New CAT board to decide policy on expiring concessions: outgoing CEO

CAT owns concessions of Digital Phone Co (DPC), TrueMove and Total Access Communication (DTAC).
The DPC and TrueMove concessions both expire at the end of 2013, while that of DTAC runs out in 2018. The combined concession payments account for 65 per cent of CAT’s annual revenue.
Under CAT’s existing plan, it will negotiate with the concession holders over selling their cellular-base-station network assets back to the operators.
The state agency’s previous board had asked CAT to enter into discussions with the concessionaires on the matter, but this could change, pending the new board’s consideration of the issue.
TrueMove has already proposed to CAT that it buy back its 2G network from the agency for Bt10 billion.
Under the build-transfer-operate system, all cellular operators have to transfer their networks to their state concession owners after the contract terms end.
Meanwhile, the CAT board yesterday approved a dividend payment of Bt828 million for the first half of this year, and an additional dividend of Bt1.4 billion for the third quarter, both of which will be paid to its 100-per-cent shareholder, the Finance Ministry.
It also approved Jirayuth’s resignation, effective on December 15. He tendered his resignation on November 14.
He said his decision to stand down, which came after the appointment of a new board, was intended to pave way for the directors to select a new CEO.
Jirayuth, who denied having been pressured into resigning, said he had yet to make a final decision on his future career, but added that he would not take up another post in the telecom sector, possibly working in the financial sector instead.
He also said he would not work in another state enterprise.
The outgoing CEO said his goal at CAT continued to be to ensure the agency’s survival and the future generation of substantial revenue.
Jirayuth said CAT management had formally informed DTAC that it could upgrade its network to provide 3G wireless broadband service under the concession, using the 850MHz spectrum.
This is in line with the recent advice from the Office of the Attorney-General that DTAC could go ahead with such a plan.
Although CAT had told DTAC to await the OAG’s reply, the company went ahead and launched the commercial 3G-850MHz service on 400 base stations in Bangkok on August 16. DTAC insisted it had the right to launch its commercial 3G service under the permit it had secured from the now-defunct National Telecommunications Commission to install and use a 3G-HSPA (high-speed packet access) network.
Jirayuth said CAT is also waiting for the Information and Communications Technology Ministry to support its plan to spend Bt12 billion next year to procure telecom infrastructure to expand its business of wholesaling 3G-850MHz bandwidth capacity nationwide.
He believes CAT can survive |by cashing in on its 3G wholesale-capacity business.
CAT and True Corp’s subsidiaries Real Move and Real Future signed deals in January to collaborate to develop this 3G business. CAT has already wholesaled the 3G capacity to Real Move.
If things go as planned, next year CAT will have between 15,000 and 18,000 3G-850MHz base stations, which are expected to have 10 million customers. This would enable the state agency to make an overall annual profit of at least Bt8 billion, almost the same as the level estimated for this year.
The National Broadcasting and Telecommunications Commission has ordered CAT and True to jointly amend part of their 3G bandwidth wholesale-resale contracts to make them comply with its competition regulations.