CAT board accepts units merger
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CAT board accepts units merger

Subsidiary for data, cable consolidation

CAT board accepts units merger
Executives at the riverside CAT Tower of state-owned CAT Telecom have approved a plan to consolidate all internet gateways under a National Gateway Data Centre. (File photo by Panupong Changchai)

The board of CAT Telecom has finally approved the consolidation of its internet data centre and submarine cable network businesses after nearly six months of uncertainty.

A new subsidiary company, National Gateway Data Centre Co, will be formed by mid-2017, said CAT president Col Sanpachai Huvanandana.

The board approved the consolidation plan last week. CAT management executives will have to make a proposal and submit it to the State Enterprises Policy Commission, known as superboard, for final approval.

"The development will drive greater efficiency in our core network infrastructure for telecom and internet connectivity, in order to attract international technology companies and private organisations to invest in cloud computing and computer servers in the country through CAT's integrated digital infrastructure," he said.

Mr Sanpachai said CAT expects the superboard to give it the green light to move ahead with the consolidation programme, enabling it to create more practical business models to keep up with the changing business environment.

CAT Telecom now owns six submarine cable routes in Thailand.

A report by the Telecommunications Association of Thailand found that Thailand's international internet traffic in the first nine years grew by 81% with two terabits per second, and is expected to reach 38 terabits by 2020.

The six submarine routes of CAT have full capacity of 10 terabits per second.

In March this year, the government allocated 5 billion baht to assign CAT to develop new submarine cable routes, and has targeted to start investing in the new routes from next year.

For data centres, CAT has a combined 2,000 racks of servers that run 500 square metres of data centres, of which 1,000 racks are operated by the newest data centre Nonthaburi II that was officially launched last year with an investment budget of 500 million baht.

Nonthaburi II is a significant step in the company's strategies in data centre development, paving the way for it to lead sector in the country as well as the Asean region.

CAT and TOT now operate under survival plans in compliance with the superboard's policy.

TOT has 15,367 employees, while CAT has 5,995.

The superboard had previously scrapped its original plan to merge three core businesses of TOT and CAT Telecom, citing difficulties in evaluating assets and settling operational processes.

The original plan of the merger process was to partially consolidate three similar core businesses -- transmission and fibre-optics networks, undersea cable networks and internet data centres -- in a bid to eliminate duplicate investments and keep up with a changing marketplace, said a source at the Digital Economy and Society Ministry.

Wilailuck Chulewatanakul, permanent digital economy secretary, said the superboard preferred TOT to take charge of the transmission and fibre-optics network business through the National Broadband Network Co, soon to be established.

CAT will be responsible for undersea cable networks and internet data centres through two more new companies: National Gateway Network Co and Internet Data Centre Co.

The scope of responsibilities are based on the strengths and the ownership of telecom infrastructure assets of each enterprise.

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