ICT Ministry To Examine CAT's Bt230 Bn Plan

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ICT Ministry to examine CAT's Bt230 bn plan

By Usanee Mongkolporn

The Nation

14-year investment targets development of 3G wireless broadband service

The Information and Communications Technology Ministry will seek clarification from CAT Telecom's board and its executive team on the state agency's plan to spend Bt229.468 billion in the next 14 years on development of the 3G wireless broadband service project nationwide.

ICT Ministry permanent secretary Jirawan Boonperm said recently that the ministry had to examine the investment plan thoroughly to ensure maximum returns on investment.

CAT plans to spend Bt229.468 billion from this year until 2025 on the project. The sum includes Bt12.911 billion as capital expenditure and another Bt216.557 billion as network leasing payment.

Of the total capital expenditure, Bt10.331 billion will be spent on building telecom towers, Bt1.724 billion on expansion of core network, while Bt856 million will be cash reserve. CAT will use its own cash flow to finance this plan.

Of the Bt216.557 billion for network leasing, Bt139.551 billion will be for leasing 3G-High Speed Packet Access (HSPA) base station equipment from True Group, Bt856 million for leasing a telecom tower from True Group's BFKT (Thailand), and another Bt76.923 billion for leasing telecom towers from other network providers. The network leasing is estimated to yield total revenue of Bt280.125 billion to CAT through the 14 years.

Part of the network lease is in connection with deals CAT signed with True Corp subsidiaries, Real Future and Real Move, in January to develop the 3G-HSPA service nationwide. The deals will see CAT leasing Real Future's BFKT equipment to wholesale 3G service for 14 years. Real Move will lease CAT's 3G capacity to resell the service for 14 years. The state agency will also allocate part of the wholesale capacity to offer its own retail 3G service.

UNDER SCRUTINY

CAT chief executive officer Jirayuth Rungsrithong once said CAT would lease the networks for wholesale service in response to actual demand of resellers. If there is a little demand, it will not have to spend much on leasing the networks.

CAT has submitted this investment plan to be considered by both the ministry and the National Economic and Social Development Board (NESDB). However, the NESDB has yet to approve the investment, pending the ministry's opinion on the project.

The NESDB was also waiting to find out from the Finance Ministry if the investment had to comply with the 1992 Public-Private Joint Venture Act.

ICT Minister Chuti Krairiksh last month said he was not opposed to CAT's plan.

The CAT-True 3G deals raised questions if they complied with the Public-Private Joint Venture Act and the Frequency Allocation Act. Later the Office of the Auditor-General stepped in to probe the deal's legitimacy. The National Telecommu-nications Commission (NTC) will also examine if the deals contradict its wholesale-resale and market competition regulations.

-- The Nation 2011-06-20