True to invest B10bn to triple growth rates of linked services

Bangkok Post (1 February 2008)

True Corporation plans to spend more than 10 billion baht this year to push forward its content-led convergence services with the aim of almost tripling its businesses growth to 8%. The country's only integrated telecoms firm has earmarked an additional 10 billion baht to invest in third-generation (3G) mobile services on a new 2.1 GHz frequency once the National Telecommunications Commission (NTC) issues 3G licences.

True has also announced plans to enter a fixed-line

partnership with TOT Plc and a venture with CAT Telecom for mobile phone services. Supachai Chearavanont, the chief executive of True Corp, said mobile affiliate True Move was in talks with both TOT and CAT on possible joint ventures.

''We expect to strike a memorandum of understanding with TOT on fixed lines on a telecom pool basis to reduce duplicate network investments and improve service quality,'' he said. ''We're also in talks with CAT Telecom on a possible partnership.''

He said the Thai telecom industry was entering an ''alliance fever'' era in which state enterprises and private companies were looking for business participation for win-win solutions.
For 3G investments, he said, his company was not willing to upgrade its existing 2G network, saying it would not be worth the investment and not viable.

''We prefer to wait for a new 3G licence and frequency from the NTC before choosing the upgrade alternative, with a budget of 10 billion baht.''

Of the 10 billion baht True plans to spend this year, six billion will go to mobile network expansion. Up to two billion baht would be for its fixed-line business, two billion for

broadband internet, WiFi and WiMax, and 1.2 billion for TrueVisions pay-TV.

Mr Supachai said the group aimed to grow by 8% this year, up from 3% last year, driven by non-voice services, broadband internet and cable TV.

The proportion of True Move's voice revenue has gradually declined to 69% last year, down from 72% in 2006 and 88% in 2005.

In 2007, True reported EBITDA of 19 billion baht on revenue of 52 billion baht. As of Sept 2007, the firm's debt-to-EBITDA ratio was 3.7. The group's businesses grew by 3%. or by 5-6% excluding fixed-line and PCT services.

Mr Supachai said the mobile industry would likely have between eight and 10 million new subscribers this year. True Move aims to increase its share to 25% this year, up from 23% last year.

The company's broadband subscribers are expected to increase from one million to 1.3 million this year. It plans to expand its WiFi hotspots to 10,000 from 4,000.

Mr Supachai said True planned to focus on innovations, network and services this year. The new government, its policies and political stability would be the crucial factors for the communications industry, he said. New operating licences for 3G and opening up the industry were priorities, he added.

True Corp shares closed yesterday on the SET at 5.30 baht, up 15 satang, in trade worth 296.72 million baht.

CAT still pursuing ZTE deal

Bangkok Post (1 February 2008)

CAT Telecom is determined to award a contract to the Chinese telecom supplier ZTE to build a 9,000-kilometre optical-fibre cable network worth 2.6 billion baht despite questions about transparency from the Auditor-General. Air Marshal Piriya Siriboon, a CAT board spokesman, said it would meet on Tuesday to consider approving the deal and sending a letter of intent to ZTE. He said the Chinese vendor would have 15 days to consider whether to sign the contract after receiving the letter.

CAT must go ahead with this significant project since it started almost four years ago. Although some might think this could be the board's last project before its term expires, the timing was just a coincidence, ACM Piriya said.

The board said the project should not be prolonged further because it might have to go back to square one.

The Office of the Auditor-General had questioned CAT three times about the project, but the board was free to make its own decision even though a new minister would be appointed very soon, he said.

In principle, the minister should take on policy matters rather than going deep into the details of each project, he said.

The project was ready to go forward because CAT had clarified all questions with the auditor-general, and so far it had not raised further queries, he said.

''We've explained to them all the processes related to the bidding and equipment specifications and why we selected ZTE,'' he said.

A source said the Office of the Auditor-General had questioned CAT on past performance conditions.

Specifically, it asked whether the company intended to eliminate certain bidders to favour one contender by easing a condition related to past performance. The original terms required bidders to have had experience with a similar project worth at least 500 million baht but the figure was reduced to 200 million.

It also noted complaints by some contenders who were technically disqualified, and asked why ZTE was qualified even though it also proposed equipment that did not meet CAT's required specifications.

The source said the deputy auditor-general had told Gen Montri Sangasap, the CAT board chairman, that executives or directors of the state telecom enterprise might be found guilty of collusion if all complaints were true.

The cable project would link all parts of the country with the capital via optical-fibre networks covering a distance of 9,000 kilometres.

Another Chinese telecom equipment supplier, Huawei Technologies, had earlier won part of the project, to install an optical-fibre network in the western, central and northern areas of Thailand for 484 million baht. ZTE also won part of the project in the South with a quote of 169.86 million baht, lower than the reference price of 212 million baht.

But all bids were scrapped and the new bid was called with ZTE becoming the favoured contender to win all parts worth 2.6 billion baht.

In another development, the board of CAT's sister telecom agency, TOT, has decided to cease all procurement projects now that a new cabinet is preparing to take office.

For ethical reasons, the board should not approve any projects pending the arrival of a new government and a new board, said TOT director Djit Laowattana.