CAT takes Huawei to court

A source at the state agency said the case was filed with the Central Administrative Court yesterday.

Top-ranking CAT executives could not be reached to confirm the report.

A source at the Chinese telecom-equipment supplier said the company had yet to learn about the case.

Early last year, CAT's board decided to exercise a contract provision that penalises the supplier Bt90 million a day, following alleged late delivery in the second phase of the Code Division Multiple Access (CDMA) 2000 1-x cellular network in the provinces.

If it has to pay the full penalty, Huawei could face a Bt30-billion charge.

In December, Huawei petitioned the Central Administrative Court that CAT had yet to pay the second instalment of 25 per cent of the project valued at Bt7.2 billion, as scheduled for February 2007.

The state enterprise paid the first 25-per-cent instalment two years ago.

Huawei, which won the network-installation deal in 2005, said the dispute stemmed from different interpretations of the contract.

It believes it had to deliver the second phase by January 26 last year, which it did, while the complementary high-speed software package was supposed to be completely installed this year.

The company has proposed installing the associated equipment free of charge.

However, CAT read the contract to mean the entire network had to be delivered by last January.

After the conflict erupted, Huawei delivered the high-speed software to CAT in November.

CAT hopes its CDMA network in the provinces will become an important new source of revenue.

It is trying to link up with Hutchison-CAT's CDMA network in 25 provinces to allow countrywide joint-service marketing.

Hutch is a joint venture by CAT and Hong Kong giant Hutchison Telecom.

Telecom Reporters

The Nation