CAT Telecom's mobile venture faces legal hurdles

18 Oct 2006

(Bangkok Post via NewsEdge) CAT Telecom is facing a growing threat to its business operations because of mounting legal questions about its existing mobile phone venture and the plans to expand it.

The Office of the Auditor-General has been examining the transparency of the business relationship between the state telecom enterprise and its Hong Kong partner, Hutchison, in the operation of the Hutch CDMA service in Bangkok and 25 central provinces.

Also, the Office had asked CAT Telecom why it did not fine its Chinese contractor, Huawei Technologies, for late delivery of base stations being constructed to expand the CDMA service nationwide.

Huawei is building 1,600 base stations in 51 provinces under a contract valued at 7.2 billion baht ($192.3 million). It failed to deliver some of the 800 stations under the first phase of the contract, which allowed CAT to assess late-delivery fines of 90 million baht ($2.4 million) a day.

Information and Communications Technology minister Sittichai Pokai-udom said the Office believed that CAT Telecom had put itself at a severe disadvantage under a two-tier agreement to run the existing Hutch cellular service.

The Office said that while CAT owned the project and the radio spectrum, it had signed an agreement to lease the network from Hutchison subsidiary BFKT to operate the service. It also signed a separate marketing agreement to allow Hutchison CAT Wireless Multi Media to market the service in exchange for a 26% free-of-charge holding in the joint venture and a 20% share of its revenue.

The Auditor-General believes the 20% share is too low.

© 2006 Bangkok Post

© 2006 Dialog, a Thomson business. All rights reserved

Related content

Follow Telecom Asia Sport!
No Comments Yet! Be the first to share what you think!
This website uses cookies
This provides customers with a personalized experience and increases the efficiency of visiting the site, allowing us to provide the most efficient service. By using the website and accepting the terms of the policy, you consent to the use of cookies in accordance with the terms of this policy.