True, AIS could pounce on Hutchison CAT

12 Nov 2010

Thai GSM mobile operators True Move and Advanced Info Service (AIS) are both rumoured to be looking to take over smaller CDMA-based rival Hutchison CAT Wireless Multimedia (HCWM, Hutch) following the recent failure of state-run CAT Telecom to conclude a deal with its Hong Kong-based partner Hutchison to take full control of the joint venture, reports the Bangkok Post. The acquisition would be a shortcut to providing 3G mobile broadband services in the absence of UMTS licensing, which has been suspended until next year following legal disputes. Hutch has a fledgling 3G CDMA2000 1xEV-DO network covering some areas of its CDMA2000 footprint across Bangkok and 25 central provinces, and CAT intends to upgrade the entire infrastructure to EV-DO and integrate it with its own ‘CAT CDMA’ EV-DO network covering northern and southern regions. Having come to agreement in April 2010 on a THB7.5 billion (USD250 million) buyout of Hutch, CAT was subsequently ordered by the government to renegotiate the deal to around THB4 billion, but Hutchison was reportedly unprepared to settle for less than THB6.6 billion.

CEO of True Move’s parent True Corp, Supachai Chearavanont, previously denied his company was interested in Hutch, but True vice-chairman Athueck Asvanond yesterday said there was a series of negotiations on many points between the two firms, although he would not confirm whether an acquisition deal was on the cards. CAT Telecom president Jirayuth Roongsrithong said he could not confirm if there were negotiations involving True. However, he said if a deal did happen, it would not be concluded easily because both True and CAT had ongoing disputes with Hutch. Mr Jirayuth acknowledged that Hutch could theoretically strike a deal with any company, including True or Thai mobile market leader AIS. The Post quoted an industry source as saying that AIS is also interested in buying Hutch to obtain the marketing contract signed between CAT and Hutch which has around five more years to run, with the key factor being the right to use and market services over 10MHz of 850MHz band spectrum. The same source said there was a ‘strong possibility’ that True Move executives had held talks with Hutchison in Hong Kong and are already discussing due diligence.

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