Tags:CDMA | GSM

Hong Kong based Hutchison Telecom that it is to recognise a non-cash impairment charge of HK$3,854 million (US$494 million) in its 2007 audited consolidated financial statements in connection with the Group''s investments in its mobile telecommunications business in Thailand. The company blamed an ongoing price war in the Thai market as being the primary reason for the write-down.

The Group markets mobile telecommunications services of CAT Telecom in 25 provinces covering Bangkok and surrounding provinces and leases to CAT the CDMA network used for that service. The business commenced operations in 2003 providing high-speed multimedia wireless services and has a customer base of 884,000 as at 30 September 2007. In reviewing the prospects for the operations the Board of Directors of Hutchison Telecom formed the view that the carrying value of certain non-current assets is not expected to be recoverable from future operating cash flow of the current business.

The impairment charge has no bearing on the implementation of the Group''s non-binding Memorandum of Understanding ("MOU") with CAT regarding the business reorganisation.

Until recently, CAT had a monopoly on international telephony and CDMA mobile telephony. CAT partners with sister state-enterprise TOT to provide a GSM mobile service and with Hutchison to provide a CDMA mobile service. Under the deposed government of Thaksin Shinawatra, CAT Telecom was corporatized and plans were under way to privatize a portion of the state enterprise through an IPO in the Stock Exchange of Thailand. These plans were cancelled after the Thaksin-government was overthrown by a coup in 19 September 2006. Soon after the coup, the junta of General Surayud Chulanont announced plans to merge CAT Telecom with rival state telecom enterprise TOT (formerly the Telephone Organization of Thailand).



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