CAT Hands True 3G Windfall

[webfact]

CAT hands True 3G windfall

By Usanee Mongkolporn

The Nation

State firm denies any breach of regulations in awarding deals; court rejects plea for stay on TOT's 3G auction today

The 3G-licensing saga took a new twist yesterday with True Corp becoming the sole operator to be awarded the rights to a 3G-service roll-out.

Meanwhile, the future of other private operators hinges on TOT's e-auction for the 3G2.1GHz network today after the Central Administrative Court last night rejected the petition by the disqualified Ericsson-led consortium for a stay on the auction.

CAT Telecom yesterday awarded deals to two of True Corp's wholly owned subsidiaries for joint development of the 3G wireless broadband services nationwide.

The partnership paves the way for CAT-True to take the lead in providing 3G service and will come as a relief to True.

True's concession with CAT will end in 2013, forcing it to urgently seek deals to sustain its mobile-phone business.

Operating profit

The CAT deals will also enable True's wireless business led by TrueMove to report an operating profit for the first time in the next few years, True CEO Supachai Chearavanont told a press conference.

The only obstacles to that are lingering legal doubts concerning the cancellation of CAT's purchase of Hutchison Telecom's Thai operations, the emergence of True as the potential buyer, and the joint development deal between CAT and True. Given that all of this took place after the National Telecommunications Commission's 3G auction was abruptly suspended last September, questions have been raised over whether the process is entirely legal.

CAT and True executives yesterday expressed their shared view that the deal did not contradict any laws.

CAT senior executives have already submitted a request to the ICT Ministry to consider if the joint development needs to be regulated by the 1992 Public-Private Joint Venture Act.

CAT chief executive officer Jirayuth Rungsrithong believes this will not be necessary, saying the project is not a joint venture.

Both Supachai and Jirayuth had reasons for wanting the deal to be concluded quickly.

'No change in deals'

The former said that the deals with CAT must be clinched this month, as the exclusive rights for True subsidiaries Real Move and Real Future to buy four Hutchison subsidiaries in Thailand, including BFKT, will end.

He said he did not expect any change to the deals, even after the election.

Jirayuth said that the rush is necessary, to stop CAT Code Division Multiple Access (CDMA) business from further bleeding. The business has suffered loss of Bt1 billion every year, due to the complication in the business structure.

The chief said that instead of loss, CDMA would generate Bt2 billion in annual revenue. CAT staff, however, raised doubts about the chief's projection.

The deals would be submitted to the board of directors for acknowledgement today, Jirayuth said. Though the board had just approved the agency's 3G business plan last week, Jirayuth claimed that the board allowed the management to sign the deals once the document is ready.

12 contracts

Both CAT and True signed 12

contracts yesterday, starting at 7.45am.

After the signing, Real Move will oversee 800,000 customers of CAT on its CDMA network in 25 provinces for two years, during which CAT will convert the network to 3G-High Speed Packet Access (HSPA) technology. The CDMA network has generated around Bt4.3 billion revenue per year with expenses of Bt3.8 billion.

Supachai said Real Future would spend between Bt5 billion to Bt6 billion on installing the 3G-HSPA radio-active equipment on CAT's two separate CDMA networks nationwide. Then CAT will lease such HSPA equipment from

Real Future to provide wholesale service.

True chief finance officer Noppadol Dej-udom said that True would break even from this investment within 6-7 years.

The planned HSPA network is expected to draw 2 million customers within two years, of which the first group will be existing customers on the CDMA network in 25 provinces.

CAT also granted the deal to Real Move to resell the planned HSPA service for 14 years. While CAT and True executives declined to specify the details of the deal, Supachai said Real Move could offer the service to customers at a reasonable price based on the effective cost.

Meanwhile, Supachai assured about 1,000 employees of Hutchison yesterday that they would not be laid off after the takeover.

At a glance

Details of the four main contracts CAT granted to Real Move and Real Future yesterday.

- Real Move to oversee about 800,000 CAT customers on the CDMA network in 25 provinces for two years, during which time it will share 20 per cent of the revenue from the CDMA cellular service with CAT.

- Real Future to install HSPA equipment on the two CDMA networks nationwide.

- CAT will lease from Real Future the HSPA equipment to provide a wholesale 3G service.

- Real Move will resell the HSPA service for 14 years. CAT and True declined to specify further details.

-- The Nation 2011-01-28

[selftaopath]

So what will this mean to the rural communities? Will adequate internet connections be made available throughout Thailand, or will this merely give urban dwellers better service than they already have?

[katasyd]

Great.

So there is no competition for these services and we are at the mercy of True.

If it's anything like they run UBC, i won't bother and i'll stick with edge data connection of AIS.

[Crash999]

Wasn't there supposed to be an auction or bidding process taking place?

[woodyleonhard]

Sorry, but I don't understand what's going on.

The True buy-out of Hutch was for 850 MHz only. Converting the CDMA system to HSPA makes a lot of sense, as I've written here before. But it does leave current CDMA (EV-DO) users in the lurch, not only in the central 25 provinces, but also for those of us living in areas covered by CAT-only (not Hutch) EV-DO.

I was under the impression that the 2.1 GHz spectrum could not be auctioned off until the government appointed a new board.

How can TOT be auctioning off 2.1GHz spectrum? Doesn't make sense to me.

Does anybody have the real story?

[KKK]

Seems like the CAT has just created a monopoly for 3G...

[animatic]

Utterly ridiculous outcome. If you have DTAC, then you must drop it and take true for your smart phone, and they can charge whatever they like. No obvious bidding or competition for the contract. Not of course done in time to beat 4G coming to fruition all around Thailands neighborhood.

[jayjay0]

I don't pretend to understand it all.

To me it looks like out and out coru tion.

Correct me if I am wrong. Did the Government just allow only one company in all of Thailand the rights to 3G. Legally stopping competition. Is there any assurances that the 3G will be equally for all of Thailand.

What if a company came in with 4G for all of Thailand?

Would the government say no we are not ready for that stay in Cambodia they are ready for it.

[AgentSmith]

Where Thailand is still struggling to unroll 3G nationwide other countries are already on the verge of having full LTE coverage of which the faster variant is allowed to be called 4G. That means speeds of 100 Mbps or higher... on your mobile phone! Ok I don't need a wideband connection on the road but it does make you think what is going on in this country. LTE is a relatively cheap technology so I don't get why they still bother to place UMTS transmitters while LTE is only slightly more expensive. It also supports UMTS and is much more ready for the future.

[hammered]

Is this the 850 network that most phones dont work on? Or is it the 900/2100 network?

[jfchandler]

I too am confused what to make of this news report, and even moreso the process that the various Thai govt. agencies are following... if there actually is any process..

As best as I can decipher it, the deals mentioned here in this thread seem to relate entirely to True running a future 3G CDMA network in conjunction with CAT. I saw absolutely no mention of the GSM variety of 3G mentioned here...

Then separately, apparently, TOT is now proceeding with its plan to auction off the right to operate an entirely different 3G network on its 2100 Mhz band for GSM phones...

I can't tell at all what this supposed CAT-True deal means for True's existing 3G service for GSM users on its 850Mhz band, which is already operating in Bangkok and several other tourist areas.

[Payboy]

In other news, Samart has just won the 3G auction carried out by TOT.

Curioser and curioser.

[MaiChai]

The government monopolies missed the boat with the mobile revolution and thus they are ensuring they dont miss it with 3g.

So they control the situation, and because they are unable to run it themselves they get a commercial company to run it and keep most of the revenue? So they sit back and just collect the profits? What an amazing country; true democracy in operation! Did you average Thai have any say in how this is setup?

I am glad i am a guest here and not a citizen!

Funny how the Tot auction was won so quickly?

Edited January 28, 2011 by MaiChai

[jfchandler]

If I understand these things right, Samart is pretty much the same as I-Mobile, which already is a MVNO (mobile virtual network operator) for TOT and its 2100 Mhz 3G service.

In other news, Samart has just won the 3G auction carried out by TOT.

Curioser and curioser.

[jybkk]

Sorry, but I don't understand what's going on.

The True buy-out of Hutch was for 850 MHz only. Converting the CDMA system to HSPA makes a lot of sense, as I've written here before. But it does leave current CDMA (EV-DO) users in the lurch, not only in the central 25 provinces, but also for those of us living in areas covered by CAT-only (not Hutch) EV-DO.

I was under the impression that the 2.1 GHz spectrum could not be auctioned off until the government appointed a new board.

How can TOT be auctioning off 2.1GHz spectrum? Doesn't make sense to me.

Does anybody have the real story?

It is a little known fact, but TOT, as a state owned company already has a licence on 2.1GHz spectrum.

They already operate it but only on a few cells around Bangkok.

The purpose of this morning's bidding was to decide which of the 4 major mobile Network manufacturers will get to expand this 3G network.

Because of the size of this kind of projecs, bidders are Consortiums regrouping the international manufacturers and local companie. In this case the bidders were:

• SL Consortium: Loxley, Samart, Nokia Siemens Networks, and Huawei Technologies
• AU Consortium: Advanced Information Technology, Alcatel-Lucent and United Communication Industry.
• ZTE and Forth Corporation
• Ericsson and A.S. Associate Engineering

According the proposal offered by the bidders, the first phase of deployment would finish in April.

[jfchandler]

Well, actually, TOT's 3G service in BKK on the 2100 Mhz band isn't so "little known," especially to all the TV members who are current subscribers either thru TOT direct or thru its partner I-Mobile, including myself.

The main folks it seems to be "little known" to are the clueless newspaper reporters who keep talking about how this or that company or proposal will be the first or first and only 3G service in Thailand... When in fact, the TOT/IMobile 3G service in BKK has been running more than a year now, and True's 3G in BKK and other tourist areas on the 850 Mhz band has been up even longer than that.

And, regarding TOT, it's a bit more than "a few" cell sites around BKK... Actually, I believe TOT has a couple of hundred 3G sites around BKK, and obviously are looking to expand.

It is a little known fact, but TOT, as a state owned company already has a licence on 2.1GHz spectrum.

They already operate it but only on a few cells around Bangkok.

[jybkk]

Well, actually, TOT's 3G service in BKK on the 2100 Mhz band isn't so "little known," especially to all the TV members who are current subscribers either thru TOT direct or thru its partner I-Mobile, including myself.

The main folks it seems to be "little known" to are the clueless newspaper reporters who keep talking about how this or that company or proposal will be the first or first and only 3G service in Thailand... When in fact, the TOT/IMobile 3G service in BKK has been running more than a year now, and True's 3G in BKK and other tourist areas on the 850 Mhz band has been up even longer than that.

And, regarding TOT, it's a bit more than "a few" cell sites around BKK... Actually, I believe TOT has a couple of hundred 3G sites around BKK, and obviously are looking to expand.

It is a little known fact, but TOT, as a state owned company already has a licence on 2.1GHz spectrum.

They already operate it but only on a few cells around Bangkok.

You are right, TOT has a couple hundred cell sites around BKK. You can even see them here (as well as the coverage)

http://www.i-bkk.com/ilocation/viewer/

But for a city like Bangkok this is quite a small number and it can only accomodate a relatively small number of users. That's probably the reason why they don't advertise it so much.

They clearly are planning to expand and start offering these services to a much bigger number of customers. They will very probably open this expanded Network to additional MVNOs, including MVNOs controlled by current operators like True or Dtac.

This is a pretty good news for those looking for a "real" 3G offer and network in Thailand.

[jfchandler]

I haven't seen a lot of direct advertising from TOT re their 3G service in BKK...

But I-Mobile has done quite a bit...and especially when they launched the service a year ago December...

If you go into one of their shops in the malls in BKK and such, they usually have a lot of posters and signage up re 3G...

BTW, thanks for the link to the map of TOT's 3G coverage areas... I hadn't seen or known of that before...

It looks like they've done a pretty good job of covering the Sukhumvit corridor...

Edited January 28, 2011 by jfchandler

[Derifo]

I don't pretend to understand it all.

To me it looks like out and out coru tion.

Correct me if I am wrong. Did the Government just allow only one company in all of Thailand the rights to 3G. Legally stopping competition. Is there any assurances that the 3G will be equally for all of Thailand.

What if a company came in with 4G for all of Thailand?

Would the government say no we are not ready for that stay in Cambodia they are ready for it.

The company will first need to get approval from both TOT and CAT unions and a license.

[jfchandler]

As best as I can decipher it, the deals mentioned here in this thread seem to relate entirely to True running a future 3G CDMA network in conjunction with CAT. I saw absolutely no mention of the GSM variety of 3G mentioned here...

Well, I guess my presumption above was wrong...

The Nation article about the True-CAT deal refers to them developing future HSPA service... Sometimes, I get lost in the alphabet soup of all these acronyms... But upon checking, HSPA (I gather) is a newer, higher speed 3G version of the original UMTS standard on the general GSM platform... not CDMA...

So then, apparently, the plan calls for True to acquire the Hutchinson CDMA sites and repurpose them into expanding their current 3G GSM platform beyond its current service areas in just Bangkok, Pattaya, Phuket, etc...

Another of the media outlets reported the deal as follows:

True Move and state-owned CAT Telecom yesterday signed a deal to develop a Code Division Multiple Access (CDMA) network into a High-Speed Packet Access (HSPA) network.

Both firms wanted to provide 3G mobile services quickly by turning 3,000 CDMA base stations nationwide to HSPA base stations by the end of this year.

So, HSPA is synonymous with 3G on the GSM platform... 3G on the CDMA platform (I gather) is often referred to as EVDO...

[woodyleonhard]

I too am confused what to make of this news report, and even moreso the process that the various Thai govt. agencies are following... if there actually is any process..

As best as I can decipher it, the deals mentioned here in this thread seem to relate entirely to True running a future 3G CDMA network in conjunction with CAT. I saw absolutely no mention of the GSM variety of 3G mentioned here...

Then separately, apparently, TOT is now proceeding with its plan to auction off the right to operate an entirely different 3G network on its 2100 Mhz band for GSM phones...

I can't tell at all what this supposed CAT-True deal means for True's existing 3G service for GSM users on its 850Mhz band, which is already operating in Bangkok and several other tourist areas.

You've hit the nail on the head. TOT doesn't HAVE 2.1 GHz spectrum. Nobody does. (UPDATE: see my next post - I maybe wrong!)

Methinks this article is all mixed up. It'll be interesting to see what the news says tomorrow.

The fallout is complicated, too, as you note - if True's going to take over Hutch's CDMA network (which appears to be a done deal), will they be installing HSPA on 850 MHz, or will they wait six months and get LTE on 850 MHz or... or.... ? And what happens to the CDMA network in the upcountry provinces?

Edited January 28, 2011 by woodyleonhard

[woodyleonhard]

So, HSPA is synonymous with 3G on the GSM platform... 3G on the CDMA platform (I gather) is often referred to as EVDO...

Fascinating! I didn't know that TOT had authorization to run on the 2.1 GHz spectrum. Thank you, jybkk! You guys in Bangkok get all the juicy stuff. <grin>

Seriously, here's what's confusing you, jfc. Let me take this from slow to fast:

GPRS/EDGE = the old wireless Internet access that you can get on almost any phone, from any of the wireless phone carriers. Let's call it 0.2 Mbps international download, at least in Phuket. Only on 850 MHz. (Most people call this "2G" but I hate to use the "G" naming system because anybody can claim anything is any "G"!)

CDMA EV-DO = it's been available for a few years, only from Hutch in the 21 provinces near BKK. Only from CAT in the other provinces. Considerably faster, 1 to 1.5 Mbps. Good coverage. Only on 850 MHz. (I've seen this referred to as "3G" but it isn't, really. More like "2.5G" or something along those lines.)

HSPA = it's been available in Thailand, as far as I know, for a year or so, and the service is always called "pilot" or "experimental" or something similar. Good speed: I've clocked it at 2 Mbps to 5 Mbps international download, here in Phuket. Both TOT and CAT have towers. True and DTAC run their iPhone service off of the CAT towers. Apparently there are many towers in BKK proper, with good reception over much of the city. In Phuket, there are only 8 towers, they all belong to CAT, and they're on the west coast of the island. Until ten minutes ago, I thought HSPA was only available in Thailand at 850 MHz. I may be wrong.

LTE = not yet available in Thailand. Runs considerably faster, say 20 Mbps (although speeds vary considerably in the US and Europe).

@jybkk, are the towers in the map at 850 MHz or 2.1 GHz?

When the government advertised they were auction off "3G" spectrum, they were selling 2.1 GHz frequencies, presumably (although not necessarily) for HSPA systems.

Edited January 28, 2011 by woodyleonhard

[jfchandler]

Woody, you quoted my prior post where I made a wrong assumption...

My latter post was, I believe, the correct interpretation, to wit:

So then, apparently, the plan calls for True to acquire the Hutchinson CDMA sites and repurpose them into expanding their current 3G GSM platform beyond its current service areas in just Bangkok, Pattaya, Phuket, etc...

I'd assume that means True will try to expand the existing 3G service they already run in BKK and a few other cities on the 850 Mhz band for GSM phones.

But I believe you're wrong about TOT. As you and I have discussed before, TOT does indeed already have 3G service on the 2100 Mhz band running quite well in BKK, though nowhere else at present. In parallel fashion, the deal TOT announced today by choosing the Samart consortium is aimed at expanding their 3G service on the 2100 Mhz band for GSM...

I've never used CDMA phones in Thailand or elsewhere, so I have little knowledge on that subject. But I think you raise a good question. If True is going to repurpose Hutchinson's CDMA sites for use on their expanded HSPA network, who's going to be providing CDMA service, regular or 3G, for CDMA phone users upcountry?

For the time being, it would seem prudent advice that people planning to get new mobile phones look for models that can handle 3G on both the 850 and 2100 Mhz bands... It seems there are now two horses (CAT/True and TOT/Samart) in the 3G race, and I'll be darned if I have the slightest clue how it's all going to wash out in the end.

By the way, where does all this leave DTAC and our friends at AIS and their foreign overlords???

You've hit the nail on the head. TOT doesn't HAVE 2.1 GHz spectrum. Nobody does.

The fallout is complicated, too, as you note - if True's going to take over Hutch's CDMA network (which appears to be a done deal), will they be installing HSPA on 850 MHz, or will they wait six months and get LTE on 850 MHz or... or.... ? And what happens to the CDMA network in the upcountry provinces?

[jfchandler]

Woody, to the best of my knowledge, the map of TOT's 3G cell sites around Bangkok would reflect the 2100 Mhz band their 3G service runs on.

@jybkk, are the towers in the map at 850 MHz or 2.1 GHz?

When the government advertised they were auction off "3G" spectrum, they were selling 2.1 GHz frequencies, presumably (although not necessarily) for HSPA systems.

[selftaopath]

Sorry, but I don't understand what's going on.

The True buy-out of Hutch was for 850 MHz only. Converting the CDMA system to HSPA makes a lot of sense, as I've written here before. But it does leave current CDMA (EV-DO) users in the lurch, not only in the central 25 provinces, but also for those of us living in areas covered by CAT-only (not Hutch) EV-DO.

I was under the impression that the 2.1 GHz spectrum could not be auctioned off until the government appointed a new board.

How can TOT be auctioning off 2.1GHz spectrum? Doesn't make sense to me.

Does anybody have the real story?

I'm with you. The way this country does things confuses the hell outta me. I guess I'm cognitively inept.

[selftaopath]

Where Thailand is still struggling to unroll 3G nationwide other countries are already on the verge of having full LTE coverage of which the faster variant is allowed to be called 4G. That means speeds of 100 Mbps or higher... on your mobile phone! Ok I don't need a wideband connection on the road but it does make you think what is going on in this country. LTE is a relatively cheap technology so I don't get why they still bother to place UMTS transmitters while LTE is only slightly more expensive. It also supports UMTS and is much more ready for the future.

Maybe because somebody's cousin/uncle/brother owns a construction company that corrects/builds/rents out the transmitters etc. Nothing but corruption and greed allows for practically all decisions in Land of Scams.

[woodyleonhard]

Woody, to the best of my knowledge, the map of TOT's 3G cell sites around Bangkok would reflect the 2100 Mhz band their 3G service runs on.

OK, I'm still confused.

I thought True's HSPA service in BKK (and in Phuket) was almost entirely 850 MHz. (Actually, until a few hours ago I thought it was exclusively 850 MHz.)

You're right about converting CDMA/EV-DO to HSPA. A friend of mine tells me that it's a rather easy (read: cheap) change. There's another thread on that subject.

You're also right about getting phones that run HSPA at both 850 MHz and 2.1 GHz. I would throw in the added caution that right now is not a very good time to be buying EV-DO equipment, especially not from Hutch.

[woodyleonhard]

Where Thailand is still struggling to unroll 3G nationwide other countries are already on the verge of having full LTE coverage of which the faster variant is allowed to be called 4G. That means speeds of 100 Mbps or higher... on your mobile phone! Ok I don't need a wideband connection on the road but it does make you think what is going on in this country. LTE is a relatively cheap technology so I don't get why they still bother to place UMTS transmitters while LTE is only slightly more expensive. It also supports UMTS and is much more ready for the future.

Maybe because somebody's cousin/uncle/brother owns a construction company that corrects/builds/rents out the transmitters etc. Nothing but corruption and greed allows for practically all decisions in Land of Scams.

More likely it's because LTE technology is still very new. Commercial rollout of LTE only started last year in the U.S.

That said, LTE would be a smarter choice at 2.1 GHz, but I don't know if LTE at 850 MHz is such a good idea.

I think my brain is frying.

I'm not so cynical about corruption in the 3G wars. Clearly, Thailand's pulling itself out of a horribly corrupt telecoms cesspool. But I don't see so much corruption right now. Mostly it appears to me to be jockeying around existing laws, with every organization out to get the biggest slice of the pie - a description that applies to most telecom battles around the world. Before there was a giant sucking noise, with one person and his organization taking all of the money. Now it's more like every organism for itself. Complicated, but not nearly so corrupt.

[jfchandler]

TOT Awards $530 Million 3G Contract to Nokia Siemens Networks and Huawei

By: Ian Mansfield | 28th Jan 2011: 12:43pm ­Thailand's Samart Corp. has won the bidding to build TOT's forthcoming 3G network following a public auction. The action was nearly delayed after protests from Ericsson who claimed they had been unfairly dismissed from bidding, but a court order last night permitted it to go ahead.

The reserve bid for the network tender was set at 17.440 billion baht, and there were 17 bids during the auction.

The Samart consortium - which is made up of Samart, Loxley, Nokia Siemens Networks and Huawei - won with a minimum bid of Bt16.29 billion (US$527 million), which was 6.59 percent below the reserve price. The formal contract is expected to be signed next month with a limited service launch from April.

The state-owned TOT will then expand its 3G coverage of over 5,000 base stations nationwide within this year.

Cellular News

http://www.cellular-news.com/story/47628.php

[jfchandler]

Woody, it seems like you're mixing up True and TOT.

AFAIK, True's 3G service for GSM phones runs on the 850 Mhz band everywhere they offer 3G for GSM.

TOT's 3G service runs on the 2100 Mhz band for GSM phones in BKK, the only place they currently offer 3G for GSM.

The 3G cell site coverage map posted above showed the 3G coverage areas for TOT's 3G network in BKK.

I thought True's HSPA service in BKK (and in Phuket) was almost entirely 850 MHz. (Actually, until a few hours ago I thought it was exclusively 850 MHz.)