TOT has already informed Thailand’s sole satellite operator about the decision.

A Thaicom source said the company was prepared to deal with the TOT cancellation.

The TOT contract termination is expected to take effect next year, as under the contract TOT is obliged to give a year’s notice for any termination of the contract.

TOT leased the iPSTAR bandwidth to provide satellite broadband service in the local market on an exclusive basis for the period 2005 to 2012 and renewed the contract for another eight years until 2021.

However, the service has experienced tough competition from fibre optic broadband service operators and wireless broadband service operators, who have continued to rapidly expand network coverage nationwide.

TOT’s iPSTAR service mainly tapped local administrative organisations, but many of them have gradually stopped extending their contracts with TOT.

Providing iPSTAR bandwidth to customers has resulted in annual operating expenses of Bt680 million for TOT while revenue is only Bt400 million to Bt500 million.

TOT’s revenue slid to Bt47.898 billion in 2015 from Bt63.199 billion in 2014 and Bt87.132 billion in 2013. It suffered a loss of Bt5.686 billion in 2015, compared to a profit of Bt1.947 billion in 2014, and Bt4.413 billion in 2013.

The Thaicom source said that after the TOT contract termination, Thaicom would market the iPSTAR broadband service in Thailand on its own and mainly tap state agencies and educational institutions.

Thaicom will seek more foreign broadcaster as customers to offset the possible declining number of local broadcaster customers.

Thaicom’s share price last Friday closed at Bt22.10, unchanged from the day before.