Tesco Lotus in 3G talks with CAT
Retail giant Tesco Lotus is jumping into the highly competitive cellular market under a partnership with CAT Telecom Plc.
The move by one of the largest hypermarket chains in Thailand is aimed at helping its expected high growth from online shopping services as smartphone users drive the market.
CAT expects to approve Tesco Lotus this month as the third company with which it will provide third-generation (3G) wireless broadband services under the mobile virtual network operator (MVNO) model, said Viroj Tochareonvanith, the state agency's acting president.
True Corporation now provides 3G services on the 850-megahertz frequency under an agreement with CAT, while 365 Communication Co was recently chosen to help the state enterprise to sell 50,000 mobile numbers on the spectrum under a 12-year agreement.
An MVNO is a company that provides mobile services but owns no network.
Mr Viroj said CAT started negotiating on the partnership with Tesco Lotus early this year.
Under the initial agreement, Tesco proposes to sell up to 5 million 3G mobile numbers for the state enterprise.
"Tesco should start providing 3G service in early 2015 after we have completed the installation of our IT systems supporting Tesco’s online shopping applications," he said.
Mr Viroj said CAT is also in talks with Central Department Store and an undisclosed firm about MVNO partnerships to provide 3G services on behalf of CAT.
Tesco Lotus last week announced it will launch a mobile application for e-commerce by the end of this year with the aim of becoming a leading online shopping marketplace in Thailand.
Chief marketing officer Wanna Swuddigul earlier said Tesco Lotus had more than 20,000 products available online at www.tescolotus.com.
The three best-selling lines are children's products, beverages and household products.
Tesco Lotus has 10 stores in Bangkok and three in the provinces functioning as distribution centres for delivering products to online customers.
Mrs Wanna said the average value of an online purchase was three times that of an offline purchase at a store.
Tesco Lotus recently launched a pay-on-delivery service for both credit cards and cash, but most customers still pay with their credit cards via the online channel.
"Even though online shopping is very small, it is growing strongly," said Mrs Wanna.