Can it be True? Thai-owned group to buy Hutch CDMA business

30 Dec 2010

Thai cellco True Move, part of domestic integrated telecoms operator True Corp, has announced in a statement to the Stock Exchange of Thailand (SET) that it will buy the Bangkok-based CDMA2000 mobile operations belonging to Hong Kong’s Hutchison Telecommunications International (HTI). HTI, part of Hutchison Whampoa, operates in Thailand as the 74% owner of a joint venture, Hutchison CAT Wireless Multimedia (HCWM), with the other 26% owned by state-run CAT Telecom; it provides 2G services in Bangkok and 25 central provinces including 3G CDMA2000 1xEV-DO services in selected areas under the ‘Hutch’ brand name via a marketing contract with CAT. If the deal is completed, True’s subsidiary Real Move (a unit recently set up to acquire 3G spectrum) will buy 92.5% of Hutchison Wireless Multimedia Holdings, through which HTI holds its stake in HCWM, for THB4.35 billion (USD144 million), whilst Real Move and another unit, Real Future, will acquire another three companies related to the CDMA business, including BFKT, HTI’s subsidiary that owns Hutch’s network infrastructure, for nominal prices of THB1 each. The transaction would see True take control of Hutchison Multimedia Services (Thailand) and Hutchison Telecommunications (Thailand) as well as HCWM. Furthermore, True announced that it will provide a THB6.3 billion loan to BFKT to clear outstanding debts. HTI previously valued its Thai CDMA business at no lower than THB6.6 billion. TeleGeography’s GlobalComms Database says that in April 2010 HTI agreed a price of THB7.5 billion to sell all assets in HCWM to CAT, which expected to conclude the deal by the end of 2010. However, the Thai government subsequently ordered CAT to reduce the offer to as low as THB4 billion, but HTI refused and CAT abandoned the takeover plan, which would have seen it combine Hutch with its provincial ‘CAT CDMA’ EV-DO network.

True is keen to gain access to Hutch’s 800MHz band frequencies to speed up rollout of 3G services. True Move is currently restricted to offering limited HSPA-based services under its existing revenue-sharing contract with CAT, whilst the process of auctioning full UMTS network operating licences in Thailand is at a standstill pending the appointment of members of a new regulator, the National Broadcasting and Telecoms Commission. If True is successful in the Hutch takeover, it has indicated that it aims to migrate Hutch’s CDMA customers to HSPA in around two years. True also told the SET that BFKT would continue to provide telecoms services to CAT, which would include the leasing of HSPA services, whilst Real Move would ‘be a reseller of services and capacity’.

Thailand, CAT Telecom, CK Hutchison, Hutch (Thailand), True Move