True Corporation is tentatively moving towards a second batch of asset sales to its telecommunications infrastructure fund in March.
True finance boss Noppadol Dej-Udom predicts a big turnaround in mobile business.
The proceeds from the asset sales will be used to reduce trade debt and finance the group's business development and expansion into fourth-generation (4G) wireless broadband service, said chief financial officer Noppadol Dej-Udom.
The additional assets to be sold to the True Telecoms Growth Infrastructure Fund (TRUEGIF) by True's subsidiary Asia Wireless Communication (AWC) include 8,000 kilometres of fibre-optic cable and 350 of AWC's telecom towers.
TRUEGIF's board approved the second batch of asset sales yesterday.
"TRUEGIF, 30% held by True Corporation, will call a meeting to allow its unit holders the opportunity to cast their votes for the planned asset sales by the end of February," Mr Noppadol said.
"If the unit holders support the plan, the assets can be sold to the fund in early March."
AWC expects to earn 14 billion baht from the asset sales.
True currently has trade debt worth 30 billion baht. Its net financial debt is 40 billion baht.
TRUEGIF has delivered a quarterly dividend of 22 satang per unit for holders purchasing at 10 baht each.
SCB Asset Management, the fund manager, says TRUEGIF has delivered annual dividend growth of 91% or 0.91 baht per unit, with dividend payments of 1.3 billion baht in 2014.
True set up the infrastructure fund in December 2013 and sold its existing and future tower assets to TRUEGIF to cut debt. The fund took over some of True's telecom infrastructure such as towers and fibre-optic cables.
Those assets include 3,000 telecom towers of subsidiary BFKT (Thailand), operated under an agreement with concession owner CAT Telecom; 6,000 towers and 5,112 kilometres of fibre-optic cable and related transmission gear from True Corporation; 1.2 million broadband network ports upcountry; and the right to earn revenue from the fund.
As of last June 30, TRUEGIF had 6,000 telecom towers worth 60 billion baht, including passive telecom assets worth 21 billion baht.
Mr Noppadol acknowledged that TRUEGIF is in talks with bigger rival Advanced Info Service for a possible network-sharing agreement to rent its telecom network facilities.
The fund is also negotiating with two state telecom enterprises, TOT Plc and CAT Telecom, over possible network-sharing deals.
Last November, True signed a network-sharing contract with larger rival Total Access Communication (DTAC) to rent its telecom network facilities over three years for an undisclosed price.
Through its subsidiary DTAC Trinet Co, DTAC plans to rent 100-115 telecom towers in the initial stage to install its 3G mobile base stations operating on the 2100-megahertz spectrum. These should accelerate the expansion of high-speed wireless broadband to serve exploding data demand.
True Corporation is predicting a big turnaround for its True Move mobile unit.
"True Move expects to record a profit for its 2014 operating results after facing losses for the past six years, thanks to the stellar growth of its 3G and 4G subscriber base," Mr Noppadol said.
"The sweeping performance improvement of the mobile business will significantly contribute to a sharp improvement for True Group's 2014 results."
He said the entry of strategic partner China Mobile was the crucial ingredient in improving True Move's profitability.