Published on January 18, 2006

Huawei Technologies will not begin the first phase of delivery of a cellular network spanning 51 provinces to CAT Telecom Plc until next month due to heavy flooding late last year.

But it remains to be seen if Huawei will face financial penalties because the project’s terms of reference (TOR) state that the supplier will not be fined if a delay is due to natural causes.

The Chinese telecom-equipment supplier was to begin handing over the Code Division Multiple Access (CDMA) 2000 1-x cellular network to CAT on January 26 after completing network installation and performing joint testing with CAT.

CAT’s CDMA project manager, Wichai Deecharoenkul, said Huawei had finished installing five network-switching systems and more than 800 cellular base stations in the area, but CAT and Huawei had yet to jointly perform network reliability tests.

The switching and base stations in the North and Northeast are ready for testing, while those in the South should be ready by January 24.

“The main reason for the delay in testing is the heavy flooding that occurred in the installation areas in the North and the South during late last year,” Wichai said, adding that testing is expected to be completed within 30 days.

But it is still not entirely clear whether Huawei will be fined. CAT’s acting president, Phisal Jorphochaudom, said that CAT had set up a panel to scrutinise the issue, with results expected next month.

“We aren’t sure if Huawei will face a fine. The TOR state that the supplier will not be fined if a delay stems from flooding or natural causes,” he said.

He added that there had been many CAT projects where suppliers have been fined after failing to complete the project on schedule.

Under the TOR, a fine would be divided into two components – the cost of CAT’s lost business opportunities (Bt70 million per day) and 0.02 per cent of the cost of the equipment that was supposed to be handed over during that phase.

The five switching systems – in Chiang Mai, Phitsanulok, Hat Yai, Surat Thani and Nakhon Ratchasima – have the capacity to serve 2.5 million subscribers in the 51 provinces.

Wichai said that the rollout of an additional 800 CDMA network base stations in the second phase was expected to be finished in May.

Marut Burabasethuk, CAT’s chief marketing officer, said that the delay had pushed the full commercial launch of CDMA cellular services in the 51 provinces back from March to the second quarter.

The overall cost of the CDMA network-installation project is Bt7.2 billion.

CAT will connect the project with the existing network in the other 25 provinces – provided by Hutchison Telecom and CAT’s mobile phone

joint venture – enabling countrywide service.

The state agency is still in talks with Hutch on possible collaborative efforts on network issues and marketing. Hutch has about 700,000 customers after three years of operation.

Usanee Mongkolporn

The Nation

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