Ex-minister indicted over True-CAT, TOT deals

19 May 2015

Thailand’s National Counter Corruption Commission has voted to indict former ICT Minster Juti Krairiksh for his role in the controversial 850MHz 3G partnership deal struck in January 2011 between private sector operator True Corp and state-owned CAT Telecom, as well as for receiving benefits from a deal between state telco TOT and 3G network expansion partner SL Consortium that year. As reported by TelecomAsia, the True-CAT 850MHz 3G rollout/operating deal was widely criticised as a ‘back-door concession’ that ‘gifted’ True valuable 850MHz spectrum without due process (giving it a head start on rivals ahead of 3G auctions). Under the convoluted arrangement, CAT ostensibly acts as a mobile network operator (MNO) with True acting as a mobile virtual network operator (MVNO) for 850MHz services, but the 850MHz network capacity is in the first instance leased by a subsidiary of True to CAT before the state telco ‘sub-contracts’ the capacity back to True. The marketing/operating model was largely inherited from a previous business arrangement between CAT and its former private sector partner Hutch Thailand (assets of which True bought via the 2011 deal).

For the True-CAT case, the competition watchdog indicted Juti on three counts for gross misconduct as a government official, for abusing power to break the law or constitution and for a severe breach of ethics. Juti was also indicted on a further count of taking bribes in TOT’s 3G expansion project with SL Consortium, consisting of Samart, Loxley, Nokia and Huawei. Despite an investigation by the Office of the Auditor General into TOT’s contract bidding process (which one rejected vendor, Ericsson, called ‘non-transparent’), the state telco signed the USD487 million contract with the consortium in May 2011.

TeleGeography’s GlobalComms Database recalls that in January 2011 True Corp signed a 14-year marketing contract and wholesale-resale agreement with CAT to offer 3G 850MHz services under the True Move H brand outside of its existing build-transfer-operate (BTO) agreement with the state-owned operator. Under the agreement, True’s subsidiary BFKT leases W-CDMA/HSPA network services to CAT, but in turn another True subsidiary Real Move acts as ‘a reseller of services and capacity’ provided to it by CAT (which also operates its own retail HSPA 850MHz service).

In June 2012 the regulatory authorities decided that the CAT-True partnership violated the Frequency Allocation Act, which prohibits licence holders such as CAT from allowing other parties to control spectrum management on their behalf. However, after certain modifications were made to contracts, in June 2013 the Council of State gave the 3G partnership the all-clear when it decided that the amended public-private operating agreement complied with the law.

True Move H’s W-CDMA/HSPA-based 850MHz network was rolled out rapidly, reaching all 77 of Thailand’s provinces by mid-2012, and by September 2014 coverage had been extended to 7,394 (virtually all) sub-districts and 67,615 villages, with population coverage of approximately 97%. By that date the 3G 850MHz network consisted of around 14,000 BTS.

Meanwhile, in October 2012 True Corp’s wholly owned subsidiary Real Future won a 15-year 2100MHz 3G/4G network operating licence, and True became the first operator in the country to launch commercial 4G mobile services in May 2013 by switching on its 2100MHz network offering both 4G LTE and 3G W-CDMA/HSPA+ services under its own full operating licence (and again under the True Move H brand). True is aiming for a Q2 2015 target of 80% 4G 2100MHz population coverage (via around 9,000 LTE base stations).

Thailand, CAT Telecom, True Corp