New 3G storm set to break

A new 3G storm is brewing for the government, as proposed investments involving the TOT and CAT Telecom are being seen as serving certain groups of busi?nesses and politicians.

Prime Minister Abhisit Vejjajiva and Information and Communications Technology Minister Chuti Krariksh face a fresh critics' outbursts if they decide to support TOT's plan to roll out a new, nationwide 3G net?work at the cost of almost Bt20 bil?lion.

An ICT Ministry source said that if both decided to support the proj?ect, which will be tabled at the Cabinet meeting today, they might risk criti?cism for promoting a project that would only benefit some groups.

However, not supporting the plan - which was added to the Cabinet agenda on Friday by Deputy Prime Minister Suthep Thuagsuban in Abhisit's absence - would make both the premier and Chuti into stumbling blocks to TOT's business plan. Abhisit was away in New York when Suthep tabled the plan.

A similar dilemma awaits CAT Telecom's planned purchase of the wireless network from Hutchison Telecom. The government approved the budget for CAT in April, but Chuti wanted the price to be brought down to Bt4 billion from Bt7.2 billion.

Chuti said yesterday that he could not tell if the Cabinet would today consider the TOT investment project.

The project was put forward for Cabinet consideration several times before, but the Cabinet always asked TOT and related state enterprises to meticulously review it to ensure max?imum commercial viability.

It is apparent that TOT wants to roll out the network soon, before any private competitors enter the 3G field. The Supreme Administrative Court recently ruled to temporarily suspend the planned 3G licence auction by the National Telecommunications Commission (NTC) until the Central Administrative Court comes to a final decision on CAT Telecom's case chal?lenging the commission's licensing authority.

Last week, labour unions from both TOT and CAT criticised Chuti for his negligence in supporting the two state agencies protecting their interest from the possible effect of NTC's 3G licensing.

TOT's 3G nationwide network project was first approved in September 2008, when TOT pro?posed to invest Bt29 billion on 5,220 base stations.

In August, TOT's board cut the budget down to Bt19.980 billion and increased the number of base stations to 5,320. Of the total, TOT will spend Bt17.450 billion on network equip?ment and pay the rest to suppliers for the expansion of its existing 3G net?work in Greater Bangkok.

A telecom industry source said Abhisit was also concerned about TOT's plan to call for a local bid of its 3G network, instead of an interna?tional one. TOT said the local bid could be completed in a shorter time.

Under an international bid, sup?pliers will need to seek their own financing, while under a local bid, stateowned Krung Thai Bank will be asked to lend to the local bid winner.

TOT estimated that the nation?wide project would breakeven with?in seven years and targets 7.4 million subscribers by 2015, up from the 5 million estimated in the previous plan. TOT's 3G network in Greater Bangkok had around 200,000 sub?scribers after it debuted last December.

Chuti recently also ordered CAT to talk Hutchison Telecom into lower?ing the price of its CDMA 2000 1x cellular network to about Bt4 billion. That figure is lower than the Bt7.2 billion CAT was prepared to pay to the Hong Kong telecom operator to take over its code division multiple access network and telecom businesses in Thailand.

Chuti reasoned that it was not nec?essary for CAT to pay a high price for the network and that it should save money for something else as part of the state plan to promote CAT and TOT as national network providers.

Abhisit said yesterday said that the Cabinet was ready to review its April decision allowing CAT to take over the CDMA network if the ICT minister proposes it.

CAT wants to merge the Hutchison network, which serves 25 provinces, with its own CDMA net?work in 51 provinces to provide seam?less nationwide service.

In a separate matter, Federation of Thai Industries' chairman Payungsak Chartsutipol urged the government to solve regulatory risks in Thailand to shore up foreign investors' confi?dence.

He said the temporary suspension of the NTC's 3Glicence auction affected the confidence of foreign investors and made them see Thailand as having several regulato?ry risks. He made the remark yester?day at the third SCB SMEFTI Factory Outlet fair.