CAT-True deals on 3G service in trouble Senate panel says partnership might be in breach of law

The Senate's anti-corruption and good-governance committee has concluded that parts of the CAT Telecom-True Corp partnership for third-generation cellular service may breach relevant laws.

The committee chaired by Rosana Tositrakul sent its conclusions to the board of the National Broadcasting and Telecommunications Commission (NBTC) and the National Anti-Corruption Commission (NACC) last week. The Senate committee also viewed that those involved in permitting CAT to sign the deals with True group should be investigated on suspicion of misconduct. The committee concluded that CAT's agreement to allow BFKT (Thailand) to procure telecom towers and signal systems on its behalf to generate 3G bandwidth, and CAT's apparently allowing BFKT authority to manage the 850-megahertz spectrum on its behalf, might violate Article 46 (2) of the frequency law. The committee also suggested that the NBTC execute its authority under Article 31 (2) of the 2010 Frequency Allocation Law to order CAT to suspend this transaction.

Article 46 (2) bans licence holders such as CAT and TOT from granting rights of spectrum management to other parties, as they must use such spectra on their own.

Moreover, the committee views that BFKT, which is part of the True group, breached Article 45 of the Frequency Allocation Law as it does not have a business licence to provide this network rental service.

The BFKT network-rental deal is one of several contracts signed between CAT and True group in January last year to set up their partnership to offer 3G-850MHz service.

The NBTC board yesterday approved the appointment of a subcommittee to examine the legal aspects of the deals, said commission secretary-general Takorn Tantasit. The subcommittee is to complete its examination within 60 days of the board officially ordering the appointment, which is expected to take place in the next few days.

CAT and True's subsidiaries Real Move and Real Future signed the deals on January 27, 2011. Under the arrangement, BFKT of Real Future rented 3G-HSPA (high-speed packet access) equipment to CAT to generate 3G bandwidth over a 14-year contract. CAT has agreed to wholesale this 3G bandwidth to Real Move to provide service for 14 years. Real Move now has more than 800,000 subscribers.

The deals attracted probes by many state authorities including the Information and Communications Technology Ministry, the Office of the Auditor-General and the NACC. CAT and True executives have strongly affirmed that the deals comply with all laws and regulations.

The NACC has summoned Takorn to be questioned about the deals next Monday. The ICT Ministry is expected to announce the result of its probe at the end of this month.

Recently True filed a lawsuit at the Central Administrative Court against the order of the now-defunct National Telecommunications Commission that True had to amend part of the wholesale-resale contract between CAT and Real Move.

In a separate matter, the NBTC board yesterday asked the broadcasting and telecom committees to review the spectrum-management, telecom and broadcasting master plans and submit them for the board's consideration on March 14. If approved, they will be announced in the Royal Gazette. The review is to take into consideration the findings of a public hearing on the master plans last Friday.