Executives of CAT Telecom denied yesterday the state agency would go on a spending spree if it regained full concession-fee payments from its cellular concessionaires.

They were reacting to concerns within the telecom industry that CAT and TOT would overspend on projects or executive welfare if the Cabinet decides next Tuesday to follow a recommendation from the Information and Communications Technology Ministry and abolish the telecom excise tax.

Excise is currently 2 per cent for fixed-line operators and 11 per cent for mobile-phone firms. However, a measure introduced in 2003 by the Thaksin government allows them to deduct excise payments from their concession fees before paying the remaining fee to state concession owners TOT and CAT.

This has eaten into the concession revenues of the two agencies. CAT expects to lose Bt8 billion in concession revenues this year as a result of the excise deduction, more than last year's Bt6.8 billion.

CAT also paid Bt500 million in excise tax last year for its joint venture, Hutchison-CAT, which markets high-speed cellular service in 25 provinces.

If the Cabinet effectively abolishes the excise next Tuesday, all telecom concessionaires will resume paying the full fee to TOT and CAT.

CAT president Phisal Chorpokaudom said the agency had no way of going on a spending spree if it received the full concession fee, because all expenditure had to be approved by the government.

Moreover, CAT must give 30 per cent of its revenues to its main shareholder, the Finance Ministry.

As well as the possibility of receiving full concession fees, TOT will also gain an additional Bt1 billion in annual concession revenues from Advanced Info Service (AIS) next year. That company has agreed to raise its fees from prepaid phone services from 20 per cent of revenues to 25 per cent. The plan has yet to be officially announced by AIS.

TOT must also share 30 per cent of its revenues with the Finance Ministry.

The concessions of both Total Access Communication and True Move are owned by CAT Telecom, while that of AIS is owned by TOT.

Usanee Mongkolporn

The Nation

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CDMA in 51 provinces

CAT Telecom is confident it will be ready for the commercial launch of its mobile-phone service in 51 provinces on January 26 and is hoping to attract 150,000 subscribers next year.

Chief financial officer Jirayut Rungsrithong said Chinese telecom-network supplier Huawei Technologies had installed 1,580 base stations out of a total of 1,600 for the Code Division Multiple Access (CDMA) 2000 1-x cellular service.

"The rollout will be entirely finished by December 20, giving us time to test the system's reliability before the official launch date," he said.

The service, which will have the brand name CAT CDMA, aims to sign up 150,000 customers next year. It also hopes to pick up 5,000 before the end of this year.

It will focus on selling the CDMA aircard, which will enable subscribers to use the CDMA network to wirelessly access the Internet or different data services at a fast speed with their personal computers.

"We'll mainly nab the teen tech geeks and the active mobile-data consumers," Jirayut said.

However, the network will initially offer only a post-paid phone service, he said.

The state agency has yet to clinch a deal with Hutchison-CAT to jointly provide a cellular service throughout the country on their separate CDMA networks.

Hutchison-CAT is a joint venture between CAT and the Hong Kong telecom giant Hutchison Telecom. The company markets a CDMA cellular service in 25 provinces on a network it leases from BFKT, a wholly owned subsidiary of Hutchison Telecom.

Usanee Mongkolporn

The Nation