TOT to buy CAT stake, absorb debts

01 Sep 2006

TOT insists it will buy CAT Telecom's 42% stake in Thai Mobile for 1.3 billion baht ($35 million) and also will absorb all 3 billion baht ($79.8 million) in accumulated debt incurred by the mobile phone joint venture.

TOT deputy president Chamras Tantreesukhon made the offer ahead of a meeting the two state enterprises plan to hold to discuss the purchase.

Chamras said the price was reasonable given the amount of debt Thai Mobile had accumulated.

TOT already owns the other 58% of Thai Mobile. It is the only mobile operator to be allocated 3G bandwidth in the 1900-2000 Megahertz range. However, it has only 100,000 subscribers in a market of 32 million, having been plagued by infighting between its two state shareholders for four years.

TOT wants to take full control of Thai Mobile, which is intended to be its flagship. Thai Mobile's key asset is the 1900 MHz spectrum, which could be used for potentially lucrative 3G applications.

Chamras said he was optimistic that if negotiations today could reach a final conclusion, TOT would be ready to begin marketing Thai Mobile services and also to use the 3G spectrum.

The two state enterprises had agreed earlier on a price of 4 billion baht ($106 million) for CAT's shareholding when Suwit Khunkitti was the Information and Communications Technology minister. However, there was never any follow-up.

A source on the CAT board said it would insist on the price as appropriate, even though Thai Mobile did not add any value to CAT

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