True to continue CAT partnership ‘at own risk’ as state telco officially suspends 3G activity

28 May 2012

Thailand’s ICT minister Anudith Nakornthap has warned True Corp that if it chooses to continue investing in its 3G mobile partnership with CAT Telecom, it must do so at its own risk, Thai newspaper The Nation reports. As CommsUpdate reported earlier this month, state-owned CAT has been forced to suspend its own investments in the 3G business pending the outcome of multiple investigations into the legality of its partnership deals with True, which the minister confirmed, while adding that he hoped that CAT could find solutions to its legal problems by July. The ‘True Move H’ HSPA-based services are provided via contracts signed in January 2011, under which CAT leases 800MHz/850MHz network infrastructure rolled out by BFKT, a subsidiary of True’s Real Future holding division, and in turn CAT wholesales the capacity to True’s Real Move unit which effectively acts as a mobile virtual network operator (MVNO); CAT also operates its own retail HSPA-based service under the ‘My’ banner, although this has now been suspended pending legal decisions.

A subcommittee of the independent regulator, the National Broadcasting & Telecommunications Commission (NBTC) has issued a decision that the CAT-True deals breach the Frequency Allocation Law, which prevents a licensee (i.e. CAT) from allowing another party (i.e. True) from managing frequencies on its behalf. As reported today by the Bangkok Post, the committee found seven points which must be amended in the contracts. Firstly, CAT must use the 800MHz frequency ‘on its own equipment and devices’. Second, CAT must have full management control over its network operation centre. Third, mobile data usage and call detail records must be in CAT’s possession. Fourth, the contracts must indicate clearly that CAT has the authority to manage spectrum. Fifth, the contracts must allow CAT to be the sole decision-maker on frequency planning, network rollout and service operations. Sixth, CAT must have the authority to negotiate with other operators about inbound roaming and interconnection charges. Finally, the contracts must stipulate that CAT is solely responsible for spectrum control. The subcommittee will submit its findings to the NBTC telecom committee next month, the Post’s source said, and a recommendation will be submitted to the watchdog’s board in two weeks for approval.

Previously, in March, a panel of the Ministry of ICT (MICT) panel found legal irregularities in the CAT-True deals, while the National Anti-Corruption Commission (NACC) declared that state officials involved in the deals had breached the law.

Ahead of the NBTC’s subcommittee decision, Minister Anudith confirmed that CAT’s 3G activity had been suspended after meeting with CAT’s management and board executives, ‘given that the True-CAT deal is still under investigation by many state agencies – and given that the National Economic & Social Development Board declined to approve budget for CAT [of USD245 million to develop the My 3G brand] and recommended CAT submit its budget request to the cabinet first.’ If True is determined to proceed with its 3G investment plan, and if [the state decides that] the CAT deal was in violation of the law, then True must assume all the risk, he added.