MVNO threatening to sue TOT

MVNO 365 Communications is considering suing TOT for contract breach | Image: Company Logos

Surin Ritteepamorn, CEO of 365 Communication Co., Ltd., the company behind the MVNO 365-3G, is considering suing former host operator TOT for unfair business practice.

Surin Ritteepamorn claimed that TOT terminated the agreement between the MVNO and TOT before the end of the contract, and even though the MVNO provided a satisfactory value per SIM to TOT, they (TOT) decided to cancel the contract and announce that 365-3G would not be able to carry on, and TOT was stepping in to help those left behind. The case is now pending inspection.

Not the first time

In December, 2011, 365 Communication, filed a complaint against four members of TOT’s 3G committee with the Thai National Anti-Corruption Commission (NACC), accusing them of breaching the criminal law, citing unfair contracts when it learned that its contract with TOT had clauses that gave the largest MVNO on TOT’s network a cost advantage over it in terms of rental capacities.

TOT’s board response was that they were aware of the issue and claimed to initiate new contracts that would be fair to all the MVNOs.

Since 2009, five MVNOs have had the license to resell TOT’s 3G-2.1 GHz service under one-year contracts.

The five MVNO’s are:

  • Mojo3G.
  • Samart I-mobile 3G.
  • 365 Communications (closed)
  • IEC3G (For sale)
  • Loxley (Has added the Malaysian MVNO Tune Talk to its MVNO)

Of the approx. 420,000 combined MVNO customers, Samart I-mobile are said to have 400,000 subscribers.

Last month TOT announced they were ready to sign a 12-year contract with Samart I-Mobile Plc (SIM) to continue providing 3G mobile service under a mobile virtual network operator (MVNO) model on behalf of the state enterprise with a possible 46:54 revenue-sharing agreement.

However, the Office of the Auditor-General (OAG) found that the contract would likely place TOT at a major disadvantage and casted doubt on the benefits to the state telecom enterprise. TOT’s President admitted they needed to go back to the contract details again as required by the OAG.

Long term effects for TOT

The outcome of the case between 365-3G vs. TOT, if accepted by the courts, has the potential to become a nightmare for TOT, as TOT is currently faced with delays and issues involving the 12-year MVNO contract with Samart I-Mobile Plc (SIM)

TOT urgently needs new revenue streams to compensate for the end of their concession revenue by December 2013. A vital part is to secure MVNOs on their network, in order to survive in the new role as service provider.

So far TOT hasn’t managed to secure enough revenue generating MVNO agreements, and is mainly relying on one MVNO source Samart I-Mobile Plc.,

Thailand’s National Broadcasting and Telecommunications Commission (NBTC) recently reported that as of October 2013, Thailand has reached 17.7 million 3G subscribers on the new 2.1 GHz network. AIS had managed to gain 12 million users (since July 2013), followed by DTAC’s “Trinet” with 5 million and True Move H 700,000 while TOT has 420,000 subscribers on TOT3G (Available since 2010)

Author: Allan Rasmussen
Managing director at Yozzo. Allan’s expertise includes the development and execution of growth strategies, market insights, trends and opportunities, new business models and strategies
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