More twists to complex True-Hutch deal

Construction News

Legal wrangling over the True-Hutch takeover deal looks set to grow more complicated with the telecommunications conglomerate proposing to invest in a third-generation mobile network for CAT Telecom on its own to accelerate planned 3G mobile services nationwide.

The proposal is designed to be a win-win solution for CAT, enabling the state telecom enterprise to become a network provider under its joint-venture policy, said Athueck Asvanund, a vice-chairman of True Corporation.

However, industry veterans expressed scepticism, with one of them quoted as saying: “What right does True have to build a network instead of CAT?”

Mr Athueck insists True has no intention of becoming a network provider instead of a service provider.

True will ask for permission from its concession holder before making any move to build a high-speed packet access-based (HSPA) network in desired areas.

“The proposal is aimed at eliminating any red tape surrounding time-consuming procurements by the state telecom enterprise and preventing future disagreements over business and investment plans between the two parties,” said Mr Athueck.

He said CAT will have first priority in purchasing its network and equipment from True, while True will set up a middle company to monitor network construction costs for fairness.

“We can confirm we will not accelerate expansion of the HSPA network without sounding out the business,” said Mr Athueck.

Mr Athueck said network construction would comprise three parts – tower, transmission and platform equipment.

He believes CAT would prefer to invest in the tower and transmission in its role as network provider, while True would focus on the platform equipment to determine service quality itself.

True is now awaiting a clear decision from CAT’s board on finalising a new contract for True’s subsidiaries in the Hutch deal and a time frame for signing, said Mr Athueck.

True, through its subsidiaries Real Move and Future Move, plans to resell the Hutch service by leasing mobile network capacity in megabit rates from CAT.

The company signed a takeover deal with Hutchison Group last year, making it the major shareholder in Hutch and eligible to market code division multiple access (CDMA) mobile services in 25 central provinces including Bangkok.

However, the purchase deal is not yet complete, as CAT, the owner of the 850-megahertz frequency and the CDMA service, must sign a new contract with the True Group.

True would clear all of the debts of the four companies in its Hutch mobile business in Thailand to Hutchison, worth up to 6.3 billion baht.

Hutch has about 600,000 customers in a mobile market of 69 million.

Suranant Wongwittayakamchorn, a deputy member of the National Broadcasting and Telecommunications Commission, said the deal is a pure business negotiation with CAT, and True has the right to set its own details for mutual benefit.


Leave a Reply