CAT Telecom has outlined its new strategic direction for the fourth-generation (4G) mobile business, hoping to speed up execution in the face of a dynamic and competitive environment next year.
Major elements of the state enterprise's strategy include plans for a broad strategic partnership with private mobile operators to help CAT provide 4G service on 20 megahertz of bandwidth on the 1800-MHz spectrum.
CAT granted a concession to DTAC to use 50 MHz of the 1800 MHz to provide 2G mobile service. DTAC is now using only the first half of the bandwidth, which it wants to upgrade to provide 4G as a complement to its existing 4G service on the 2.1-GHz band.
Of the remaining idle 25 MHz of the 1800-MHz spectrum, CAT transferred 5 MHz to the National Broadcasting and Telecommunications Commission (NBTC) for 4G spectrum auctions and requested to use the remaining 20 MHz to provide its own 4G service.
DTAC's concession will expire in 2018.
The NBTC last week approved CAT's request to upgrade the bandwidth for providing 4G service until 2018.
According to CAT acting president Col Sanpachai Huvananda, CAT is in talks with DTAC for a possible partnership agreement to help the state enterprise provide 4G service on its cellular network under a mobile virtual network operator (MVNO) business model.
An MVNO is a company that provides mobile services but does not have its own cellular network.
Col Sanpachai said DTAC proposed to invest alone in the 4G network for CAT in exchange for allowing it to lease all capacity of the network.
DTAC would lease the network equipment to CAT, and the state enterprise would then sell the network capacity to DTAC through a wholesale deal.
But CAT wants DTAC to lease only half of the 4G network. The remaining 50% of the capacity would be rented to other operators.
"A conclusion is expected next month," said Col Sanpachai, adding that DTAC will be a major MVNO of CAT to provide 4G service on the 1800-MHz spectrum.
CAT now also operates 3G mobile service on 15 MHz of bandwidth on the 850-MHz spectrum through MVNOs with Real Move (the 3G arm of True Corporation), Data CDMA Co, 168 Communications Co and the newly appointed Samart I Mobile Plc.
Col Sanpachai said CAT is seeking government support to extend the use of the 1800-MHz spectrum to 2025, rather than 2018 as allowed by the NBTC, in order to attract MVNOs to help it run 4G mobile business.
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.
Col Sanpachai cited the strong growth of the mobile business for the overall revenue improvement.
Mobile business contributed up to 51% of CAT's total revenue.
CAT expects to report a profit of 3.4 billion baht on revenue of 53.5 billion in 2015, he said.