CAT Telecom is embarking on a strategic diversification plan involving property development as it strives to turn its existing vacant land into monthly income.
The state telecom enterprise is considering developing a commercial building project at its Bang Rak district office as a first step towards diversification of land development.
CAT president Col Sanpachai Huvanandana said the state enterprise is on the verge of selecting a consulting company to craft a business plan for the commercial development.
"A concise summary of the business plan details is expected to be settled by year-end," Col Sanpachai said. "Construction work for the first project is expected by mid-2017."
In the initial business model, he said CAT plans to seek a partner to jointly invest and develop the project under a revenue-sharing contract.
Col Sanpachai said CAT's 30-storey office building with total floor space of 12,500 square metres is in a central business area. The back of the location abuts the Chao Phraya River, with total land of 12 rai.
The building has a waterside dock that can accommodate tour boats.
Col Sanpachai said there are three types of projects CAT could develop to generate a new revenue stream.
First, five floors in the Bang Rak building are unoccupied.
"We plan to put these vacant spaces up for rent," Col Sanpachai said.
Second, five rai of vacant land around the Bang Rak building could be used to develop commercial real estate projects. The building's parking lot has space for up to 900 cars.
Finally, the waterside areas could be developed as docks and piers to serve tourist boat service along the river, Col Sanpachai said. There would likely be water passengers from the 50-billion-baht Iconsiam shopping and residential project to be located opposite CAT Tower.
The first property development project at CAT Tower will not be a well-designed flagship project, but the company must quickly create new sustainable revenue streams to offset vanished concession revenue, he said.
CAT is operating under a business survival plan assigned by the State Enterprises Policy Commission or superboard.
The superboard ordered both CAT and TOT Plc to terminate unprofitable businesses and focus instead on six core areas: basic telecom infrastructure, telecom towers, wireless service, fixed broadband internet, international internet gateways and undersea cable.
TOT is also on the verge of developing a slew of commercial real estate projects on its massive land banks nationwide.
TOT president Monchai Noosong said the state telecom enterprise has developed 10 such projects already.
PTT Plc, the national oil and gas conglomerate, is in talks with TOT to possibly lease the state telecom enterprise's land to develop its budget hotels and petrol stations.