IHS Global Insight Perspective | |
Significance | True will acquire Hutchison's telecoms assets in Thailand. |
Implications | The move means Hutchison's exit from the Thai market. |
Outlook | True will leverage Hutchison's assets to enhance its position in the mobile segment and offer 3G services based on the acquired network. |
True Corp today announced a deal worth 6.3 billion baht (US$208.8 million) that will effectively give it control over the Thai operations of Hong Kong-based Hutchison Telecommunications International Ltd (HTIL), Dow Jones reports.
True's unit, Real Move, has entered into an agreement to buy a 92.5% stake in Hutchison Wireless Multimedia Holdings for 4.35 million baht. Hutchison Wireless Multimedia Holdings owns a 73.92% stake in Hutchison CAT Wireless MultiMedia Co, which provides services under a marketing agreement with state-owned CAT Telecom.
Meanwhile, another unit of True, Real Future, will purchase all shares in BFKT for 1 billion baht. As part of the deal, Real Future will provide a loan of up to 6.3 billion baht to BFKT after the acquisition for the latter to repay its debt. True plans to borrow up to 6.3 billion baht from Siam Commercial Bank to finance Real Future's lending. BFKT wholly owns Hutchison MultiMedia Services (Thailand) Co. and Hutchison Telecommunications (Thailand) Co.
Upon completion of the deal, BFKT would still be the provider of telecoms network equipment and accessories to CAT Telecom, and continue to provide maintenance services for these to CAT. The rental and provision of services rendered by BFKT will be based on HSPA technology, which will be supplied to CAT throughout Thailand. Real Move will resell service and capacity of the mobile phone network that it will buy from CAT.
Outlook and Implications
The move will help True to secure its future, as its 2G mobile phone concession, granted by the state-owned firm CAT Telecom, is due to expire in two years' time, while the timetable of 3G licensing for private operators is as yet unclear. The concessions of True's two bigger rivals, AIS and DTAC, are due to expire in 2015 and 2018 respectively. In September, a Thai court issued an injunction against the planned auction of 3G mobile licences to private operators, after state-owned firms filed petitions challenging the authority of the National Telecommunications Commission (NTC) to allocate the 2.1-GHz frequency spectrum used for 3G services (see Thailand: 23 September 2010: Thai Supreme Administrative Court Upholds Injunction Against 3G Auction Plan). True's mobile phone unit, True Move, is currently providing 3G mobile services on a trial basis under a concession with CAT. The service is based on HSPA in the 850-MHz frequency band. Meanwhile, True plans to provide 3G services through Hutchison's operation following the acquisition. Hutchison CAT Wireless Multimedia aims to migrate all CDMA technology customers to HSPA within two years.