CAT Telecom aims to tighten up for efficiency and profit

“It’s the first step to make CAT lean and more efficient in serving customers,” chief executive officer Kittisak Sriprasert said.

“CAT will try to bundle all solutions and products into one package to offer to customers,” he said.

The state enterprise needs to prepare for fiercer competition from the imminent launch of third-generation cellular services by private operators licensed by the National Broadcasting and Telecommunications Commission (NBTC).

CAT’s board has approved the restructuring plan, 2013-17 financial performance improvement plan and the plan to manage network assets and spectra under the concessions it has granted.

Next year, senior executive vice president posts will be consolidated to 10 from the present 12 and more resources will be allocated to the units that can generate high revenue.

CAT still has room to compete in the 3G service market against the three winners of slots on the 2.1-gigahertz spectrum, thanks to the fast-growing consumer demand for mobile data.

“Actually, CAT regards every operator as a partner,” he said.

CAT and True’s subsidiaries Real Future and Real Move in January 2011 signed the network rental and bandwidth wholesale-resale contracts to forge a partnership to provide 3G service on the 850-megahertz band.

The CAT-True 3G contracts have provoked criticism and a series of probes by authorities over their doubtful legality. The NBTC’s telecom committee has ordered CAT and True to hurry and finish the joint amendment of their 3G service partnership contracts to make them comply with the Frequency Allocation Law. The deadline for their complete joint contract revision has been extended twice.

Kittisak said the two parties had almost completed the joint contract revision.

CAT’s vision is to become the national telecom network provider. Its short-term strategy is to maximise existing network assets to make revenue, while its long-term plan is to provide advanced wireless broadband services such as 4G.

The state enterprise has to make a big change to deal with many impending risks. The 1.8GHz concessions of TrueMove and Digital Phone Co will end next September. Starting in 2014, TOT and CAT will have to pass their concession revenue to the NBTC, which will transfer the funds to the state coffers, as stipulated by the Frequency Allocation Law.

CAT is expected to suffer a net loss of Bt3 billion this year, Kittisak said. If excluding concession revenue, CAT is expected to suffer a net loss of Bt1.81 billion next year.  

It is expected to break even in 2014 before earning Bt595.16 million in 2015, Bt2.6 billion in 2016 and Bt4.11 billion in 2017, according to its five-year financial performance forecast. 

CAT expects concession revenue of Bt25.66 billion in 2013, Bt13.37 billion in 2014, Bt10.79 billion in 2015, Bt7.51 billion in 2016 and Bt7.23 billion in 2017. Its wireless business is expected to contribute revenue of Bt25.53 billion next year, Bt35.02 billion in 2014, Bt42.57 billion in 2015, Bt49.22 billion in 2016, and Bt51.56 billion in 2017.

It has forecast wireless business revenue of Bt25.53 billion in 2013 before rising to Bt35.02 billion in 2014, Bt42.58 billion in 2015, Bt49.22 billion in 2016 and Bt51.56 billion in 2017.