Current and future development

The year 1881 was an historic one for Thai telecommunications, when the first simple telephone line was constructed for national security. It was during the reign of King Chulalongkorn the Great. Thailand's telecommunication service then took root and has since been successively developed to its current modern status.

The Telephone Organization of Thailand (TOT) was established on February 24, 1954 as a state enterprise, by separating domestic telephone service from the Department of Post and Telegraph under the Ministry of Communications. It began modest telephone service to the general public as a govenment-owned commercial entity with 10,000 step-by-step switching lines. Throughout its forty year life, TOT has been gradually enlarged to become a modern and strong organization responsible for domestic telecommunications service within Thailand as well as to neighboring countries, leaving overseas services to another state enterprise, the Communications Authority of Thailand (CAT).

At present, the TOT network of about 2.4 million telephone lines is composed of up-to-date digital switching and long distance telephone equipment. Its nation-wide services cover basic telephone as well as many other value-added services such as telefax, paging, cellular, on-line data, public telephone with coin or card, common based radio telephone, videotext and ISDN -- to cite some examples. The evolution has been phenomenal, and yet despite rapid growth, Thailand still lacks enough telecommunica-tions capacity to meet the rising public demand, fueled by the fast development of the Thai economy over the past decade.

TOT has continued expanding its network by various means of self-finance, including bonds and conventional loans. Nevertheless, various expansion projects were unable to produce enough supply to match demand. In early 1990, the government and TOT jointly decided to issue an international invitation to the private sector to invest in a project for three million telephone lines' expansion, using the "build-transfer-operate" (B-T-O) concept.

The excellent response brought two consortia to work with TOT. This urgent measure to reduce telephone shortage was a unique undertaking in which private firms, Thai and foreign joint ventures, were considered TOT's full partners in expansion projects for the first time. They were not simply contractors to TOT as in earlier undertakings. This opportunity gave the Thai government and TOT fresh ideas regarding new ways and means of expanding telecommunications facilities. The private sector, too, had the opportunity to prove a capabilty in a cooperative role to a government agency, the TOT. These two projects would span the period of the Seventh National Economic and Social Development Plan, 1992-1996. While able to address accumulated demand, they would not be able to absorb new demand during the Plan's end or afterwards.

TOT is now looking ahead to the duration of the Eighth National Plan, for the period 1997-2001. It is estimated that another six million phone lines should be added. If achieved, the Thai telecommunications network would reach 12 million lines, with the most up-to-date facilities, providng first-class service to customers.

This ambitious plan will require innovation. Financially, TOT will not be able to obtain enough conventional loans. It may be unable to repeat another B-O-T-project. Organizationally, TOT may have to be restructured, to be transformed from the present state enterprise fully owned by the government to one able to meet free competition in the telecommunications business.

TOT has started to re-orient itself toward the new market- driven environment. It has selected a well-known consulting firm to make an in-depth study about the privatization of TOT. If all plans go well, the Thai government will be able to decide on privatization of the TOT around the end of 1994, or early 1995. The government would also need to amend some established laws regulating the sector and legislate for a period of intensive change.

Meanwhile, TOT is working on a scheme to establish manufacturing facilities for production of switching and significant other equipment to support the rapid execution of the projected six million new lines. TOT intends to use this grand project to initiate a long-term telecommunications industry for Thailand. This is a great challenge, but an unavoidable alternative so as to sustain healthy growth.

As the government and TOT have been providing more telecommunication facilities to the general public in urban and provincial communities, Thailand's rural areas have not been forgotten. During the Fifth and Sixth Plans, TOT installed public long distance telephone terminals, connected with digital microwave radio links to some 1,800 locations. During the Seventh Plan, TOT will continue installation of this service, expanding to about 5,000 more locations. Entirely financed by loans, this program (unprofitable to TOT) brings immeasurable benefit to rural communities.

TOT has felt quietly satisfied with its endeavor, in accordance with the objectives of its mission as declared in the Royal Act of the Telephone Organiza-tion of Thailand B.E. 2497. It is TOT's humble response to the call for provision of good telecommunications for Thailand's people. It shall continue to serve willingly and better amidst coming changes, in the future as in the past.

Next Chapter: Siam Commercial Bank