ADVANC Settles the 2G Equipment Dispute with TOT by Paying ฿680m with ฿559m in Provision

Advanced Info Service Public Company Limited (ADVANC) has announced that on 25 September 2019, Advanced Wireless Network Company Limited (AWN), ADVANC’s subsidiaries, has entered into the dispute settlement and purchase agreement of 2G equipment with TOT Public Company Limited (TOT).

 

TOT and AWN agree to settle the dispute regarding the 2G telecommunication equipment which TOT claims for compensation upon AWN’s use of 2G equipment during the period of October 2015 to June 2016 subject to the black case no. 456/2560. As a result, TOT agrees not to initiate a further claim for damages regarding this dispute.

Also, AWN agrees to pay for the claim as requested by TOT including interest charge in a total of 680 million baht. Of the amount, ADVANC has already provisioned 559 million baht in the financial statements from October 2015 to June 2016.

 

AWN agrees to purchase such 2G telecommunication equipment from TOT to continue using some parts which are able to interoperate with 3G and 4G network, and also pays for the use of such equipment during July to August 2019 in total amount 250 million baht.

The transaction is not a related party transaction and considered an acquisition of an asset, when including the total value of the past six months transaction, equivalent to 0.09% of total asset of the consolidated financial statement of ADVANCas of 30 June 2019.

Since July 2015, AWN has been paying for the use of 2G equipment to TOT at 167 million baht per month. With the purchase agreement, AWN effectively discontinues to pay such fee from September 2019 onward.

 

This dispute settlement and purchase agreement is based on the reason that the change in technology causes 2G equipment to become obsolete. Additionally, the National Broadcasting and Telecommunication Commission (NBTC) tends to announce for termination of 2G service in the near future. Hence, AWN has a limited need to continue using the 2G equipment.