Thai Minister Chuti To Meet CAT Board On True Deals

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Chuti to meet CAT board on True deals

By USANEE MONGKOLPORN

THE NATION

Information and Communications Technology Minister Chuti Krairiksh will call in the board of CAT Telecom on Monday to clarify all doubts surrounding deals CAT recently granted to True Group.

CAT senior executives have asked the minister to look into a number of aspects of the contracts, such as why they were granted so quickly and whether they should be regulated by the 1992 Public-Private Joint Venture Act.

CAT chief executive officer Jirayuth Rungsrithong said yesterday that CAT has more work to do on four contracts it granted to True Group's Real Move and Real Future on Thursday to jointly develop a nationwide 3G network.

Jirayuth's remark could raise eyebrows as the deals have already been signed. The CEO said the awarding of the contracts had to be rushed as True's exclusive rights to hold talks with Hutchison Telecom on buying its business here would end this month.

On Wednesday the Attorney General's Office (AGO) returned the draft contracts to CAT, suggesting revisions. The CAT executive committee discussed the drafts the same day, asking CAT management to revise the contracts as suggested by the AGO. However CAT management rushed to sign the contracts with True on Thursday morning.

According to DBS Vickers Securities (Thailand), True claimed the nationwide reseller contract with CAT was more profitable than the current 2G concession.

TrueMove is paying CAT 25 per cent of revenue as the concession fee, and this will rise to 30 per cent after October 2011.

Jirayuth has claimed a number of times that there is no need for the deals to be regulated by the 1992 Public-Private Joint Venture Act, given that they are not joint investments.

He said the board had already settled the doubts of some senior executives who wondered if the deals would really benefit CAT.

The CAT board meeting yesterday acknowledged the granting of the contracts, though four of 12 board directors were absent.

CAT has granted Real Move the right to oversee about 800,000 CAT customers on the Code Division Multiple Access (CDMA) 2000 1-x network in 25 provinces for two years, during which it will convert the network to 3G High Speed Packet Access (HSPA) technology. The company will share 20 per cent of service revenue with CAT.

Real Future will install HSPA equipment on CAT's two separate CDMA networks for CAT to lease and provide wholesale services over a 14-year contract. CAT will allow Real Move to resell HSPA services for 14 years.

The deals are linked to Real Move and Real Future's agreements to take over four Hutch subsidiaries in Thailand, including BFKT.

BFKT has leased the CDMA network in 25 provinces to Hutchison-CAT Wireless Multimedia, a joint venture between Hutch and CAT. CAT owns a separate CDMA network spanning 51 provinces.

-- The Nation 2011-01-29

[woodyleonhard]

I want to thank K. Usanee for this report. It's technically accurate, as best I can tell - cutting through a very complex situation. Refreshing.

This is good news for wireless Internet customers in Thailand.

True now owns the CDMA network in BKK & 21 provinces. They're going to convert it to HSPA. Makes sense. Raises three big questions:

1. What happens to the current CDMA/EV-DO customers in BKK & 21 provinces? Do they get discounts on HSPA equipment? (The cutover will probably be difficult. And it leaves a lot of questions open about CAT's few CDMA mobile phone customers.)

2. What happens to the CDMA network in the 51 other provinces? Will CAT (or someone else) convert that to HSPA as well?

3. Will all of this happen on the existing 850 MHz spectrum, or will it somehow carry over to 2.1 GHz, either now or in the near future?