CAT board approves sale

The Nation (11 January 2008)

State agency wants to focus on own CDMA service

The board of CAT Telecom has approved the state agency's plan to divest its shares in Thai Mobile to TOT, the other partner in the joint-venture cellular operator.

CAT owns 42 per cent of Thai Mobile, worth Bt2.4 billion, and TOT the rest.

Spokesman Piriya Siriboon said the agency wanted to focus on its own Code Division Multiple Access (CDMA) 2000 1-x cellular service.

As well as owning a CDMA network covering 51 provinces, CAT also holds a 26-per-cent stake in Hutchison-CAT, which markets a CDMA service via a different network covering 25 provinces.

CAT is still negotiating with Hutch's major shareholder, Hong Kong-based Hutchison Telecom, about a collaboration to bring the two CDMA networks together.

Piriya said the board would meet again on January 19 to discuss CAT's five-year business plan, which is aimed at improving the agency's operating efficiency. The plan will see CAT relying less on concession revenue.

Last year, CAT recorded unaudited revenue of Bt47.207 billion, of which Bt28.814 billion was concession revenue and the remaining Bt18.393 billion was operating revenue.

Its net profit last year was Bt12.130 billion. Of that, more than Bt11 billion was earned from concessions and the rest from business operations.

CAT president Phisal Jorphochaudom said the agency had a cash flow of Bt17 billion for new business development. It also had reserves of Bt4 billion to be paid to TOT for access charges.

He said the state agency would also urge Chinese telecom-equipment supplier Huawei Technologies to install its CDMA network completely in 51 provinces this month. After its completion, CAT plans to calculate the fine it will impose on Huawei for late delivery.

In 2005, Huawei quoted Bt7.2 billion to win the job to deploy 1,600 base stations in two phases of 800 each. Early last year, CAT's board decided to exercise a contract provision under which it could penalise the supplier at a rate of Bt90 million a day for late delivery.

Huawei says the dispute stems from different interpretations of the contract. Huawei believes it had to deliver the second phase by last January 26, which it did. It also believes a complementary high-speed software package was supposed to be completely installed in the network this year.

But CAT says the contract stipulates that the entire network had to be delivered last January.
After the conflict erupted, Huawei delivered the high-speed software package last November.
On Wednesday, Huawei disclosed that it had filed a petition with the Central Administrative Court, because CAT Telecom had yet to pay a second instalment amounting to 25 per cent of the total project value, which was due last February.

Phisal said CAT had yet to report Huawei's legal action to the board.

Meanwhile, Piriya said the CAT board had stated its preference for the interconnection-charge regulations introduced by the National Telecommunications Commission (NTC), rather than TOT's access-charge regulations.

The access charge is a payment CAT and its three private cellular concessionaires have made to TOT for routing their customers' calls to different networks via TOT's facilities.

The NTC introduced the interconnection regulations last year, requiring all operators to share voice and data revenue between networks involved in calls on a bilateral and proportionate basis.

CAT has already begun negotiations with cellular operators to fix bilateral interconnection-charge rates. However, the cellular operators have rejected CAT's offer to pay them an interconnection rate of 21 satang a minute, saying the rate was unacceptably low.

True Move seeks five-year extension to concession deal

The Nation (11 January 2008)

True Move has asked CAT Telecom to extend its concession contract by five years from 2013 to make it easier for the company when dealing with creditors and network suppliers for new investment.

CAT president Phisal Jorpochaudom said True Move had requested that the new term be on a network-leasing basis, instead of the current build-transfer-operate basis.

"It promises that its network-leasing fee will be the same as its current concession fee," he said yesterday.

True Move has shared 25 per cent of its revenue with CAT, its concession owner. If granted, the concession would expire in the same year as that of Total Access Communication (DTAC).

Phisal said True Move needed the concession extension to enable it to deal easily with creditors and network suppliers.

True Move is reportedly having to make a number of moves right now to ensure that, if it cannot get a new frequency licence from the National Telecommunications Commission (NTC), at least it will still have the CAT frequency to continue offering a service after the existing concession expires.

True Move informed the NTC on December 4 that it wanted to replace CAT in using certain bands on the 1800MHz and 800MHz spectra for commercial purposes. The bands are currently being used by DTAC.

True Move has 12 million customers and has mentioned many times that it wants additional frequencies to ease the congestion on its existing 12.5MHz of bandwidth in the 1,800MHz spectrum.

True Move also notified the NTC on December 14 that it wanted to replace CAT in owning bands of the 1800MHz spectrum being used by True Move itself.

CAT chairman Gen Montree Sungkasap said CAT had set up two committees, one to oversee True Move's request for a concession extension and another for the use of some CAT frequency bands. The board will convene on the two cases on January 19.

CAT spokesman Air Vice Marshal Piriya Siriboon said that CAT and DTAC would defend their right to own the targeted frequency bands.

"We'll assign legal staff to examine whether it is legally possible to take over our frequency bands and if there is a legal basis that can protect us," he said.

Advanced Info Service also informed the NTC on December 25 that it wanted to acquire certain bands in the 800MHz spectrum of CAT, which are being used by DTAC and Hutchison-CAT.

UN economists say Thailand could attain 4.9% growth in 2008 with political stability

Channel News Asia (11 January 2008)

By IndoChina Correspondent Anasuya Sanyal Posted: 10 January 2008 2046 hrs

BANGKOK: A new United Nations report forecasts that global economic slowdown is likely to weigh on Asian economies in 2008. Although they will continue to expand – despite record oil prices and fears of a possible recession in the United States – UN economists said growth may not match the rates achieved in 2007. Last year, developing Asia Pacific economies achieved 8.2 percent average growth. The forecast for this year is 7.8 percent, spurred on by powerhouses China and India. The experts said while the regional economy is not as tied to developments in the US as a decade ago, countries heavily reliant on exports will be hardest hit. Many Asian currencies have been appreciating against the greenback, weakening exports. The potential Asian repercussions of a deepening sub-prime home loan crisis in the US and a hard landing for the US dollar would hit the economies of Taiwan, Korea and Singapore the most as they are the most open. China's growth rate could go down 3 percent, but India would be the least affected country in the region. The Chinese economy registered 11.5 percent growth for 2007, while India grew by 9 percent. The UN economists said sound macro-economic policies and diversified export destinations will limit the impact of external shocks on the region. For Thailand, Southeast Asia's weakest performer last year, UN economists attributed its slowdown to political instability and a decline in demand. But they believe the kingdom can attain 4.9 percent growth this year, up from 4.5 percent. Ravi Ratnayake, Chief Economist, United Nations Economic & Social Commission for Asia & The Pacific, said: "Firstly, it is important to have a clear direction of policy so that investors and consumers know where the economy is heading. That's number one. Number two and most importantly, is political stability." Thailand held general elections last month and a new government has to be formed in the coming weeks.