Hutch to exit CAT joint venture, but can it agree a price?

19 Nov 2008

Hong Kong-based telecoms group Hutchison Telecom International (HTIL) has agreed to sell its stake in Thai mobile operator Hutchison CAT Wireless Multimedia (HCWM) to its local joint venture partner CAT Telecom, reports local new source The Nation, quoting CAT president Phisal Jorpocha-udom. HTIL and the Thai state-run telco currently own 74% and 26% respectively in HCWM, which offers CDMA2000-based mobile services in 25 central Thai provinces under the Hutch brand, whilst CAT wholly owns a CDMA network covering the other 51 northern and southern provinces of the country, using the CAT CDMA brand. The pair have struggled to agree on a nationwide strategy to integrate and market their services. The CAT president said that the next step would be for both parties to hire financial advisers to evaluate the value of the business. TeleGeography notes that the issue of asset valuation has previously been a stumbling block in the joint venture’s attempts to form a cohesive future strategy. HCWM has evaded Thai laws capping foreign shareholdings to under 50% because it ‘markets’ telecoms services rather than operating a network, whilst the actual telecoms licence holder is CAT. The network over which Hutch services are marketed is leased from BFKT, a wholly owned subsidiary of HTIL. In August CAT said it would offer to buy the BFKT network for THB6 billion (USD173 million), but HTIL has previously estimated its value at THB30 billion.

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