CAT Telecom plans to set up a joint venture with private telecom companies to carry out its data centre business plan by mid-2016.
The development will tap into the growing and lucrative data centre market and will comply with the State Enterprises Policy Commission's ( superboard) recommendations.
The state telecom will hold a 49% stake in the joint venture company and prospective partners a combined 51%, said CAT acting president Col Sanpachai Huvananda.
Five telecom companies have proposed participation in CAT'S data centre business. "We will select only two companies for the partnership," he said.
CAT is supervised by the superboard and must follow a business turnaround strategy to stem its ailing finances and revive business. It needs to focus on lucrative businesses to create new revenue streams, offsetting vanished concession revenue.
Even though the data centre business generated only 2 billion baht, or 5% of CAT's total revenues, Col Sanpachai said it had massive growth potential in a digital economy. CAT plans to lease its data centre facilities to prospective state agencies and private companies.
CAT has seven data centres in major provinces including Bangkok, with a combined 1,000 racks hosting servers. Its services include co-location, temporary offices, high-speed internet, disaster recovery and managed security.
The state telecom was on the verge of creating a national data centre to eliminate unnecessary investment of 8 billion baht a year while reducing the cost of maintenance and human resources.
The government has allowed CAT to expand its data centre and provide services to state agencies. It ordered other state agencies to stop developing data centres, which now number 112, to create a single national data centre to serve the digital economy.
National data centres are expected to significantly lift the competitiveness of Thailand's IT infrastructure. The government plans to build a national data centre for 30-40 billion baht.
CAT posted 43.5 billion baht in consolidated revenue in the first 10 months of this year, an increase of 3.5 billion from the same period in 2014. Net profit was 3.2 billion baht year-on-year, up 1.3 billion.
"Our projection is to reach profit of 3.4 billion on revenue of 53.5 billion in 2015," said Col Sanpachai.