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Flawed Billing System Costs TOT Billions

Posted on: Wednesday, 3 May 2006, 12:00 CDT

By Komsan Tortermvasana, Bangkok Post, Thailand

May 2--Problems with its year-old billing system could cost TOT Plc "billions of baht" in future losses and opportunity costs, according to company executives.

The system was introduced in April 2005 and developed by the local service provider Telemetics under a 1.2-billion-baht, five-year contract. It has been plagued with problems, resulting in billing delays and complaints from customers and staff alike.

The state-owned TOT is considering hiring a Singaporean software developer to help review the system after Telemetics reported that it was facing cash flow problems that had hindered its ability to address system weaknesses.

The Telemetics project has proved controversial from the start. TOT union members opposed the project due to conflicts of interest involving the company and consultants that drafted the bid conditions. Telemetics also has other conflicts as a result of an ownership structure tied to former TOT officials.

UCEC, a consultancy established by a group of Chulalongkorn University engineers, was paid six million baht to draft the terms of reference for the billing on the billing project.

TOT union leaders say that one major shareholder of UCEC was Ongarn Intarampan, who also held shares in a separate company called System Adviser Group, together with Wisal and Pacharee Niranatkomol. Both Mr Wisal and Mrs Pacharee are also major shareholders in Telemetics.

TOT executives say the new system failed to track seven million calls from more than 70,000 numbers for which call data records have gone missing. Most of the numbers were held by large corporate customers.

Problems in tracking calls led the Auditor-General's Office to reject the TOT's 2005 financial statements pending a review.

"Other problems with the system include duplicate bill collections, mostly related to mobile-phone services, long-distance and international call services, as well as problems tracking audiotext services," said the TOT executive, who asked not to be named.

"We can't initiate new services until the billing system is fixed."

The company might have to bring in new consultants to review the entire project as Telemetics itself lacks the resources and staff to address the problem.

"Basically, the entire system has proven to be a failure," the TOT executive said.

"The legal department has since directed all of our customer service offices nationwide to review their bill collections. We expect that bad debt, however, will jump sharply due to the problems."

The TOT has fined Telemetics 149 million baht for the system failures, a sum that one TOT union official said was a "pittance" when compared with the overall size of the project and the losses incurred in terms of call revenues and lost business.

Under the contract, the TOT is obliged to pay Telemetics 19 million baht per month to run the billing service. Despite the problems faced to date, TOT executives say terminating the contract would be impossible as it would result in the collapse of the company's entire billing system.

The TOT board recently relieved Chaichaweng Kittiyakhom, a senior executive vice-president, of his duties in overseeing IT systems due to the problems. Mr Chaichaweng was also chairman of the bid committee that awarded the contract to Telemetics.

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Copyright (c) 2006, Bangkok Post, Thailand

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Source: Bangkok Post

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