CAT-Hutch nearing nationwide marketing deal

29 Oct 2007

State-owned Thai telco CAT Telecom expects to conclude a marketing deal with its Hong-Kong based joint venture partner Hutchison Telecom International for nationwide ‘Hutch’ branded CDMA mobile phone services within the term of the current military-backed government, reports the Bangkok Post. A CAT director was quoted by the paper as saying that the board would meet this week to discuss the details of the collaboration with Hutchison. If the board agrees on the plan, a memorandum of understanding could be signed within two weeks. At that point, CAT would draft a contract while it awaits a ruling from the Council of State, the government’s legal advisory body, on whether the deal needs cabinet approval. Thailand’s 1992 public-private joint venture law calls for cabinet approval of ventures worth more than THB1 billion (USD32 million) in the interests of transparency. Under the proposed marketing plan, Hutchison would transfer its CDMA2000 1x network owned by subsidiary BFKT in 25 central provinces to the state telecom enterprise. BFKT would also absorb all the accumulated debt of the pair’s joint CDMA marketing venture Hutchison CAT Wireless Multimedia, which is currently 74% owned by Hutchison and 26% by CAT. In exchange, Hutch wants to be the sole marketer of CDMA services nationwide, including the 51 provinces in which CAT has built its own 1x/EV-DO network (under the CAT CDMA brand). Under the deal, CAT’s holding in Hutchison CAT Wireless Multimedia would then increase to 51% at no extra cost. The director said that CAT and Hutchison were hopeful that the deal could be concluded within the term of the current government as they were not certain the next administration would approve it. In April Hutchison CAT Wireless Multimedia and CAT Telecom agreed to offer nationwide roaming services over the two CDMA2000 1x networks. Previously, CDMA users were subject to roaming surcharges and had to adjust phone settings when roaming between CAT’s old CDMA IS-95A network and Hutchison CAT’s 1x network in Bangkok and surrounding provinces. Hutch had nearly 800,000 Thai subscribers at the end of June 2007, in a cellular market of close to 48 million.