True, CAT sign 3G agreement

Dylan Bushell-Embling
28 Jan 2011

Thailand's True Move has reached a deal with state-owned CAT that will pave the way for True's acquisition of Hutchison's Thai assets and to offer nationwide HSPA services.

Announcing the tie-up, True Move parent True Corp said the deal paves the way for a national 3G rollout within two years.

The company said in a regulatory filing it plans to convert the 1,400 base stations owned by the Hutchison units from CDMA to HSPA, and has arranged to become a reseller of CAT HSPA services until 2026.

CAT will meanwhile convert a further 1,600 base stations to HSPA. The parties will also arrange to trade or lease parts of these networks.

True arranged to acquire Hutchison's Thai assets for 4.35 billion baht ($141 million) in late December. But the deal had been thrown in doubt by regulatory uncertainty - as well as by CAT's repeated complaints that it was losing money under its concession deal with Hutchison.

CAT, which is also already True Move's concession holder, is currently a partner in Thai JV Hutchison CAT Wireless Multimedia.

True Move will acquire Hutchison's 800,000 customers in the deal, and aims to migrate them onto HSPA within two years.

The companies also signed a two-year CDMA 2000 network sharing agreement covering a number of provinces.

True told the Bangkok Post the arrangements will see up to 6 billion baht spent on HSPA upgrades. It has forecast annual revenue contribution of 4.3 billion baht from its Hutchison acquisition.

True will pay 20% of its service revenue to CAT under the accompanying concession agreements.

The deal gives third-ranked True Move a leg up on its competition. The operator now has operating arrangements that last well past the tenure of its larger rivals' existing concessions – as well as a means of developing 3G services even while the government sorts out the regulatory mess impeding a long-awaited 3G spectrum auction.

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