3G Deal With Real Move Will Enable CAT To Gain Bt14 Billion

[webfact]

3G deal with Real Move will enable CAT to gain Bt14 bn

By USANEE MONGKOLPORN

THE NATION

CAT Telecom is estimated to gain at least Bt14 billion in revenue from leasing the planned wholesale 3G service capacity to True Corp's Real Move throughout the 14-year contract term, a CAT source said.

The source added that the figure is based on CAT's estimation of the net present value of the planned 3G-High Speed Packet Access (HSPA) wholesale service capacity business.

CAT will lease the planned HSPA network from BKFT (Thailand) of True's subsidiary Real Future. Then CAT will mark up between 20 per cent to 22 per cent on this network leasing fee as the price of the wholesale capacity it will lease to Real Move, the CAT source added.

True's chief executive officer Supachai Chearavanont said CAT would gain more benefits from the 3G partnership with True than if CAT opts to do this business on its own.

According to the wholesale-resale deal, Real Move can lease a maximum of 80 per cent of the planned HSPA nationwide network capacity during the first three years for resale. CAT will resell the remaining amount on its own and sell it as wholesale to other resellers.

Supachai said True's cellular flagship company TrueMove would migrate heavy mobile data users to the upcoming HSPA network. They are still mulling options for heavy voice users. He said that once TrueMove's concession ends in 2013, it will have to return 1,800MHz spectrum to the National Broadcasting and Telecomm-unications Commission (NBTC) and TrueMove might have to bid for the 1,800MHz spectrum licence from the NBTC to continue to provide service.

He said the 15MHz bandwidth of the 850MHz spectrum that CAT would allocate to Real Move to provide HSPA service might not be enough to serve the |heavy-data customers in the long term.

The four main contracts CAT granted to True subsidiaries Real Move and Real Future on January 27 marked their partnership in the HSPA service but at the same time raised doubts about their legitimacy.

Some contracts contain the clause that if they are later found invalid or breach any law, the contractual parties will jointly make the efforts to correct them.

Supachai said that this clause was added due to concerns that the contracts might breach any upcoming NBTC regulations. He denied that it reflects concern that the contracts might contradict the 1992 Public-Private Joint Venture Act.

He said he had learned after signing the contracts that the appendix parts of some contracts are blank pages.

Some appendix of some contracts on the signing date are blank pages, which state that the contractual parties will jointly finish the details as soon as possible after the contract signing.

Supachai admitted that now he feels uncertain if the True-CAT collaboration in the 3G service would be smooth, following a series of questions about its legitimacy. If the two 3G related deals fall through, he hopes True could keep the code division multiple access (CDMA) related deals.

Besides the HSPA network leasing and the service resale deals, CAT granted a deal to BFKT to lease the CDMA network in 25 provinces to CAT. It also granted a deal to Real Move's Hutchison-CAT Wireless Multi-media to market the service on such network.

The Office of the Auditor-General last week advised the CAT board to either review the 3G service project or answer all of its doubts regarding the legitimacy of the deals.

-- The Nation 2011-02-14

[exbelg]

i am a bit confused... they promote 3g (iphone and stuff) but in fact, there is no 3g network in thailand yet right ?

[BlackJack]

So where does this leave the consumer

[Thai at Heart]

I notice they say "gain" not earn. I love how no one points out that this 14bn baht will be paid by us.

Essentially, they get paid for doing nothing. It will be interesting to see what percentage of this 14bn gets re-invested back into the network and then how much of it gets returned to central government. Private/Public mess.

Edited February 14, 2011 by Thai at Heart

[InterestedObserver]

i am a bit confused... they promote 3g (iphone and stuff) but in fact, there is no 3g network in thailand yet right ?

Correct, Thailand has no nationwide 3G network.

[user82374298374]

OK, so let me get this straight:

One subsidiary of True are presumably going to build a 3G network.

They're going to lease that network to CAT, who are going to mark up and sublease that same 3G network built by True to yet another subsidiary of True.

They've signed a contract to do this, but they don't know if it's legal or if it's a good deal, and they've left blank pages in the contract so that someone can fill in whatever he wants, later.

And they're admitting this publicly.

[RKASA]

GOOOOOOD MOOORRRNNNNING Thailand - OH! smell that coffee - hay whats this - why why its blank paper Oh gee - I found me a government contract too. Soon this will be as gold as a UBC package.

[BlackJack]

i find it truely amazing (pun intended) that True can publicly promote 3g on all its posters that go with iphone and 3g doesnt even exist

[jfchandler]

There is 3G service in Thailand, mostly focused in Bangkok and a few other touristy areas, as cited above...

Both True and TOT/IMobile do a pretty good job of covering the Bangkok area, True on the 850 Mhz band and TOT/IMobile on the 2100 Mhz band....

At present, TOT has no 3G presence outside of Bangkok.... True's 3G service includes some other areas like Pattaya, Phuket and Chiang Mai....

True has been running their 3G "trial" service for a couple of years, whereas TOT's 3G service in BKK launched a bit more than a year ago.

DTAC had a small 3G trial in very very limited areas of BKK, but I'm not clear if that's still operating. AIS was planning to launch some 3G service on the 900 Mhz band, but I've never heard that that actually occurred anywhere.

All the wrangling going on now is over who's going to gain the rights to expand those services on a nationwide basis, and who's going to gain the long-term rights to do so, as opposed to only operating so-called "trials".

BTW, True used to offer its 3G service on an unlimited basis to its existing customers because it was a "trial." But lately, their 3G service now has become part of their formal mobile packages and there are either hour or MB download limits for 3G use on most of their plans.