True Move and Total Access Communication (DTAC) signed the cellular industry's first interconnection rate agreement yesterday, and immediately stopped paying the access charge to TOT.

If both cellular operators pay only the interconnection charge to each other, TOT stands to lose about Bt14 billion per year from non-payment of the access charge, which was designed to compensate TOT for handling calls between other players' networks.

True Move CEO Supachai Chearavanont said the termination rate of Bt1 per minute and the transit rate of 20 satang per minute for calls between the cellular operators had gone into effect immediately.

Supachai said TOT must drop its access charge and replace it with the National Telecommunications Commission's interconnection regulations already in place. TOT, which is a NTC licensee, has to comply with the regulator's rulings.

"We don't want to pay both access and interconnection charges," he said.

Advanced Info Service (AIS) president Wichian Mektrakarn wondered what TOT would do with his telecom if TOT frees both rivals from paying the access charge. But he declined to elaborate.

Under the interconnection regulations, all telecoms are required to share voice and data revenue between two networks on a fair basis.

The interconnection tariff covers origination, transit and termination charges. The termination charge is what a service provider pays to another provider for receiving its call, while the transit charge is what a service provider pays to an intermediate network for passing its call to the receiving party.

The origination charge is what the service provider that receives a call pays to the party from where the call originated. The charge is for CAT, which has to share its revenue on an overseas call with the operator that transferred the call from its subscriber to CAT.

All holders of cellular concessions from CAT, including True Move and DTAC, are subject to the access charge, which is regarded by True Move and DTAC as handicapping them in their competition against market leader AIS.

Both believe that TOT waived the access charge for AIS, which operates under a concession from TOT rather than CAT, but AIS argues that it pays the access charge as part of its concession fee.

Analysts estimate that DTAC and True Move have to pay almost Bt7 billion and Bt4 billion in access charges respectively this year. Supachai said True Move paid about Bt3 billion last year.

"If we stop paying the access charge, I don't think TOT will retaliate by disconnecting our network," he said.

True Move has already prepared a solution for TOT to cushion the huge effect of the access charge loss. It will propose paying a higher termination charge to TOT and receiving a low termination charge from TOT.

"We're willing to lose an advantage to TOT, but not to AIS," Supachai said.

TOT senior executive vice president Kittipong Tameeyapradit said TOT would not punish the two by disconnecting their networks at consumers' expense, but would hold CAT responsible for the loss of access charge revenue.

CAT president Phisal Jorphochaudom said he would consult with his legal department to find a way out of the regulatory quandary with TOT.

Somkiat Tangkitvanit, a lecturer at the Thailand Development Research Institute, said True Move and DTAC should show the public how they calculated their interconnection rates to prove they were based on the real cost of providing the service.

DTAC and True Move also separately submitted letters to TOT and CAT. The letters to CAT said CAT must not pay the access charge to TOT on their behalf.

The access-charge agreement mandates TOT to seek compensation from CAT if CAT's concession holders stop paying the charge to TOT. CAT can then collect the charge from them at double the amount.

The letters to TOT asked TOT to negotiate with them to end the access charge, which they view as antagonistic to the NTC interconnection regime.

Supachai denied that the adoption of interconnection charges would prompt the cellular operators to jack up their call rates.

"I think the interconnection charge will prevent network jams, as the cellular operators will avoid slashing rates to stimulate call traffic to the point that the networks get clogged up," he said.

DTAC and True Move were requested to submit their final interconnection agreement to the NTC within 15 days for approval.

All telecom players initiated negotiations among themselves to set interconnection rates after the NTC's interconnection regime was published in the Royal Gazette on May 17.

They have to fix the rates between themselves within 90 days, or else the NTC will temporarily set the rates for them.

Usanee Mongkolporn

The Nation