TRUE's investments in 3G network 'could lead to short-term losses'

True is expected to spend Bt40 billion this year on expansion of the 3G-High Speed Packet Access (HSPA) base station network to more than 13,000 bases from the existing 5,000 nation-wide. Last year it spent around Bt14 billion on the HSPA network rollout.

The rollout is part of its partnership with CAT Telecom to provide the 3G-850 MHz service. True subsidiary BFKT (Thailand) has procured the HSPA network equipment for CAT to generate 3G bandwidth for wholesale. True subsidiary Real Move has leased this bandwidth from CAT to provide service under the TrueMove H brand. The company targets 4 million subscribers this year, up from around one million at present.

Suphachai added that CAT had already sent its first 3G-bandwidth leasing bill to Real Move, which started providing the service last August.

He said that next year True would also evaluate the costs to see if it can win the third-quarter bid to acquire a 2.1GHz licence from the National Broadcasting and Telecommunica-tions Commission (NBTC). The costs will involve the licence price and the 3G-2.1GHz network rollout.

But he added that the network rollout cost would not be high as the company can install the equipment on its existing telecom facilities.

Each telecom operator plans to spend around Bt40 billion during the first two or three years on the 3G-2.1GHz network rollout if they can win licences.

NEW SET-TOP BOXES

True’s pay-TV operator, TrueVisions, is also investing more than Bt2 billion to introduce 500,000 high-definition smart set-top boxes to replace the old versions used by current subscribers to its Platinum, Gold and Silver packages. The boxes are designed to prevent hacking by illegal pay-TV operators.

According to its filing to the Stock Exchange of Thailand, True’s costs related to the launch and expansion of 3G-850MHz service by Real Move, plus flood-related expenses and TrueMove’s higher concession fee, softened 2011 full-year EBITDA (earnings before interest, taxes, depreciation, and amortisation), which declined 7 per cent year on year to Bt17.1 billion. Net income from ongoing operations, excluding deferred income tax, was a loss of Bt3.2 billion in 2011.

Several state authorities are probing the legality of the 3G service-partnership deals with CAT. The Information and Communica-tions Technology Ministry’s committee has completed its probe, but has declined to disclose the results.

Suphachai has reaffirmed that the deals were made in strict compliance with the law.
“I’m not paranoid about the probe. We’ve kept on moving,” he added.

A CAT source said that if the ICT Ministry rules that the deals breach any law, the ministry would send the case back to CAT’s board to make the decision on how to proceed next.

The Senate’s good governance and anti-corruption committee concluded last month that the network rental deals between CAT and BFKT might breach the Frequency Allocation Law. It forwarded its conclusion to be further investigated by the National Anti-Corruption Commission and the National Broadcasting and Telecommunica-tions Commission.

Last week, True launched a new initiative under its Plook Panya (Growing Wisdom) Corporate Social Responsibility (CSR) programme. It aims to provide sets comprising a TrueMove H 3G SIM card and an aircard to 1,600 schools this year in 12 provinces, and also to some hospitals. The devices will enable them to access its 3G network for Internet connection on an unlimited basis free of charge for one year. It kicked off the new initiative in Nakhon Ratchasima last week.