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True, AIS pursue Hutch

Posted by arnon_k On November - 12 - 2010 ADD COMMENTS

Agreement could be shortcut to 3G service

True Move and Advanced Info Service (AIS) are both looking to take over Hutch’s tiny mobile business now that CAT Telecom has failed to conclude a deal with its Hong Kong-based partner Hutchison.

An industry source said True Move is in negotiations with Hutchison executives and hopes to conclude a deal soon for Hutchison CAT Wireless Multimedia and its network covering 25 central provinces.

The acquisition would be a shortcut to providing 3G wireless broadband services in the absence of full commercial 3G licensing, which has been delayed until next year because of legal problems.

Hutchison rejected CAT Telecom’s proposal to take control of Hutch for four billion baht. It wanted US$220 million or 6.6 billion baht at the time the talks started.

CAT controls 26% of the Hutch joint venture while the rest is owned by Hutchison. The Hutch CDMA service has about 1.5 million users compared with more than 65 million customers for the three market leaders: AIS, DTAC and True Move.

True Corporation chief executive Supachai Chearavanont previously denied his company was interested in Hutch.

However, True vice-chairman Athueck Asvanond yesterday said there was a series of negotiations on many points between the two firms, but he could not confirm whether an acquisition deal really existed.

“I, as a legal counsellor, would know details in the areas involved with the law,” he said. “Sometimes the shareholders have done deals that I did not acknowledge.”

CAT Telecom president Jirayuth Roongsrithong said he could not confirm if there were negotiations involving True.

However, he said if a deal did happen, it would not be concluded easily because True itself and CAT Telecom still had disputes with Hutch.

“So if talk that a deal is under way is true, there needs to be a person who can clear everything up to get the deal to proceed,” he said.

Mr Jirayuth acknowledged that a deal with Hutch could be struck with anybody, even True or AIS.

Earlier, he said if CAT could conclude the deal with Hutch, it would enable the state telecom enterprise to generate four billion baht in revenue in the first year of operations and add 1.5 million Hutch customers once it merges its network with the one that CAT operates in the other 51 provinces.

Another industry source said AIS is also interested in buying Hutch to obtain the marketing contract.

The marketing contract CAT signed with Hutch still has five more years to run, said the source, adding that a key to the contract is the right to use and market the 10 Megahertz of bandwidth on the 850 MHz spectrum.

The source also said there is a strong possibility that True Move executives have held talks with Hutchison in Hong Kong and are already discussing due diligence.

He said the deal would benefit True Move more than any other operator since it has only three years left on its mobile concession with CAT.

In addition, True is still awaiting a legal ruling from the government on use of 5 MHz of bandwidth on the 850 MHz spectrum to provide more 3G services.

The source said if the committee overseeing joint public-private investment endorsed True’s request, the government was expected to face criticism for effectively granting a new licence on a new frequency to True Move.

Besides, the source said, the marketing contract that CAT gave to Hutch is not a concession and therefore it could be extended automatically after the contract expires over the next five years.

If CAT expands the CDMA network nationwide, it will merely add business opportunities for True to provide 3G services using HSPA technology in addition to Hutch’s central network.

True shares closed down eight satang yesterday on the Stock Exchange of Thailand to 4.90 baht in trade worth 805 million baht.

Property stocks hit by BoT move on loans

Posted by arnon_k On November - 12 - 2010 ADD COMMENTS

The stocks of major Thai residential property firms plunged yesterday in reaction to the Bank of Thailand’s plan to impose stringent lending rules for mortgage loans, a move that has alarmed a few leading figures in the industry.
While the SET Index fell for the third straight day to close at 1,029.86, Pruksa Real Estate, the country’s second biggest developer by market capitalisation, lost 6.5 per cent to Bt20, while Asian Property Development fell 7.3 per cent to Bt5.7.

Supalai, another major developer, plunged 7.9 per cent to Bt10.5.

The stock plunge followed the Bank of Thailand’s plan to impose more stringent rules on mortgage loans in a precautionary move to prevent an asset-price bubble.

The sub-index on property development stocks fell 2.9 per cent yesterday.

The yuan may substitute for the US dollar in intra-Asian trade in the future when bond markets in the region are well developed, said Kiat Sithi-amorn, president of the Thai Trade Representative Office.
The presence of the Industrial and Commercial Bank of China (ICBC) in Thailand will promote the role of the Chinese currency in the region, he told The Nation ahead of the Group of 20 and Asia-Pacific Economic Cooperation summits.

Kiat said Thailand supported efforts of G-20 and Apec leaders to conclude multilateral free-trade agreements under the World Trade Organisation by next year. He also said the government would pursue an FTA with the European Union.

Regarding the so-called currency wars, where the United States and China are engaging in competitive cur?rency deval?uation, Kiat said this must not lead to trade pro?tectionism.

He said a greater role for the yuan in Asia is expected to ben?efit Thailand and the region.

To expand the role of the yuan, the region has to develop bond markets, he suggested. He noted that investors held US dollars because they could reinvest them in the US bond market, in particularly buying US government bonds.

The weakening of the US economy has weakened the dol?lar and Thai exporters risk high volatility of the baht exchange rate. Meanwhile, the fast growth of the Chinese econ?omy along with the emerging economic power of the East has made the yuan more attractive.

Kiart expects ICBC to play a greater role in promoting yuan transactions, as it is world’s largest bank in term of assets and the number of deposit accounts.

ICBC recently bought ACL Bank and established ICBC (Thailand), and it will offer yuan loans to Thai exporters. ICBC also has branches in Singapore, Malaysia, Indonesia and Vietnam.

EU allegation against THAI dropped

Posted by arnon_k On November - 11 - 2010 ADD COMMENTS

The European Commission (EC) has concluded its investigation and dropped charges against Thai Airways International (THAI) for alleged involvement in air freight collusion.
THAI Vice President of Legal and Compliance Department, Niruj Maneepun, said the company remains confident that as the national carrier of the Kingdom of Thailand, THAI has followed international rules and regulations including those in the EU.

Since 2008 THAI has set aside a contingency fund of Bt4.29 billion for cases pertaining to competition laws of the different regions.

Tisco Securities said in its research that the reserves could be converted to net profit in the fourth quarter. If so, the airline’s net profit this year could hit a new record at Bt23.9 billion, from the previous estimate of Bt19.6 billion.

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