Thai full-service telco True Corp has revealed that it is close to a ‘friendly’ takeover of the Hutch-branded CDMA2000-based mobile business currently run by Hutchison CAT Wireless Multimedia (HCWM), a joint venture of Hong Kong’s Hutchison Telecom International (HTI) and domestic state-owned telco CAT Telecom. However, the deal could face legal challenges, the potential for which was flagged up this week by Thai cellular market leader Advanced Info Services (AIS), itself linked with a possible rival bid for Hutch. According to the Bangkok Post, True, which incorporates the country’s third largest GSM operator True Move, indicated a takeover bid for Hutch – which covers Bangkok and central provinces – could be on the cards by the end of this month, as it has already finished its due diligence of HCWM and the company that owns its CDMA network, BFKT, itself wholly owned by HTI.
True Corp chief executive Supachai Chearavanont said it studied Hutch’s average revenue per user (ARPU), revenues and customer base, which it estimated at 500,000 subscribers: TeleGeography notes that this is much lower than other recently published estimates closer to 900,000. HTI has restricted investment in the Thai unit to a minimum in recent years as it prepared to exit the venture, and the last reported customer numbers showed the base had declined to 1.0 million at end-June 2009 from 1.1 million one year earlier. The research company’s GlobalComms Database adds that HCWM is 74% owned by HTI, via Hutchison Wireless MultiMedia Holdings, with CAT holding 26%, whilst Hutch has evaded laws capping foreign shareholdings to under 50% by ‘marketing’ telecoms services over a network leased from BFKT, rather than operating a network directly, as the actual telecoms licence holder is CAT. The 15-year marketing contract with CAT ends in 2015 but is renewable. True is interested in Hutch’s 850MHz mobile spectrum which could be used for 3G services whilst the country’s 2100MHz UMTS licensing process remains stalled, but Mr Supachai made it clear True would not pay the price Hutchison proposed to CAT Telecom of THB7.5 billion (USD250 million) in earlier discussions, which led to the state-owned operator abandoning a plan to take control of Hutch and link its central network with its own CDMA service covering the rest of Thailand. Meanwhile, the Post reported that rival cellco AIS’s chief executive Wichian Mektrakarn threw a potential spanner in the works by cautioning that a True-Hutch deal could breach the 1992 Public Private Joint Venture Act as previously interpreted by the Council of State. The law requires extra government scrutiny of any public-private ventures worth more than THB1 billion. HCWM has THB950 million in registered capital and BFKT THB500 million.