Thai GSM-based cellco True Move has confirmed reports that it is in negotiations to take over CDMA2000 mobile network operator Hutchison CAT Wireless Multimedia (Hutch). According to the Bangkok Post, the CEO of the cellco’s parent group True Corp, Suphachai Chearavanont, said that True Move last week resumed negotiating with Hutch’s majority owner, Hong Kong-based Hutchison Telecom International, on the possibility of a takeover as an alternative model for its 3G business plan. The interest was prompted by the breakdown in sale negotiations between the Hong Kong group and its Thai state-owned joint venture in Hutch, CAT Telecom. Hutch has a fledgling 3G CDMA2000 1xEV-DO network covering some areas of its CDMA2000 footprint across Bangkok and 25 central provinces, and CAT had intended to upgrade the entire infrastructure to EV-DO and integrate it with its own ‘CAT CDMA’ EV-DO network covering northern and southern regions. However, having come to agreement in April 2010 on a THB7.5 billion (USD250 million) buyout of Hutch, CAT was subsequently ordered by the government to renegotiate the deal to around THB4 billion, and Hutchison was reportedly unprepared to settle for less than THB6.6 billion. The acquisition could be a shortcut for True, or potentially its larger GSM rival Advanced Info Services (AIS), to provide 3G mobile broadband services in the absence of UMTS licensing, which has been suspended until next year following legal disputes.
Mr Suphachai told the Post that True has set up a legal team to study the feasibility of the Hutch takeover in light of the collapse of the talks with CAT, including the areas of technology, legal issues and investment viability. International financial consultants would be needed once True Move completes the preliminary feasibility study, he added. Suphachai identified Hutch’s remaining five-year marketing contract as the major attraction, allowing it to offer services over 850MHz wireless spectrum. Furthermore, the contract could be renewed after it expires because it is a marketing agreement rather than a concession, he said.
Market leader AIS has also confirmed its interest in a potential takeover of Hutch, with its vice president for communications Wilai Keangpradoo telling Reuters: ‘It’s one of several business opportunities that we are studying.’ However, AIS has not yet discussed the plan with either Hutchison or CAT. ‘We have not started talking with anyone. It’s still in the process of being studied, and whether it will go through depends on many factors,’ Wilai said.