Intouch Holdings, the parent company of Advanced Info Service (AIS), the largest mobile phone operator in Thailand, announced on Nov 9, that it has received a notice of arbitration over the Thaicom 5 satellite from the Ministry of Digital Economy and Society.
Intouch Holdings is a subsidiary of Singapore Telecommunications (Singtel), who acquired a 21% stake in the Thai company in August 2016.
See: Singtel to acquire shares in Intouch and Bharti Telecom from Temasek for $2.5 bil in total
According to the notice, the ministry has requested that Intouch and Thaicom Public Company build a replacement satellite for Thaicom 5 “and hand it over to the Ministry”.
If the replacement is not built and launched, both companies have been requested to pay about 7.79 billion baht ($342.6 million) to the ministry, plus 7.5% interest per annum from Oct 30, 2020.
In addition, both companies will have to pay a fine of 5.0 million baht with 7.5% interest per annum from Oct 30, 2020, as well as a daily fine from Nov 1, 2020, until “the replacement satellite is handed over or the compensation is paid”.
Intouch says the dispute settlement process has just started and that it is waiting for the case to be accepted. It adds that it is preparing a statement of defense, but has not yet hired an arbitrator.
“The company and THAICOM have always complied with the concession agreement. Therefore, the company has instructed its lawyers to study the details of this dispute and prepare a statement of defense,” it says.
Shares in Singtel closed flat at $2.15 on Nov 9.
