TOT, CAT spinoffs still on target
Two firms due to start operations Nov 1
The government has insisted National Broadband Network Co (NBN) and Neutral Gateway & Data Centre Co (NGDC), the two new companies that will split off from TOT Plc and CAT Telecom, will start operations on Nov 1 even as it agrees that due diligence on their transferred assets will take at least five months to complete.
TOT is on the verge of creating NBN, while CAT is setting up NGDC.
Splitting NBN from TOT and NGDC from CAT follows a June 13 cabinet order approving a Digital Economy and Society (DE) Ministry proposal to create longterm, sustainable revenue and eliminate investment redundancy in these stateowned enterprises.
The prompt start of operations is in line with the resolution agreed upon by the Oct 11 State Enterprises Policy Commission meeting, which was chaired by Prime Minister Prayut Chan-o-cha, said DE Minister Pichet Durongkaveroj.
“NBN and NGDC will initially operate their businesses at TOT and CAT’s headquarters, but the staff of the two new companies will be clearly separate from their parent companies starting from Nov 1,” he said.
Mr Pichet said the government does not want the separation process to be delayed.
NBN, which will be 100% owned by TOT in its initial stage, will own all of TOT’s domestic networks, including transmission and fibre-optic lines, and will provide wholesale network capacity to TOT, CAT and private operators.
NGDC, which will initially be 100% controlled by CAT, will own CAT’s data centre and submarine cables, and will supply wholesale international network capacity to CAT, TOT and private operators.
The two new companies will control a number of assets and hard infrastructure that need time to be precisely valued, said Mr Pichet.
The separation of accounting transactions between parent companies TOT-CAT and subsidiaries NBN-NGDC will be completed by March 31, 2018, he said.
TOT and CAT drafted employment conditions intended to attract existing employees to transfer to NBN and NGDC. TOT has 15,367 employees and CAT has 5,995. NBN expects to employ 1,200 people, while NGDC aims to put 479 workers on its payroll.
NBN and NGDC will each have up to seven members on their boards of directors, which will include representatives of TOT, CAT, the DE Ministry and the private sector.
Mr Pichet said existing TOT and CAT employees have already applied to work at NBN and NGDC. There are more than 1,200 TOT employees interested in working at NBN, he said.
The state enterprises, however, cannot transfer existing employees to fill all positions at NBN and NGDC, but must also recruit outsiders “in proper numbers.”
Rungsan Channarukul, TOT’s senior executive vice-president for wireless business, said there are many employees interested in working at NBN since salaries are more than 10% higher.
“Most of the interested employees have worked at TOT for less than five years, since this group was recruited under less favourable terms than older employees,” he said.
Mr Rungsan said valuing the assets, especially those related to transmission and fibre-optics, is complicated and time-consuming because many of these items have been depreciating for close to 20 years.
While the government has been enthusiastic about the shake up, the labour unions of TOT and CAT have ardently opposed the process.
The detractors at the unions say the fact that NBN and NGDC will be run through the same state-run organisational management structures as TOT and CAT will drive the new entities to fail.
NBN and NGDC, the unions said, will be unable to conduct their business with practicality and efficiency under the state-run organisational structure, which lacks investment and decisionmaking flexibility.