Cabinet decision could clear way for True-Hutch deal

TeleGeography | Thailand | December 29, 2010
The Thai Cabinet has approved state-owned CAT Telecom’s decision to cancel a plan to buy 100% of its Bangkok-based ‘Hutch’ branded CDMA mobile joint venture from partner Hutchinson Telecommunications International (HTI). The cancellation of the takeover of Hutchison CAT Wireless Multimedia (HCWM), currently 75% owned by HTI and 25% by CAT, could help clear the way for private sector Thai cellco True Move to complete a proposed purchase of HCWM instead. The news on 28 December 2010 sent the share value of True Move’s parent True Corp up 5%, Reuters reports. True’s stock has risen 43% in the past three months on speculation that buying the CDMA business and its associated wireless spectrum in Bangkok and central provinces could speed up the rollout of 3G services.
Earlier this month, the Bangkok Post reported that True could fail in its takeover bid for the Hutch mobile business unless legal disputes between CAT and Hutch worth more than THB1 billion are settled, according to the chief of CAT. However, a True executive expressed confidence that the Hutch takeover is not a dead deal as a new marketing contract could end all legal hurdles and disputes. The Council of State, the government’s legal advisory body, has said that even though Hutch’s business is partially covered by the 1992 Public-Private Joint Venture Act, applicable to Hutch’s use of radio frequencies, construction of basic infrastructure and its marketing, the proposed takeover by True Move could proceed simply by terminating the existing marketing contract and replacing it with a new one.
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