Cat Board To Review Plan To Buy Hutchison Cdma Businesses

CAT board to review plan to buy Hutchison Telecom businesses

By TELECOM REPORTERS

THE NATION

Published on July 26, 2010

BANGKOK: -- The board of CAT Telecom has ordered the state agency's management to submit for its review the plan to buy the businesses in Thailand of Hong Kong's Hutchison Telecom, including the latter's Code Division Multiple Access (CDMA) 2000 1-x cellular network in 25 provinces.

Amnuay Premonwong, board director, made the remark on Friday.

At the same time CAT's labour union will ask the board to review the purchase plan, citing its high cost.

The previous CAT board approved the plan last December with a purchase budget of Bt7.5 billion, of which Bt7.2 billion was for the purchase of the CDMA network in 25 provinces, featuring 800 base stations, and the rest for costs related to the purchase process. The Cabinet gave its nod to the plan in April.

Recently the State Enterprise Policy Office (Sepo) gave its opinion that the budget of Bt7.5 billion was too high when compared to CAT's expenditure of Bt7.9 billion on the roll-out of its existing CDMA network in 51 provinces, totalling 1,600 base stations. Moreover, the price of the CDMA network in 25 provinces should be lower given depreciation, as it has operated for over 15 years.

CAT has run its own CDMA network in 51 provinces, while Hutchison-CAT Wireless Multimedia, its joint venture with Hutchison Telecom, has marketed the service under the Hutch brand on the separate CDMA network in 25 provinces. It has leased this network from BFKT, a wholly owned subsidiary of Hutchison Telecom.

CAT wants to take over the network to be merged with its network in 51 provinces, so that it can much more efficiently manage the two networks.

Hutchison Telecom has reportedly invested more than Bt30 billion on CDMA and related telecom businesses in Thailand over the years.

Amnuay added that the board also ordered CAT chief executive Jirayuth Rungsrithong to adjust the business strategy of CAT's CDMA service in the 51 province to boost customer numbers. Currently the service has around 400,000 subscribers.

-- The Nation 2010-07-26