CAT and TOT at loggerheads for control of Thai Mobile

CAT chairman Sathit Limpongpan said after the board's meeting last Saturday that CAT would not accept TOT's proposal to acquire all its 42-per-cent stake in Thai Mobile.

Instead, CAT will make a counter offer to acquire TOT's 58-per-cent share in the joint venture for Bt3.3 billion, payable over five years, as well as take on Thai Mobile's debt of Bt6.5 billion.

TOT's board recently resolved that TOT would pay Bt2.4 billion for CAT's shares in Thai Mobile, to be paid in annual instalments of Bt200 million.

TOT's board has also asked its management to draft a business plan for Thai Mobile, including whether it should enter the 3G mobile broadband business on its own, or with a partner, or outsource the service to a company.

But Sathit said CAT might divest its Thai Mobile shares if TOT agrees to pay for them in full within seven days of the National Economic and Social Development Board granting approval of TOT's plan.

CAT wants to take over Thai Mobile so it can operate three cellular businesses - 3G High Speed Packet Access (HSPA) broadband service on both 2.1GHz and 800MHz spectrums, together with its existing Code Division Multiple Access (CDMA) 2000 1-x broadband service.

Thai Mobile owns the most sought-after 1900MHz spectrum, part of the 2.1GHz spectrum, the standard platform for offering 3G HSPA service.

Thai Mobile is using the 1900MHz band to provide conventional cellular service.

TOT has attempted for years to take over Thai Mobile from CAT, aiming to have the biggest say in developing the 3G service on the 1900MHz spectrum.

CAT already provides cellular service in 51 provinces via the CDMA network, while its joint venture Hutchison-CAT wireless multimedia provides a similar service over a separate CDMA network in 25 provinces.

Sathit said CAT would quickly wrap up talks with Hong Kong telecom giant Hutchison Telecom, Hutch's major shareholder, over possible marketing collaboration for their two separate networks.

CAT is mulling to permit its private mobile concession holders Total Access Communication and True Move to upgrade their networks to the HSPA technology to offer 3G on their existing 800MHz bands.

Sathit also said CAT would talk with Chinese telecom equipment vendor Huawei Technologies about settling their disputes out of court.

Early last year, CAT's board decided to penalise the supplier Bt90 million a day, following alleged late delivery of the second phase of the CDMA network in 51 provinces to CAT. If it has to pay the full penalty, Huawei could face a Bt30-billion charge.

Late last year, Huawei petitioned the Central Administrative Court to order CAT to pay the second instalment of 25 per cent of the CDMA project in 51 provinces, 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 their contract. It believes it had to deliver the second phase by January 26 of last year, which it did, while the complementary high-speed software package was supposed to be completely installed this year.

However, CAT read the contract to mean the entire network had to be delivered by last January. Later Huawei delivered the high-speed software to CAT.

Early this year CAT took Huawei to the Central Administrative Court over the alleged delayed delivery of the CDMA network.