In the electronic bidding yesterday, the Chinese telecom-equipment supplier quoted the lowest price for the project. CAT had budgeted up to Bt13 billion for the deal. Rival groups led by Ericsson and Motorola quoted Bt7.898 billion and Bt9.788 billion respectively.

Huawei has been doing business in Thailand for years, with Advanced Info Service Plc (AIS), the telecom flagship of the Shin Corp business empire run by Prime Minister Thaksin Shinawatra's family, as its first customer.

"The winning price is much lower than my expectation , at an average cost of Bt3,000 per phone number," Thaksin said.

Such a low price was possible because Huawei has its own equipment production factories, Thaksin added.

Thaksin said he was not concerned about criticism that his government hurried through the CDMA bidding while it was in a caretaker role pending the election of the next parliament. He also denied that Huawei had won because it was on good terms with AIS, which he founded.

Under the contract, the winner has to commence installation of 1,600 CDMA cell sites in 51 provinces by April. At least half must be fully installed this year and the rest in 2006. If the installation is delayed, the contractor faces a fine of Bt70 million per day.

CAT will pay 25% of the total installation cost in the first year and another 25% in the second year. The remaining amount will be paid in the following two years.

The CDMA network in 51 provinces will be linked with the existing one in 25 provinces under the operation of CAT's mobile joint venture Hutchison-CAT. The extended network, which can serve total of 3.3 million subscribers, will enable the operator to offer its services nationwide.

Intelecon Research & Consultancy Ltd. 26/01/2005

Source: The Nation