Bangkok Post (5 November 2007)
CAT Telecom has rejected an offer by TOT Plc to take over its 42% stake in joint venture Thai Mobile in exchange for 2.4 billion baht.
Col Natee Sukalrat, the TOT board spokesman, said CAT had told the TOT board that it still wanted to participate in the Thai Mobile service.
He said that CAT did not provide details on how it would help TOT to revive the moribund cellular joint venture, which has about 60,000 customers in a mobile market of nearly 48 million.
Infighting between the two state telecom enterprises has been blamed for Thai Mobile's failure to gain a foothold in the five years since it was created.
Thai Mobile currently has accumulated debts of more than one billion baht owed to Samart I-Mobile.
It has also failed to tap the potential of the frequency it owns for third generation service (3G), which is now expected to be delayed until the next government.
Col Natee said that CAT had given no indication that it would provide new funds to operate Thai Mobile in case it needed to expand in the future.
Under such a scenario, Thai Mobile needed to look for new partners and funds in case of expansion, he said, adding that CAT's shareholding would have to be diluted.
Col Natee said Thai Mobile in the future might be an administrator of the 1900-2000 Megahertz bandwidth, which could be used to provide 3G services, while private companies could join as network investors.
In any case, he said, the mobile business would no longer be a core business of TOT as broadband services have a brighter prospect.
However, TOT could not overlook mobile phones and 3G services.
At its peak Thai Mobile had 240,000 customers but its debts now total six billion baht including the one billion owed to Samart I Mobile, which was contracted to provide a call centre and billing services.
TOT has tried to help improve Thai Mobile's finances by negotiating a 50% reduction from Advanced Info Service, the cellular market leader, in nationwide roaming charges.
A source said TOT had also negotiated with IEC and BlissTel on handset distribution and marketing promotions.
TOT has said it would accept a government-to-government joint venture in a 3G network, in which a Chinese enterprise has expressed interest.
TOT has sought approval from the Finance Ministry for 14-17 billion baht in loans for expansion if the 3G plan goes ahead.
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