The executive committee of state-owned Thai carrier CAT Telecom Public Co. Ltd. has approved plans to build a 6 billion Thai Baht ($177 million) fiber access broadband network, according to a report in The Nation.

CAT's move is the latest in a series of fiber access (FTTx) plans in Asia/Pacific that includes national broadband network developments in Australia, Malaysia, Singapore, and South Korea. (See Australia Unveils $31B FTTP Plan, Asian Broadband CEOs: Invest in Us!, Telekom Malaysia CEO Talks FTTx, IPTV, and Singapore Makes FTTH Strides .)

CAT's plans are small by comparison -- the other projects are valued at $30.7 billion, $3.2 billion, $4 billion, and $24.6 billion respectively -- but reflect the momentum growing behind fiber-based broadband projects by government-linked telcos in the region's major markets. (See China Set for DSL, FTTH Boom and BSNL Begins FTTH Rollout.)

CAT's proposed next-generation broadband network would initially target 300,000 subscribers in a country that has more than 18 million households, according to Economist Intelligence Unit estimates for 2009.

Services are expected to be launched in 2010 and will be offered at THB1,000 ($29.40), according to The Nation. This is a competitive proposition that compares favorably to alternative fixed broadband services from competitors TOT Public Co. Ltd. , which charges the same price for 1-Mbit/s DSL access, and True Corp. plc , which dominates the Bangkok broadband market. True has recently launched a promotion offering two months' free trial of a 12-Mbit/s service to customers currently using its 8-Mbit/s service, which costs THB1,119 per month ($32.91).

However, CAT faces a number of challenges before it can start building its new network. Firstly, it needs to gain approval from the National Economic and Social Development Board, followed by the Cabinet, according to a company source cited in the newspaper report.

Secondly, it needs to get the go-ahead from Thailand's respective electricity boards, as CAT intends to hang its fiber from electricity poles rather than dig trenches.

Graham Finnie, senior analyst at Heavy Reading, says there's a sound economic reason for this overhead approach. "It can cut the cost by at least half, if not more. In a country like Thailand, where the ARPU [average revenue per user] is going to be comparatively low, that's important."

There are few downsides to such deployments, although they can be more prone to weather damage, adds Finnie.

However, the report in The Nation suggests CAT's plans could be scuppered by objections from the Metropolitan Electricity and Provincial Electricity Authorities. Finnie is less cautious, saying there's little reason for utilities such as these to block fiber rollouts.

"Fiber optic cables are passive, and therefore don't interfere with electricity supplies. In fact many utilities around the world are rolling out their own fiber with electricity supplies," says the Heavy Reading man. However, he does concede that utilities could be concerned about giving access to their poles to a third party.

CAT is one of Thailand's two state-owned telcos, but since its creation in 2003 has failed to make a major impact on either the mobile or fixed consumer markets. The majority of its THB47.6 billion ($1.4 billion) annual revenues come from its long-distance services, and revenue-sharing agreements with other operators that lease equipment from CAT, such as True.

Ramping up its direct service revenues from fixed broadband is one of two priority growth areas identified by the company in its 2007 Annual Report, the latest that has been published. The other is building CAT's mobile business. Therefore, it's no surprise that The Nation also reports that CAT's board is calling for renewed discussions with Hutchison CAT Wireless Multimedia Ltd. , with a view to merging the two operator's CDMA networks.

At the end of the second quarter, CAT had 228,586 mobile subscribers and Hutchison CAT Wireless Multimedia had 1,052,195, according to Wireless Intelligence . It is a complicated relationship, as Hutchison CAT is a joint venture (JV) between the two companies, but the JV leases its network from BFTK, a wholly owned subsidiary of Hutchison Telecommunications International Ltd. (NYSE: HTX)

Both operators are growing but aren't making inroads into the market share of Thailand's top three mobile service providers, Advanced Info Service plc (AIS) , Total Access Communication plc , and TrueMove, which have 27,581,800, 18,945,227, and 15,004,000 subscribers respectively. A consolidated CDMA operator could provide a stronger proposition in the face of hostile economic conditions. (See Asia Minnows Face Cash Crunch .)

— Catherine Haslam, Asia Editor, Light Reading