365 Communication Co is crying foul over what it deems "unfair treatment" by TOT Plc in terminating its third-generation (3G) service agreement under the mobile virtual network operator (MVNO) model.
Chief executive Surin Ritteepamorn said TOT could not just scrap the agreement that allows 365 Communication to provide 3G service before the agreement expires without a good reason.
The company signed a four-year memorandum of understanding with TOT to provide the service on behalf of the state telecom.
Under the agreement, 365 will become TOT's contractor after the MoU expires next year.
But TOT had terminated the agreement with the company and cut the company off from TOT's 3G network on Oct 11.
TOT reasoned that 365 is mired in financial troubles and struggling with a lack of cash flow and high debts. The company also failed to place a guarantee of three million baht required for the purchase of each airtime allotment.
But Mr Surin said his company offered best returns to the state enterprise.
"All I can say is we have been discriminated against," he said. "We proposed paying 150 baht for a SIM card from TOT, almost triple what others pay."
An MVNO is a company that provides service but does not have its own mobile network.
Three years ago, TOT appointed five companies to be its MVNOs to provide 3G service on its 2100-megahertz spectrum on a year-on-year contract basis.
They are Samart I-Mobile, Loxley, IEC Technology, 365 Communication and M Consult Asia
Of the five, Samart I-Mobile is the most active.
TOT is on the verge of extending contract terms to give MVNOs longer service.
Mr Surin said he took the issue to the National Broadcasting and Telecommunications Commission, seeking business protection.
"We also plan to take legal action against TOT," he said.
A TOT executive, who asked not to be named, said the termination is inevitable as 365 failed to meet the state enterprise's requirement for the guarantee, disqualifying it from new contract signing.
The executive said TOT will handle 365's existing 2,000 customers by itself.
"We are sending SMSs asking them to get new SIM cards from us to continue service," said the source.
The executive also said 365 is setting up a subsidiary to act as a 3G MVNO of CAT Telecom as well.
An MVNO with attractive applications and content offerings could survive in the business when its subscriber base reaches 100,000, the source added.