World VoIP NewsCATs takeover of Hutch now rests on cabinet approvalCATs takeover of Hutch now rests on cabinet approval

CATs takeover of Hutch now rests on cabinet approval


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Thai government-owned telco CAT Telecom is awaiting final cabinet approval to take full control of Hutchison CAT Wireless Multimedia (HCWM), its CDMA2000-based mobile joint venture with Hong Kong’s Hutchison Telecommunications International (HTIL), reports Dow Jones Newswires.
The National Economic & Social Development Board endorsed the plan and passed it to the cabinet. According to TeleGeography’s GlobalComms Database, CAT currently runs a provincial 2G/3G service under the CAT CDMA brand whilst HTIL manages the Bangkok-based HCWM operation under the Hutch banner. CAT plans to buy BFKT, a wholly owned subsidiary of HTIL, which owns a CDMA2000 network covering 25 central provinces (currently leased to HCWM), before merging the network with its wholly owned infrastructure in 51 provinces to create a seamless nationwide footprint.

The state-run operator has already rolled out 1xEV-DO technology across the CAT CDMA network and intends to implement similar upgrades on the Hutch network, which previously underwent a limited pre-commercial EV-DO deployment before HTIL suspended investments in Thailand in advance of exiting the market.

Although final financial details of the proposed takeover have yet to be revealed, at the beginning of this year it was reported that CAT would offer between THB5 billion (USD148 million) and THB7.5 billion for the BFKT-owned network assets. There was no mention of the equity value of HCWM, which is 74%-owned by HTIL via Hutchison Wireless MultiMedia Holdings, with the other 26% held by CAT. The telco is Thailand’s former international long-distance monopoly, but its revenue structure is propped up by concession fees from GSM mobile operators under build-transfer-operate (BTO) agreements: CAT posted turnover of THB50 billion in 2009, of which around THB30 billion was revenue-sharing income from cellcos DTAC and True Move. HCWM has around one million subscribers generating around THB400 million income per month, which CAT is hoping to grow via the expansion of 3G services, particularly as it faces the loss of significant revenue share if and when Thailand eventually issues 3G UMTS concessions to private sector cellcos outside of the BTO framework. CAT expects to double its investment budget this year to over THB20 billion due to extra investments including the potential takeover of Hutch; it plans to spend THB6 billion on expanding its fibre-optic network and THB3.8 billion on CDMA infrastructure. It is aiming to increase revenues by between 5% and 10%, excluding the potential effects of completing the Hutch acquisition.


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