile services on the 900-megahertz spectrum under a concession agreement with TOT that is due to expire in September. The company has 16,000 2G base stations equipped on 15,000 telecom towers nationwide.
AIS wants to rent the existing towers from TOT after its concession expires to serve development of its commercial 3G and 4G services next year, said a TOT director who asked not to be named.
"Jointly managing the mobile towers will also generate rental income for TOT after the expiry of its build-transfer-operate concession with AIS expires," the source said.
Under the proposal, he said, AIS would invest in the venture in exchange for a potential 49% share of ownership in the company, while TOT might have to pay nothing for a 51% stake because the state enterprise owns the tower assets under the concession terms.
The source said AIS and TOT must jointly calculate the value of the tower assets before setting fair network rental fees.
TOT board director Djitt Laowattana said the agency planned to bring an additional 13,000 telecom towers from AIS subsidiary Digital Phone Co as well as 5,320 towers belonging to TOT into the venture.
"We expect the joint-venture deal to be settled by November, as both parties could not reach consensus on two critical issues," he said.
Telecom towers under the planned venture could be rented to other telecom operators to serve 4G services next year.
The venture needs to be approved by the State Enterprise Policy Commission or superboard before being submitted to the cabinet for endorsement, said Mr Djitt.
AIS has proposed to enter a partnership with TOT in almost all business areas, ranging from mobile services to telecom infrastructure leasing.
TOT expects to announce its strategic partners next month, said Mr Djitt.
He said the telecom tower venture would follow a memorandum of understanding signed last December between CAT Telecom Plc and Total Access Communication Plc (DTAC).
CAT and DTAC are in talks to set up a joint-venture company to manage network sharing. DTAC provides 2G services on the 1800-MHz spectrum under a concession agreement with CAT that is due to expire in 2018.
Mr Djitt said TOT had urged AIS to quickly settle the dispute over telecom tower asset transfers by next month because it is a crucial part of the venture.
AIS chief executive Somchai Lertsutiwong admitted that AIS and TOT were in negotiations about the joint venture. He declined to provide details but said the proposal would be a win-win resolution.