CAT gets cabinet approval for Hutch takeover

8 Apr 2010

The Thai government has approved CAT Telecom’s plan to take full ownership of Hutchison CAT Wireless Multimedia (HCWM), its CDMA2000-based mobile joint venture with Hutchison Telecommunications International (HTIL). The Bangkok Post reports that the cabinet yesterday gave the green light to the state-owned telco’s proposal to buy out the Hong Kong-based firm for THB7.5 billion (USD233 million), taking full control of the ‘Hutch’ network covering 25 central provinces including the Bangkok metropolitan area. HCWM is currently 74%-owned by HTIL via Hutchison Wireless MultiMedia Holdings, with the other 26% held by CAT. The deal includes the purchase of BFKT, a wholly owned subsidiary of HTIL, which currently leases the Hutch network to HCWM. CAT intends to take over the management of HCWM from HTIL and merge the unit with its wholly owned ‘CAT CDMA’ 2G/3G mobile network covering Thailand’s other 51 provinces, to create a seamless nationwide footprint. The state-run operator has already rolled out 1xEV-DO technology across the CAT CDMA network and intends to implement similar upgrades on the Hutch network, which previously underwent a limited pre-commercial EV-DO deployment before HTIL suspended investments in Thailand in advance of exiting the market. TeleGeography’s GlobalComms Database says that there are just under one million Hutch subscribers in Thailand, whilst CAT CDMA users number approximately half a million. Reuters quotes deputy government spokesman Phumin Leetheeraprasert as saying, ‘Within six months of the cabinet approval, CAT will offer CDMA services nationwide under the same brand, which should be around October.’

CAT president Jirayuth Roongsrithong said the deal would enable CAT to generate THB4 billion in revenues in the first year of operations and add 1.5 million Hutch customers once it merges its network in the other 51 provinces. He said CAT executives would go into detail with HTIL before signing and concluding the deal ‘within this year’. Mr Jirayuth also confirmed CAT would rebrand Hutch and set up a new company to handle the business. He added that CAT’s long-term of target was to increase blended monthly average revenue per user (ARPU) from THB400 to THB700. All local Hutch employees will be transferred to CAT. Financial advisers quoted by the Bangkok Post said the venture could potentially generate revenue of more than THB10 billion a year. CAT, Thailand’s former monopoly international telecoms operator, posted turnover of THB50 billion last year, of which about THB30 billion consisted of revenue-sharing income from mobile operators DTAC and True Move.

Thailand, CAT Telecom, CK Hutchison, Hutch (Thailand), Hutchison Telecommunications International Ltd (HTIL)