True may show upside gain from CAT deals
True Corp is likely to see upside earnings surprise from a new revenue-sharing rate with CAT Telecom, over the 3G service, according to DBS Vickers Securities (Thailand).
Its subsidiary, TrueMove, is currently paying CAT Telecom 25 per cent of its service income as concession fee, and this will rise to 30 per cent after Oct 2011. But the network which was formerly operated by Hutchinson Telecom and taken over by True’s two subsidiaries, offers the revenue-sharing rate of 20 per cent.
“The new revenue-sharing rate under the reseller contract with CAT Telecom is unavailable currently, but there will be upside to True’s earnings if it is below 20 per cent,” DBS said.
