Regulator rules CAT-True 3G partnership 'unfair'

29 Sep 2011

Thailand’s new regulator, the National Broadcasting & Telecommunications Commission (NBTC) has ruled that a series of contracts signed in January by state-owned CAT Telecom and cellco True Move, under which the pair agreed to operate 3G HSPA-based mobile services for 14 years, violate regulations related to significant market power under the Trade Competition Act and the Public-Private Joint Venture Act 1992. Via the partnership, True launched full commercial services on 30 August 2011 over an 850MHz HSPA+ network in Bangkok and 16 provinces using the ‘True Move H’ brand name, whilst CAT’s ‘My’ branded HSPA service was launched in the same month. In July the Office of the Attorney-General had concluded that the CAT-True 3G resale/wholesale deals were not subject to the Joint Venture Act and did not violate regulations, but the NBTC’s latest ruling gives CAT 30 days to change the contracts, because they allow CAT and True an ‘unfair advantage’ over rivals; rollout of the HSPA network must be delayed until contracts have been revised.

TeleGeography writes that as Thailand’s 2100MHz licence auction was blocked by a legal injunction in September 2010, True looked for alternative routes to commercial 3G development. In late-December 2010 it agreed to purchase the Hutch CDMA2000 mobile network in Bangkok and 25 central provinces, then operated by Hutchison CAT Wireless Multimedia (HCWM, a joint venture between Hutchison Telecoms International [HTI, 74%] and CAT Telecom [26%]) under a marketing contract with CAT. By replacing Hutchison as CAT’s public-private marketing partner, the acquisition gives True access to 800MHz-850MHz frequencies for 3G operations outside of its revenue-sharing build-transfer-operate (BTO) contract with CAT. The deal, completed on 27 January 2011, involved True’s subsidiary Real Move (formerly S&K Wireless) buying 92.5% of HTI’s local holding vehicle Hutchison Wireless Multimedia Holdings for THB4.35 billion (USD144 million), whilst refinancing HTI unit BFKT (which owned the Hutch network and leased it to HCWM) to the tune of THB6.3 billion. Real Move and another True unit, Real Future, took control of HCWM and BFKT as well as HTI units Hutchison Multimedia Services (Thailand) and Hutchison Telecommunications (Thailand) for nominal (THB1) fees. BFKT continues to lease network services (now including HSPA) to CAT, whilst Real Move acts as ‘a reseller of services and capacity’, in essence a mobile virtual network operator (MVNO).

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