CAT Telecom has chosen 365 Communication Co to help the state telecom enterprise provide 3G wireless broadband services under the mobile virtual network operator (MVNO) model.
True Corp now provides 3G mobile services on the 850-megahertz frequency under a partnership agreement with CAT.
CAT president Kittisak Sriprasert said the 12-year agreement will allow 365 Communication to sell 50,000 mobile numbers on the 850-MHz frequency.
An MVNO is a company that provides services but does not have its own mobile network.
Mr Kittisak said that even though 365 Communication's 3G agreement with TOT Plc was terminated, CAT saw that having one more partner would help it to boost its 3G activities and sales.
TOT reasoned that 365 Communication is mired in financial troubles and struggling with cash flow and high debts. The company also failed to place a guarantee of 3 million baht required for the purchase of each airtime allotment.
Surin Ritteepamorn, chief executive of 365 Communication, acknowledged that an MVNO must not compete directly with mobile operators. Instead, it should position itself as a mobile distributor to provide services for a niche market.
An MVNO with attractive applications and content offerings could survive in the business when its subscriber base reaches 100,000, he said.
Mr Kittisak said CAT's financial health looks set to continue improving, thanks to last month's cabinet approval for its 3G network expansion plan worth 14.54 billion baht.
The approval will allow CAT to start earning revenue from the partnership with True after two years of receiving nothing.
"Mobile business will represent our core revenue stream," said Mr Kittisak.
CAT plans to spend 12.52 billion baht on installing a transmission system and the remaining budget on a mobile network.
In 2011, CAT signed a series of wholesale resale and network rental deals with True to provide 3G wireless broadband services on the 850-MHz spectrum.
"We expect to see a profit of 2.3 billion baht in the 2014 fiscal year," Mr Kittisak said.