CAT Telecom's newly appointed board of directors wants the agency's management to come up with an explanation on why it needed to take over the Thai operations of Hutchison Telecom and to justify its purchase budget of more than Bt7 billion.
After the meeting yesterday, board chairman Visut Srisupan said they had decided to have the management to submit the reasons and clarification for the project next Friday.
In April this year, the Cabinet gave CAT the nod to spend up to Bt7.5 billion on the takeover, of which Bt7.2 billion was meant for Hutchison Telecom and its Code Division Multiple Access (CDMA) 2000 1x network in 25 provinces.
CAT wants to quickly merge its own CDMA network in 51 provinces with Hutchison's network in 25 provinces.
HutchisonCAT Wireless Multimedia, a CATHutchison Telecom joint venture, leased the CDMA network in 25 provinces from BFKT, which is wholly owned by Hutchison Telecom, to provide the service under the Hutch brand.
CAT, which has not signed the takeover deal with Hutchison Telecom yet, submitted the draft purchase contract with the Office of the Attorney General in February for approval, but has not got it back yet.
The CAT board has also asked the management to consider if the agency should bid for the 3G2.1GHz spectrum licence from the National Telecommunications Commission (NTC), which plans to auction them off in September.
CAT has Bt40 billion cash in its coffers and Bt100 billion worth of assets.
Moreover, the management has also been asked to come up with a plan to improve CAT's operating rev¬enue. At present, the state agency mainly relies on its concession revenue, which accounts for 63 per cent of its total revenue.
In the first five months, CAT earned Bt3.2 billion before interest, taxes, depreciation and amortisation, and expects its net profit this year to surge to Bt8.3 billion from Bt8 billion last year.
Meanwhile, CAT CEO Jirayuth Rungsrithong said next Friday, the management would also propose that the board set up a policy for the 850MHz spectrum.
CAT is letting its concession holders Total Access Communication and True Move use the spectrum to provide the 3G service on a trial noncommercial basis.