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  • TelecomAsia to Invest More in Multimedia Unit
  • September 22, 1998 (BANGKOK) -- Cash-strapped TelecomAsia Corp. Plc. said it will invest 3.54 billion baht (US$84 million) in September to fund an expansion of Asia Multimedia Co., Ltd.
    Asia Multimedia is a subsidiary that is laying the cable backbone for much of Thailand's information superhighway.

    Originally, TelecomAsia, which has a 77 percent stake in the unit, was to have shared the burden of raising the funds with the Telephone Organization of Thailand (TOT), a state agency that holds the other 23 percent in the unit. But TOT, which licenses almost all of TelecomAsia's services, refused to put up any money, citing the budget constraints placed on it by a government austerity drive.

    As a result, TelecomAsia, through its Telecom Holding Co. unit, will fund the expansion alone, said Auyporn Tanlamia, senior vice president for accounting, in a statement to the stock exchange.

    After the sale of the new shares, TelecomAsia's stake in Asia Multimedia will increase to 90 percent, she said.

    The Asia Multimedia network is based on hybrid fiber-coaxial technology that can handle analog and digital transmissions and allow clients to offer cable TV, broadband Internet services, video conferencing, teleshopping, telebanking telemedicine, video-on-demand and a host of other services linking businesses and consumers. When complete in four years, it will be the most powerful telecommunications network in the country.

    Asia Multimedia aims to eventually link two million households in Bangkok with the fixed-line network, which already supports TelecomAsia's phone system and pay TV affiliate. The company is also courting operators of other telecoms infrastructure, including owners of satellite, microwave, wireless or wireline networks, to merge their systems with the Asia Multimedia network.

    When the Asia Multimedia venture was unveiled in late 1996, it drew criticism that the government had ceded a crucial segment of the country's telecom operations to private monopoly control.

    TelecomAsia, which has installed 2.6 million telephone lines in Bangkok since 1992 as part of a 25-year-long concession, is the only private supplier of fixed lines in the capital. By contrast, the government controls 1.7 million lines.

    TelecomAsia's finances deteriorated last July when the government allowed the baht to float, causing it to drop a third in value in just two moths. Demand for phone lines has also plunged as Thailand fell into its first recession in 30 years. Subscribers have only taken up half of the 2.6 million lines.

    Apart from the CP Group, Bell Atlantic Corp. of the United States is the main shareholder through its Nynex Corp. unit, which provided much of the company's equipment.

    (Chris Burslem, Asia BizTech Correspondent)

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    Updated: Mon Sep 21 19:31:07 1998 PDT