UCOM withdraws bid for CDMA network

4 Jul 2003

Thai telecoms group United Communication Industry (UCOM) has withdrawn its THB32 billion bid made with Nortel Networks to roll out a provincial CDMA network in conjunction with the Communications Authority of Thailand (CAT). According to UCOM’s chief executive Boonchai Bencharongkul, concern over the project’s long-term viability was the principal reason behind the decision. In December 2002 a consortium led by UCOM and Nortel won the contract to build the provincial part of a national CDMA network to be operated by state-owned fixed line telco CAT. The contract followed an earlier deal to rollout CDMA services to Bangkok and central Thailand, which was awarded to Hutchison Whampoa. That part of the network was launched in February this year under the banner Hutchison CAT Wireless Multimedia. UCOM’s decision leaves CAT somewhat in the lurch, as it took a number of attempts to attract bidders for the project. Indeed, in January 2003 the government itself hinted that it was considering mothballing the project because of the level of finance required.

At the end of 2002 Thailand was home to some 17.17 million mobile subscribers, more than three quarters of which were connected to pre-paid packages. Until early 2002 the market was effectively controlled by just two players – UCOM’s Digital Total Access Communications (DTAC) and Shin Corp’s Advanced Info Services (AIS). In March that year, however, TA Orange, a joint venture between fixed line operator TelecomAsia and Orange, joined the fray and by the end of the year boasted a 7.81% market share. Hutchison CAT Wireless Multimedia was the next to market, launching services in February 2003. Hutchison CAT is in reality a reincarnation of Tawan Mobile Telecom, a company which won a 15-year CDMA concession in 1997, but which failed to make an impact and had its services suspended after it failed to meet government-set subscriber targets. The addition of telecoms heavyweight Hutchison Whampoa has given the company a much better chance of survival, but analysts have questioned whether this is enough to secure the future of CDMA services in a country heavily dominated by the GSM platform.