Thai Mobile and AIS in ‘secret’ 3G tie-up

23 May 2006

Thai Mobile, Thailand’s smallest cellco and sole holder of 3G spectrum, has revealed details of an agreement it made with mobile market leader Advanced Info Services (AIS) in 2004, under which AIS would have first rights to negotiate with Thai Mobile for the usage of its 1900MHz-2000MHz W-CDMA frequencies. According to the Bangkok Post, Wasukree Klarpairee, CEO of Thai Mobile, admitted that his company had allowed AIS a head start in 3G because AIS was the only operator that had granted Thai Mobile a national roaming agreement while others had rejected the proposal, adding that AIS had also reduced its roaming rate from THB2 a minute to THB1.10.

Thai Mobile, a joint venture owned by state-run sister companies TOT Corp (58%) and CAT Telecom (42%) has less than 150,000 subscribers in a market of over 30 million, having been plagued by infighting between its two shareholders. In July 2005 TOT agreed to pay THB4 billion (USD96 million) for CAT’s entire stake, but problems with the deal are still being ironed out. Once it manages to wrest full control from CAT, TOT plans to re-brand the cellco as TOT Mobile and has targeted UK-based giant Vodafone as a possible joint venture partner in the provision of next-generation services, although it has also held talks with Japan’s NTT DoCoMo and KDDI. Mr Wasukree said that although Thai Mobile would have an advantage over others in UMTS bandwidth and service rights, in practice it was not in a good position to launch 3G services because of its shareholding structure. He said Thai Mobile had imported 3G switching equipment but the receiving and transmission equipment had not yet been approved by regulator the National Telecommunications Commission (NTC).

The NTC is expected to finalise 3G regulations and issue licences by the end of this year, or early 2007 at the latest. Sigve Brekke, the chief executive of the country’s second largest cellco Digital Total Access Communications (DTAC), said that the secret bilateral agreement between Thai Mobile and AIS was ‘not a problem’ for his company, adding that 3G commercial services would take two to three more years to take off. He added that he didn’t understand why the two parties had kept the contract a secret as 3G ‘was a matter of public and industry concern’. An executive of third-placed wireless player True Move said that telecom operators had anticipated such an agreement but they wanted both TOT and Thai Mobile to clarify the national roaming agreement it had signed with AIS, to clear up any allegations of state bias.

Thailand, Advanced Info Service (AIS), Thai Mobile