CAT sets end-July target for resolving problems over 3G contracts

The state agency’s chief executive officer, Kitisak Sriprasert, told CAT staff late last week that the problems stemming from the questionable legality of the deals would be cleared by the end of July.
He said CAT and True were in talks to seek ways out of the difficulties, which could lead to revision of the deals.
Kitisak recently said that one solution would be for CAT to buy all the 3G network equipment it had leased from BFKT (Thailand), a True group unit, and invest in the network roll-out on its own to show that it had full control over both the network and its own 850-megahertz spectrum. It would then allow any cellular operator to utilise the network on the MVNO (mobile virtual network operator) basis.
Such a solution is aimed at dealing with the regulatory risk arising from last week’s opinion by the subcommittee of the National Broad-casting and Telecommunications Commission (NBTC), which said that some practices of CAT-True under the deals might be in breach of Article 46 (2) of the 2010 Frequency Allocation Law.
The law prohibits NBTC licence-holders such as CAT from allowing a third party to control its spectrum-use rights.
The watchdog’s subcommittee will reach a final position on its investigation this week, before submitting the outcome for consideration by the NBTC’s telecom committee.
The plan to buy the BFKT network also fits in with CAT’s goal to become a telecom network provider. Invest-ment in and sole ownership of the network would help it avoid the question of whether the deals are subject to the 1992 Public-Private Joint Venture Act.
However, CAT has yet to come up with a clear answer as to how it could finance the purchase of BFKT’s network equipment.

DROP IN REVENUE
Moreover, a True source said that while BFKT might be willing to sell the equipment to CAT, True’s 3G service provider Real Move might not then continue to commit to utilising huge bandwidth on the network in order to provide 3G service. Such a move could reduce CAT’s revenue gain from wholesaling 3G bandwidth on the network to Real Move.
It is also questionable whether any operators besides Real Move would lease the network, as they would prefer to invest in their own 3G networks after receiving 2.1-gigahertz spectrum licences from the NBTC.
However, Kitisak said that even if the cellular operators had their own 3G2.1GHz networks, they might still need to lease BFKT’s 3G-850MHz network to provide a service complementary to their own networks.
True has been pressured on many fronts to bow to CAT’s demand to revise the 3G partnership deals. CAT has suspended all activities under the deals, pending completion of probes into their legality by a number of state agencies.
The National Economic and Social Development Board has also suggested that CAT submit for Cabinet approval its request to spend Bt12 billion on 3G business under the deals. A large part of the money is earmarked for marketing activities for its own retail 3G service under the My brand, and on installing a transmission system to boost 3G bandwidth capacity.
Another significant chunk is for paying the network interconnection fee to other networks that My and Real Move customers make calls to.
A further part of the budget is for paying the fee to the NBTC for the numbers CAT and Real Move have used to provide 3G service, which is overdue.
CAT and two True subsidiaries, Real Future and Real Move, signed deals in January last year to forge a partnership to provide 3G service on CAT’s 850MHz spectrum.
The deals immediately attracted scrutiny from scholars and state agencies over their legality.