DTAC puts the brakes on 3G; TOT to break the bank?

30 Sep 2008

DTAC’s new CEO Tore Johnsen has postponed the Thai cellco’s planned commercial 3G launch until at least the third quarter of next year, until it is satisfied that demand for mobile data services is sufficient, reports the Bangkok Post. On 15 September Johnsen took over from Sigve Brekke, who is now CEO of Telenor Asia, DTAC’s regional parent. Under Brekke, Thailand’s second largest wireless operator by subscribers planned to launch 3G UMTS services using its existing 850MHz frequencies in the first quarter of next year, with nationwide services targeted by mid-year under an investment budget of at least THB5 billion (USD150 million). But Mr Johnsen said, ‘There is no need to rush into offering 3G services as long as demand for mobile data is still not there…We want to make sure that the Thai market is more than ready for 3G, particularly in the mobile data service area.’ The CEO added that DTAC, like many other firms, had been affected by the global financial crisis, Thailand’s sluggish economy, political problems and high oil prices. ‘All these factors combined have reduced people’s purchasing power and depressed the demand for products and services,’ the Post quoted him as saying.

Meanwhile, the same news source writes that state-owned TOT still intends to push ahead with an ambitious plan to invest THB29 billion in rolling out an UMTS network in 2009-11 via its cellular arm Thai Mobile. It aims to sign up at least 350,000 3G subscribers next year and four million by 2013, and expects the service to break even within seven years. However, TOT executives reportedly acknowledge ‘privately’ that the actual costs of the rollout could be higher than original estimates, says the Post. TOT received cabinet approval for the plan last month, and the Information and Communications (ICT) Ministry supports the proposal, but it still requires endorsement from the National Economic and Social Development Board and the Public Debt Management Office. TOT is currently in the process of buying out sister telco CAT’s holding in joint venture ACT Mobile in order to gain full management control of Thai Mobile. The tiny, debt-ridden GSM operator is the country’s only holder of 2100MHz frequencies. Cellular market leader AIS launched a small scale commercial UMTS network in the 900MHz band in May; it is hoped that the state will award 2100MHz concessions to private operators sometime next year.

Thailand, TOT, Thai Mobile, Digital Total Access Communication (DTAC),

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