CAT Telecom has set aside at least 30 billion baht to bid on a licence to provide fourth-generation (4G) wireless broadband service together with a foreign strategic partner.
The state telecom enterprise is now in talks with South Korean's SK Telecom and a Japanese telecommunications company to jointly provide 4G service under the mobile virtual network operator (MVNO) model.
"We need greater bandwidth frequency in order to efficiently provide 4G service and increase revenue," said Viroj Tocharoenvanith, senior executive vice-president of CAT Telecom.
CAT has accumulated profits of over 30 billion baht, generating annual interest revenue of 1.5 billion, he said.
The National Broadcasting and Telecommunications Commission (NBTC) recently announced the auction for the 1800-megahertz spectrum will take place on Nov 11, while the 900-MHz spectrum is slotted to be up for sale on Dec 15.
However, Mr Viroj said CAT would use less of its own money on the 4G spectrum auctions if the state enterprise could find a strategic foreign partner to jointly bid and provide 4G mobile service.
He said CAT started negotiating with SK Telecom on the possibility of a strategic partnership in 2013. A resolution on the partnership is expected to be settled by September, said Mr Viroj.
He expects the NBTC to announce a new draft auction design for 4G licences over the next few months.
The regulator divided the 25-MHz bandwidth of the 1800-MHz spectrum into two slots, 12.5 MHz each, and set a minimum bid of 11.6 billion baht for each block.
The auctions for 20 MHz of bandwidth on the 900-MHz spectrum will also be divided into two slots, 10 MHz each, with a minimum bid of 11.262 billion baht for a block.
All four slots of 45 MHz of bandwidth will be sold for a minimum combined value of 42.9 billion baht.
Mr Viroj said CAT truly wanted to participate in the auctions, noting that bandwidth for 4G spectrum is crucial for telecom companies to capitalise on exploding mobile data and application demands.
"We don't want to miss the train on lucrative 4G business opportunities," he said.
CAT is confident it will win approval from the cabinet for its 4G auction plan. The state enterprise needs to propose its investment plan for 4G business to the cabinet if it wins a licence.
He stressed that CAT can participate in the 4G auctions, similar to MCOT Plc joining the bidding for terrestrial digital-TV licensing.
Mr Viroj said the more bidders, the healthier the environment in competitive auctions.
Earlier, SET-listed Jasmine International Plc announced it will enter the 4G spectrum auctions through a joint venture with a foreign telecom firm using an investment budget of up to 35 billion baht.
Thoresen Thai Agencies, a strategic investment holding company, is the latest company to indicate it wants to participate in the 4G spectrum auctions.
Mr Viroj said Real Move and Real Future, subsidiaries of True Corporation, are CAT's largest MVNO operators providing 3G service on 15 MHz bandwidth of the 850-MHz spectrum under wholesale-resale contracts.
Both companies can use up to 80% of CAT's network as stated in the contracts. The remaining 20% of its network capacity could be rented to other companies to provide 3G service on its behalf.
CAT also appointed 365 Communication and Tesco Lotus to become MVNOs.
CAT is in talks with several prospective companies interested in becoming MVNOs, said Mr Viroj.