Price war looms among overseas-call rivals as newcomers join market

The Nation (31 October 2007)

Competition between dominant overseas-call provider CAT Telecom and private players will heat up following the allocation of prefixes to new entrants by the industry's licensing body. It remains to be seen if a price war will erupt. Most companies have said they will focus on service quality rather than cost. A CAT source said yesterday it was watching how new entrants encouraged cellular subscribers of their parent companies to make international calls using their direct dialling prefixes, rather than CAT codes. "We have a promotional package which will be submitted for approval soon," the source said. The state agency said it attained its 12-month overseas-call revenue target of Bt9 billion in September. A True International Communications source said the company would kick off its service this year, but declined to say if it would use price to attract customers. Recently the National Telecommunications Commission allocated the 006 international direct dialling prefix to True and 004 to Total Access Communication's DTAC Network. The two companies clinched overseas-call licences early this year, but had to wait until now to get their prefix codes. There are now five overseas-call providers, including TOT and CAT. In addition to True and DTAC, AIN Global Comm has a licence. TT&T is seeking one.
DTAC deputy managing director Nitipong Boon-long said international-call liberalisation gave consumers more choice. He said price competition was inevitable. Weerachai Patcharopartwong, general manager of AIN, formerly known as AIS International Network, said the company did not want a price war. "We learned a lesson from past cut-throat competition in the domestic cellular industry which financially affected all operators," he said. AIN was allocated the 005 prefix in July. This week the company said it would spend Bt3 million encouraging people to use its service by offering restaurant and shopping discounts for calls. About a million AIS subscribers have called overseas using AIN, it said, and predicted that number would reach between four and five million by the end of the year. All new entrants are at present offering overseas calls to their parent-company subscribers until they can reach interconnection agreements. Interconnection regulations require operators to share voice and data revenue between networks involved in the calls.

Strong growth for mutual fund industry

Bangkok Post (31 October 2007)

The mutual fund industry is expected to grow by 20-30% this year, driven mainly by fixed-income funds, according to Vorawan Tarapoom, managing director of BBL Asset Management. Falling interest rates would cause investors to shift to fixed-income assets. Asset management firms are also expected to launch more long-term equity funds and retirement mutual funds by the end of 2007, she said. The fund industry has 1.5 trillion baht in total assets, up 24% from 2006. Interesting developments include Thanachart Fund Management's new foreign investment fund (FIF), which invests in units of Luxembourg-based MLIIF New Energy Fund, with subscriptions running from today until Nov 8. As well, ING Mutual Funds will offer a six-month auto-redemption fixed-income fund from Nov 2-9 with a size of two billion. Jumpol Saimala, executive vice president at ING Mutual Fund, said it had a policy of investing in both local and overseas government and state enterprise issues, but foreign investment would be capped at 75% of total assets. ING will also launch another new FIF in November. It will be a ''fund of funds'', investing in structure notes and emerging market funds, he said.

Baht hits 34 to dollar as greenback falls

Bangkok Post (31 October 2007)

Uncertainty persists before Fed meeting. The baht and other currencies in the region gained against the falling dollar yesterday as uncertainty over the US Federal Reserve's interest rate policy caused the greenback to weaken. The baht yesterday touched 34.00 to a dollar, up from 34.04 on Monday, as the dollar slipped against the yen and hit a new low against the euro. Investors largely expected the Fed to cut its policy rate by 25 basis points to 4.50% today to stem the sub-prime mortgage crisis. However, new speculation has arisen that the Fed might maintain its interest rate. The shift from US-denominated assets ahead of the Fed meeting pushed up regional markets and currencies on Monday. Local currency dealers expected the baht to continue to appreciate and stand at 33.30/40 to a dollar at the end of the year, close to the high of 33.20 witnessed in June. Thiti Tantikulanan, head of capital markets at Kasikornbank, said the baht was expected to continue appreciating along with regional currencies because of the depreciation in the US dollar. ''The baht could possibly [break above 34] to a dollar this week and may stand at 33.30/40 baht at the end of this year. That is close to the 33.20 to a dollar we saw in June,'' he said. Mr Thiti said exporters actively sold dollars to buy hedging contracts, while importers had maintained their positions. The dollar weakness caused currencies to strengthen across the region. The Philippines peso rose 2.5%, the Singapore dollar 2.3%, the Malaysian ringgit 1.8%, the Indian rupee 1.1%, the Korean won 1%, the Taiwan dollar 0.8% and the baht 0.78%. ''We suspect the central bank has intervened in the currency market actively during the past two months,'' Mr Thiti said. The increase in international reserves _ including net forward positions _ by about $1.5 billion per week, compared to less than $1 billion earlier, reflected the central bank's intervention, he added. In addition, yesterday the falling dollar pushed up the oil price to a new high. Central bank officials maintained that the baht's appreciation was in line with regional currencies. Tarisa Watanagase, the governor of the Bank of Thailand, said the central bank has been monitoring oil prices, which have jumped due to external factors, mainly Middle East tension. She said the rise in oil prices should not affect the central bank's core inflation target of 0-3.5%, which excludes energy and food prices.''We have tried to contain inflation within this range, rather than fluctuating along the oil prices. However, the indirect effects that feed to transportation costs is beyond our control,'' Dr Tarisa said. Amara Sriphayak, a central bank senior director, said the oil price remained within the $75 per barrel Dubai crude average that forecasters have been using. In the worst case, she said, Dubai crude could average $80 per barrel in the fourth quarter.

Nanotechnology used for fingerprint checks

Verifying a suspect's fingerprints in criminal cases will soon be easier.

Even though the fingerprints may have dissolved or faded, with nanotechnology, forensic officials can still get a print to make further criminal traces. To enhance the fingerprint verification process, a research team at the Asian Institute of Technology (AIT) has developed a method to use nanotechnology to get a fingerprint, even if the print has faded. The project is part of nanotechnology development projects supported by the Nanotechnology Centre (Nanotec) under the National Science and Technology Development Agency. AIT is also one of Nanotec's eight centres of excellence for nanotechnology development. Nanotec's director Wiwut Tanthapanichakoon said the project was to adopt nanotechnology to develop a new method to enhance the forensic fingerprint process. It uses nano-sized bioadhesive chitosan combined with gold nanoparticles to develop a new substance that could capture a fingerprint. Fingerprints are key evidence in tracing criminals, but many times forensic officials find it very difficult to get a print that has faded due to water or other problems. To overcome this, the development focuses on the lipid residue or fatty acid which is normally left in fingerprint marks, even if it has been submerged or hit by rain. Using the new substance developed with nanotechnology will assist officials to see and get the remaining print from the scene. In a fingerprint, around 99 per cent is sweat while 0.8 per cent is salt. Only 0.2 per cent is fatty acid. Wiwut said both sweat and salt were easily destroyed by the environment, but not the fatty acid. The research team therefore tried to find suitable substances that could interact with the fatty acid to make the lipid residue appear in the form of a fingerprint. "Since the lipid residue is left in very small quantities it's necessary to use nanotechnology to make the size of the substances very small so they can scatter in the small gaps of print residue," he said. Experiments found that the new substance could make faded fingerprint marks appear. AIT and Nanotec are working on registration of a patent for the new method. The new substance can now be produced at laboratory scale. However, Wiwut said the centre planned to work with the private sector to license the technology for mass production. The development, Wiwut added, could also be improved to check for addictive substances in the fingerprint mark. "If we make a more in-depth analysis of the lipid residue we can find addictive substances which come with the fatty acid. "We plan to find suitable substances to combine with chitosan and gold nanoparticles to detect addictive drugs from fingerprint marks," he said. Wiwut believed the next development would assist police to not only get fingerprints of suspects in criminal cases but also tell the addictive status of the fingerprint's owner, which could be important information when tracing criminals.

Pongpen Sutharoj
The Nation

BOT fears double blow from oil rise

The Nation (31 Oct 2007)

Surging energy costs felt across the board, set to hit materials and wages.

Thailand is bracing for inflationary pressure next year following hikes in global oil prices, which are pushing up the cost of products and wages, the Bank of Thailand warned yesterday. Government Housing Bank president Khan Prachuabmoh said he foresaw a 5- to 10-per-cent hike in housing prices next year, following the jump in oil prices. Khan said yesterday higher oil prices would push up the cost of construction materials. Rising oil prices would also make it harder for developers in the suburban market to sell their units, as homebuyers were concerned about the commute and travelling expenses. Budget airline Thai AirAsia said it would raise its fuel surcharge by Bt100 on average for all routes within a month. Chief executive Tassapon Bijleveld said the surcharge was now set at Bt400 for domestic routes and from Bt600 to Bt750 for international routes. He expected other airlines to follow suit. Bank of Thailand governor Tarisa Watanagase said yesterday the central bank was keeping an eye on global oil prices, as well as the possibility of a later impact on inflation in Thailand. However, the BOT did not plan to change its core inflation target, currently set at 0-3.5 per cent. Central bank senior director Amara Sriphayak said the BOT feared a secondary inflationary blow would hit the Kingdom next year. The first-round is expected to occur after product manufacturers raise their prices due to an increase in oil-related production costs. After domestic demand improves and pushes up the economic-growth rate, manufacturers tend to hike wages, which would create a second impact. "We experienced this during the past economic recovery. When the economy picked up, interest rates rise and then the wages follow," Amara said. The warning came amid the latest hike in retail fuel prices by 40 satang per litre, which comes into effect today. Petrol and diesel hit new record highs, at Bt31.19 a litre for octane-95 petrol and Bt28.14 for diesel. Dubai crude oil rose yesterday to US$83.26 (Bt2,822) a barrel. Refined diesel stood at $100.97 a barrel, with refined petrol at $95.44. On Monday, oil futures for December delivery hit another record of $93.53 a barrel, but that weakened to $92.42 by midday in Europe yesterday. Thirapot Vajrabhaya, chairman of Shell Companies of Thailand, said the latest retail-price increase was due to marketing-fee losses of Bt0.50 per litre for diesel and Bt0.25 for petrol. He said that to cope with hikes over the past two weeks, retail fuel prices should have been raised Bt3-4 a litre. But they have been raised twice, by a total of only 80 satang. Despite the increases, the BOT's Amara said oil prices were still within the bank's estimates for the year. It had estimated average oil prices in Dubai would be $75 a barrel in its baseline-case scenario and $80 in the worst-case scenario. Next year, the central bank expects the economy to expand by 4.5-6 per cent with a significant increase in domestic demand, following a recovery in the last quarter of this year. Rising domestic demand would boost inflationary pressure, Amara said. However, the BOT still believes inflation will grow within anticipated parameters. It estimates the core-inflation rate for next year will be 1-2 per cent and headline inflation 1.5-2.8 per cent. This year, the gross domestic product is expected to expand 4.3-4.8 per cent, while core inflation is expected to be 0.8-1.3 per cent and headline inflation 1.8-2.3 per cent. However, if average annualised Dubai crude-oil prices rise to $80 per barrel, GDP this year could fall to 4.4 per cent.

AIS wary of booking interconnection fees

Bangkok Post (31 Oct 2007)

Advanced Info Service has voiced concern over the interconnection charge (IC) dispute between state-run TOT Plc and both True Move and DTAC, as the two mobile operators have billed AIS for more than one billion baht in IC charges. AIS president Wichien Mektrakarn said that since AIS signed interconnection agreements with True Move and DTAC in February this year, the two operators have billed more than one billion baht in IC charges to the company. However, he said, AIS could not bill those companies for IC due to fears that it may face a lawsuit from TOT.
DTAC and True Move have been refusing to pay access charges to the state telecom enterprises. They argue that the IC system approved by the National Telecommunications Commission should take precedence. DTAC and True Move hold concessions from CAT Telecom, which is supposed to collect the access charges for use of the TOT network and pass them on to TOT. AIS holds a concession from TOT and does not want to challenge its access-charge agreement. Mr Wichien said he was upset that TOT and CAT were not taking serious legal action to demand compensation. ''It is so strange that almost a year has elapsed and the two state telecom enterprises are not hastening to find a settlement for the interest of the state enterprises,'' he said. What's worse, he added, was the fact that True Move was promoting cross-network calls at just one baht a minute, lower than the IC costs that operators had agreed on. Now it was even less certain that operators would actually pay bills in line with the IC agreements they'd signed, he said. He said AIS wanted to clear the IC billing with the two operators but ''we put a lot of weight on the possibility that these IC agreements may be scrapped or adjusted'' by the next government. Both True Move and DTAC are now booking access charges as IC charges on their balance sheets. The two companies also want AIS to collect IC charges from them, Mr Wichien said. This would pressure TOT because it stands to lose up to 20 billion baht a year if access charges are scrapped. TOT deputy president Kittipong Taemeytapradit said TOT had formally asked DTAC to pay access charges. But DTAC has ignored the request, claiming it was not a direct contracted partner with TOT. He said that TOT has officially notified CAT Telecom that it would stick to the agreement with CAT if DTAC and True Move refused to make access charge payments. Enforcing the agreement would prompt TOT to demand access charges directly from CAT.

IEC and DTAC agree to end airtime contract

The Nation (30 October 2007)

International Engineering (IEC) and Total Access Communication (DTAC) have agreed to terminate their airtime-provider agreement. The move is expected to help the cellular operator cut about Bt100 million a year in expenses. In a filing yesterday with the Stock Exchange of Thailand, IEC said both companies had mutually agreed to terminate the contract DTAC awarded to IEC in April 1998 and subsequent supplement agreements before the April 2015 contract expiry. IEC was paid Bt290 million in cash in return. IEC wants to divest the business, which is expected to generate undervalued return in future. The service is only for DTAC's post-paid subscribers, while consumers today tend to prefer prepaid phone service. DTAC chief commercial officer Thana Thienachariya said IEC had provided airtime service to 70,000-80,000 post-paid DTAC subscribers. The contract termination will enable the company to take better care of its customers and cut the revenue share with IEC of about 13 per cent on each customer's monthly bill, he added. One telecom analyst said the deal cancellation saved about Bt100 million of service fees a year for DTAC. DTAC currently has 14.9 million subscribers. Third-quarter revenue increased 33 per cent year on year to Bt16.4 billion, due to customer growth and February's introduction of an interconnection regime by the National Telecommunications Commission. The interconnection regulations require all telecom operators that signed bilateral interconnection deals to share voice and data revenue proportionately between the networks involved in the calls. The same telecom analyst said DTAC's third-quarter interconnection costs dropped to Bt719 million, from Bt1.457 billion in the second quarter, due to DTAC's promotional packages that encouraged calls within the network. The analyst believes DTAC's fourth-quarter performance will show better results, because the net interconnection-charge expense is expected to decline further, while a price war in the post-paid segment has recently subsided.

Mobile Operators Plan $50 Billion Investment to Blanket Africa With Telecoms and Internet Access

GSM Association Press Release 2007

At the Connect Africa summit, the GSM Association announced that the mobile industry plans to invest more than $50 billion* in sub-Saharan Africa over the next five years to provide more than 90% of the population with mobile coverage. The investment will be used to extend the reach of GSM mobile networks, enhanced with GPRS, EDGE and HSPA technologies, to provide a rich suite of mobile multimedia services, including Internet access. Since sub-Saharan governments began liberalising their telecommunication sectors at the turn of the millennium, the GSMA estimates that the mobile industry has invested $35 billion, providing more than 500 million people (67% of the population) in sub-Saharan Africa with mobile coverage. “This surge in investment by the mobile industry has changed the lives of millions of Africans, catalysing economic development and strengthening social ties,” said Rob Conway, CEO of the GSMA. MTN, Orange, Vodacom and Zain subsidiary Celtel are among the mobile operators planning to invest heavily in the expansion and enhancement of their networks. “We have the passion and dedication to provide Africa with a world class infrastructure,” said MTN Group President and CEO Phuthuma Nhleko. “We are proud to be a leading investor in Africa, bringing world-class services to our customers on the continent through our Celtel subsidiary,” added Dr. Saad Al Barrak, CEO of the Zain Group, while Alan Knott-Craig, CEO of Vodacom Group, said: “We are proud of our investment in Africa, and we will continue to focus on our customers and the development of products and services that benefit them.” There are more than 150 million mobile subscribers in sub-Saharan Africa today. However, a further 350 million people have mobile coverage and are not yet directly connected. As well as extending coverage, the mobile industry is focused on using its economies of scale to connect these people. As the number of users grows, so too will economic prosperity. The GSMA estimates that an increase of 10 percentage points in mobile penetration can increase the annual growth rate of GDP by up to 1.2 percentage points.[1] In order to create the conditions that will maximise the benefit of this new investment, the GSMA calls on governments across sub-Saharan Africa to follow the President of Rwanda, His Excellency Paul Kagame’s advice: “The barriers that governments put in the path of entrepreneurs need to be urgently removed. Individuals and companies create wealth, not governments. This is not to say that the state should become invisible. But governments should see their roles as enablers of business, and not gatekeepers that control and hamper it." In particular, African governments need to ensure that sufficient spectrum is available to enable the hundreds of millions of Africans, who live beyond the reach of today’s fixed networks, to gain access to cost-effective broadband services. The GSMA believes the World Radiocommunication Conference, currently meeting in Geneva, needs to reserve the 750MHz to 862MHz spectrum band for mobile broadband services in Europe, Middle East and Africa. In this spectrum band, radio waves can travel significant distances and provide better in-building signals, helping operators to achieve more extensive and cost-effective mobile broadband coverage, particularly in rural areas. “The world’s governments have an opportunity to narrow the digital divide between those who enjoy high-speed access to multimedia services today and the many people who can’t yet be economically served by broadband networks,” said Tom Phillips, Chief Government & Regulatory Affairs Officer of the GSMA. “It is important that the world’s governments set aside this spectrum in a harmonised way, enabling handset makers to achieve economies of scale, thereby reducing the cost of access devices for consumers.” African Governments also need to address other barriers to the uptake of mobile communications, such as high consumer taxes. Mobile specific taxes are levied in Ghana, Kenya, Tanzania, Uganda and Zambia; if these were lowered or removed, government tax receipts would actually increase as more people will connect and use mobile services, boosting Value Added Tax receipts and stimulating wider economic activity [2]. High license fees and other regulatory bottlenecks, such as international gateway monopolies, constrain the competitiveness of African business.

Many companies find loopholes in tax code

We can't close every loophole, says Mr Satit.
Bangkok Post

Too many companies, while not outright violating the tax code, take advantage of loopholes at the expense of society, said Satit Rungkasiri, a deputy director-general of the Revenue Department.

Reforms are needed to close the existing loopholes in the tax code, he said. "But the reality is that even amending the law cannot close every loophole for those intent on evading the law. Ultimately it depends on the ethics and sense of responsibility of each company," Mr Satit said. He pointed to the use of entertainment expenses as a tax deduction as one area rife with abuse.

The tax law allows companies to claim as deductions entertainment expenses of up to 0.3% of revenues. "But in practice, some companies claim personal expenses as entertainment expenses for clients. Unfortunately, it's something that is quite difficult for the Revenue Department to prove," Mr Satit said. Another example is the deduction allowed for company cars, now set at up to one million baht per car. "Some companies go and buy a Porsche or Ferrari. While they can't deduct the full price of the car, they do claim a deduction, even though it's extremely unlikely that the use of the car is genuinely for the company's operations," Mr Satit said. Other companies siphon or launder money for other illicit purposes through transactions such as the purchase of art pieces at artificially inflated prices. During the 1997 economic crisis, government officials discovered numerous cases of such transactions made to reduce tax liability or to facilitate bribes or payments to third parties. In some cases, the artwork itself was an outright forgery of a prominent artist, further proving that the transaction was simply a conduit for fraud. "At the end of the day, it depends on the heart of the person. We simply can't close all of the loopholes available," Mr Satit said. The Revenue Department recently launched its RD Camp programme to help educate children about their responsibilities as citizens to pay taxes and how evasion simply takes advantage of greater society.

Shortage of new numbers slows growth

Bangkok Post (30 Oct 2007)

AIS, DTAC revise down revenue targets SRISAMORN PHOOSUPHANUSORN. The local mobile-phone market faced slowing subscriber growth in the third quarter in the face of a number shortage and shrinking consumer spending due to the sluggish economy. The result has prompted the two SET-listed mobile operators, Advanced Info Service (AIS) and DTAC, to revise down their revenue growth and subscriber sales targets. Market leader AIS had 800,000 net new subscribers and second-ranked DTAC 400,000 in the three months to Sept 30. In comparison, AIS gained 1.57 million customers in the first quarter and 1.5 million in the second quarter of this year. DTAC added 1.46 million and 1.15 million customers, respectively. Net new subscribers of the three main operators including third-ranked True Move are expected to total nine million for the full year. Thana Thienachariya, chief commercial officer of DTAC, said the drop in the third quarter was largely due to the shortage of numbers allocated by the National Telecommunications Commission (NTC). In July in particular, he said, DTAC gained no net new customers because of the delay in the number allocation. He admitted that DTAC was likely to revise down its 15% revenue growth target this year, but he declined to give a figure. The new customer target, he added, would be 3.2 million, down from four million projected earlier this year. Total Access Communication (DTAC) reported that its third-quarter profit rose 14% on a 33% increase in revenue from interconnection charges. Net profit increased to 1.4 billion baht on revenue of 16.4 billion. But if the interconnection revenue is deducted, revenue increased just 4% from the year earlier. DTAC had 14.9 million customers as of Sept 30. AIS president Wichian Mektrakarn said that even though his company would maintain its revenue target of 90 billion baht this year, it was likely to miss its profit target due to the price war in the second quarter and the overall economic slowdown. However, both AIS and DTAC believe that mobile subscriber penetration would reach 80% by the end of this year, with a total of 52 million subscribers. Net new subscribers are expected at 12 million this year.

Economic forecast set to be revised

The nation ( 30 Oct 2007)

Thailand's economic forecast will be revised on November 23, when the recent oil price hikes as well as global economic conditions will be taken into account, a Finance Ministry official said.

Ekniti Nitithanprapas, director of the Fiscal Policy Office's Macroeconomic Analysis Group, said that Thailand's gross domestic product will be slashed 0.2 percentage point for every US$1 increase in the Dubai crude oil price. Meanwhile, the $1 increase will also push up inflation by 0.3 percentage point, he said.

Still, he favours the idea of letting retail oil prices move along market mechanism, but the government may need to help relieve the burden of low-income earners and the most affected sectors.

The office's current economic growth forecast is 3.8 to 4.3 per cent. Oil prices yesterday rose above $93 a barrel after Petroleos Mexicanos said it was suspending about a fifth of its oil production due to a storm. Its plan to shut down as much as 600,000 barrels of daily crude production came amid political tensions in the Middle East, a weak US dollar and a tight supply outlook that has already pushed crude oil to record prices.

Light, sweet crude for December delivery rose as much as $1.34 to $93.20 a barrel, a new intra-day record, in early afternoon Asian electronic trading on the New York Mercantile Exchange. It later slipped back to $92.84 a barrel. That was still up 98 cents from Friday's record close of $91.86 a barrel. The previous trading high was $92.22 a barrel, set on Friday. Dubai crude oil also gained $2.41 to $82.85.

Thai oil retailers yesterday did not announce any plan to raise domestic prices. Despite the latest movement, Energy Minister Piyasvasti Amranand insisted that the Oil Fund would not reduce obligatory contributions from oil retailers to delay a domestic price hike. He insisted that the Oil Fund should be exploited only in emergencies such as wars. He also noted that delaying a hike today means higher collection tomorrow to cover the expenses as well as interest burden. For every litre of oil sold, the Oil Fund receives Bt1.50 per litre from diesel; Bt4 from octane-95 petrol; Bt3.70 from octane-91 petrol; 70 satang from gasohol 95, and 20 satang from gasohol 91. The ministry earlier said once all the Bt82-billion debt is cleared, the contributions would be split in three parts: one part will be used to finance rail construction, another would be used to cut retail oil prices, and the third part will be banked. While foreseeing that global oil prices will exceed $100 a barrel, he said that it would not stay there permanently. Meanwhile, the Organisation of Petroleum Exporting Countries in November could increase the output and that would ease market jitters. While saying that the strong baht has softened the impact to some extent, he also suggested that Thais use alternative fuels to reduce their higher burden. Product manufacturers are pressuring the Commerce Ministry for permission to raise their prices. The ministry last week approved a Bt3 per kg increase in the ex-farm pork price. Meanwhile, the Energy Ministry is set to reduce subsidies on cooking gas prices around mid-December. With rising pork and cooking gas prices, food shops are preparing to charge their customers Bt2 to Bt3 more per dish. "If possible, I won't raise the dish price but now I think I have no other choice," a Lop Buri food shop owner, nicknamed Noi, said. She said the cost was rising sharply and her small business would not survive if 'rice with toppings' at her shop were not sold at a higher price. Noi said she used to make between Bt500 and Bt700 profit per day. "But the rising cost has left me with only a few hundred baht of profit," she said.

Microsoft joins with hospital

The Nation October 30, 2007

Thailand has become Microsoft Corp's worldwide healthcare research centre following that company's purchase of software and assets to streamline administrative and medical record-keeping at Bangkok's Bumrungrad Hospital.

This is the third acquisition for Microsoft's healthcare group but its first outside of the United States. The company is looking to enter the hospital-software market.

The financial terms of the deal remain confidential, but the US-based giant said it bought software called Hospital 2000 and its intellectual-property rights from Luxembourg-based software company Global Care Solutions.

Global Care has worked with hospitals in this country for seven years. Its 71 Thailand staff will also move with the deal.

Bumrungrad, which owns 14 per cent of Global Care, saw its share price rise Bt1 yesterday to Bt45.50.

Microsoft (Thailand) managing director Patama Chantaruck said the company would establish a healthcare research centre in Bangkok and work with Microsoft centres in China and India. The Bangkok centre will work exclusively on healthcare software for worldwide sales.

"Global Care software is unique and developed to run on a Microsoft platform," Patama said.
Thailand will be a springboard to expand into healthcare markets in Asia, especially China, and around the world, the company said.

In Thailand, the company will seek to sell software to both public and private hospitals, Patama said.

Craig Mundie, Microsoft Corp's chief research and strategy officer, said his company would distribute Global Care products internationally, along with others developed by Microsoft.

The healthcare industry spends US$30 billion (Bt1 trillion) each year on hardware and software worldwide. It is becoming a flagship product area for Microsoft, he said.

Peter Neupert, vice president of Microsoft Corp's healthcare group, said Global Care's products would make a "great addition" to Microsoft's portfolio of health-enterprise products as the company looked to power developing and emerging hospital systems around the globe.

Global Care's Hospital 2000 is an electronic-record system. Its integrated document imaging and delivery allows instantaneous scanning, storage and retrieval of both electronically generated and handwritten material.

It serves both front- and back-office operations, including radiology, laboratories, pharmacies, discharges and transfers, registration administration and clinics and wards.

Global Care sold the software to seven hospitals in five Southeast Asian countries: Bumrungrad, Singapore General Hospital, KK Women's and Children's Hospital, Franco Vietnamese Hospital, Changi General Hospital, Assunta Hospital and Asian Hospital and Medical Centre.

Bumrungrad told The Wall Street Journal's Asian edition that the software helped it manage billing and medical records in several languages and cut waiting times to see doctors to an average of 17 minutes. The hospital treats more than 1.2 million patients a year from countries all over the world, it said.

CAT close to marketing link-up

The Nation (29 October 2007)

Stage agency's board approves plan to sign MoU with Hutchison-CAT

The board of CAT has approved in principle a plan for the state agency to ink a memorandum of understanding with Hutchison-CAT on the joint-service marketing of their separate cellular networks.

A CAT source said, however, that the state agency and its joint venture Hutchison-CAT would have to conclude key issues before they could forge the deal.

According to the MoU, CAT will ask BFKT to transfer the ownership of the Code Division Multiple Access (CDMA) 2000 1-x cellular network in 25 provinces to the agency.

After that, CAT will lease its own CDMA network in 51 provinces and BFKT's network on a wholesale basis to Hutchison-CAT to provide a retail cellular service nationwide.

Hong Kong's telecom giant Hutchison Telecom owns 75 per cent of Hutchison-CAT, while CAT holds the remainder. Hutchison-CAT currently leases the CDMA network from BFKT, which is wholly owned by Hutchison Telecom, to provide the service.

CAT plans to soft-launch its own CDMA network next month ahead of the official launch in January.

The source added that CAT planned to increase its stake in Hutchison-CAT to 49 per cent in order to make higher revenue from the joint-service marketing.

The key issues both parties aim to resolve before the MoU signing include their revenue share from network collaboration. They also have to discuss the price of Hutchison-CAT shares the state agency plans to buy in its share-increase plan.

"CAT and Hutchison-CAT are expected to sign the MoU in January," the source added.
The collaboration between the companies also needs the Cabinet's approval, given that the project value is expected to exceed Bt1 billion, the source said.

CAT has pinned high hopes on the CDMA cellular business in the wake of declining overseas-call revenue.

But it remains to be seen whether CAT can sign up a large number of CDMA customers from the joint-network collaboration, given looming market saturation. Last week Sigve Brekke, chief executive of the second-largest cellular operator Total Access Communication (DTAC), forecast that the number of mobile-phone subscribers in Thailand would reach 65 million next year, up from 52 million this year.

This means the countrywide penetration rate will reach 100 per cent next year, up from the current level of about 80 per cent.

Hutchison-CAT has around 800,000 subscribers after launching in 2003.

Teledirect targets Vietnam, I'nesia

The Nation (29 October 2007)

New division aims to help Thai banks boost fee income

Teledirect, a leading regional provider of telecommerce services, is set to expand into Indonesia and Vietnam within the next two years. The company currently has call-centre operations in four key Asian markets - Thailand, Malaysia, Hong Kong and Singapore - and recently set up a new division, Teledirect Consulting, to provide clients with strategic advice and support in the field of telecommerce and act as business partner.

"In the next two years, we expect to have something in Indonesia and Vietnam," said CEO Laurent Junique, adding this would involve both call-centre operations and consulting services.
Indonesia is a market with a large credit card base, though the revenue per card is quite low, and with very few third-party call centres like Teledirect, he said.

He said Teledirect wanted to be the pioneer of telecommerce services in Vietnam, as it was in Malaysia, Thailand and Singapore, adding that the company believed in the first-mover advantage.

Vietnam is a different market and less advanced than Indonesia, Junique said.

"Many clients who come to us are in the financial sector, both insurance and banking. In Thailand, for instance, about 95 per cent of Teledirect's revenues are from insurance and banking customers. Every client needs to increase revenue every year and it is the duty of Teledirect to help them," he said.

Junique said Teledirect would invest heavily in its first phase of development to expand its sales-acceleration business and take the leading position in this area in the next three years. The focus in the next phase of development will be on customer services, he said.

"Our customer-service business was launched in Singapore last year. Major clients include airlines, which outsource customer-service functions such as ticket booking and reservations to us, and luxury-goods manufacturers, which have appointed us to take care their customer-service function for the whole Asia-Pacific region," Junique said.

He said that while Malaysia has been promoted as Teledirect's operational headquarters for its call-centre business, Singapore is the leading test market for its customer-service initiative.
Jeffrey Manuel, business director of Teledirect Consulting, said the setting up of the new division was linked to the economic environment in Thailand.

He said the insurance penetration per capita in Japan was US$3,700 (Bt126,000) and $1,600 in Singapore, whereas in Thailand it is as low as $80.

"So there is a lot of opportunities for growth in this region, mainly in developing countries such as Thailand where the government is opening up and liberalising the financial sector, particularly banking and insurance. The move will go together with higher awareness of insurance among Thai people as well as improving local infrastructure," Manuel said.

He said interest rates in Thailand were going down, so banks' margins and profits were being squeezed. During economic uncertainty, people put more money in savings accounts and use less credit.

"The banks have an urgent need now to increase fee income, including from selling products like insurance, mutual funds and structured products to customers," said Manuel.
"We [Teledirect] want to come and work directly with business partners to transfer the knowledge and expertise we got in other markets to help them tap opportunities to accelerate their sales," he said.

While banks in Malaysia, which do not sell insurance actively, earn fees of between $2 and $3 per customer, some advanced banks can make up to $20 per customer in fees from insurance sales, Manuel said.

World Bank may add to menu of funding options

The Nation (27 October 2007)

The government now has more choices of loan sources to finance mega-investment projects, Finance Minister Chalongphob Sussangkarn said yesterday.

"The World Bank is considering lending local currency to middle-income countries, which will benefit Thailand greatly," Chalongphob told reporters after he returned from Washington, where he attended the annual meeting of the World Bank and International Monetary Fund.

For years, Thailand has not borrowed from the World Bank since it only lends in dollars. If the World Bank offers Thailand baht loans, it would help the country significantly, he said.

Borrowing in dollars would create pressure on the exchange rate. The World Bank has adopted a new policy of supporting the middle-income group, he said. Borrowing from the World Bank has advantages because the bank also offers technical support. In the past Thailand largely borrowed from the Japan Bank for International Cooperation (JBIC). The government is also waiting for loans from the JBIC to finance mass-transit projects in Bangkok.

Chalongphob said the government had more choices now that the Export-Import Bank of China also offered loans to governments. "These offers are a menu we can choose from to meet our needs," he said.

In another development, Chalongphob said he would submit the draft of the Currency Act to the Cabinet on Tuesday. This will be the third time after Chalongphob postponed pushing it through the National Legislative Assembly.

"Ministers will better understand the draft bill after considering it several times," he said.
He promised to cut the controversial clause that would indirectly allow the central bank to use its accumulated profit or special reserves to pay back the debts of the Financial Institutions Development Fund.

Baht warning for Democrats

The Nation (27 October 2007)

Finance Minister Chalongphob Sussangkarn yesterday warned the Democrat Party that its policy to scrap the central bank's 30-per-cent reserve requirement would shoot the value of the baht up without any measures available to curb capricious movements.

Democrat leader Abhisit Vejjajiva recently said that if his party formed the next government, he would lift the Bank of Thailand's capital controls to boost investor confidence.

Chalongphob said the global currency market was still fragile with high volatility of capital flows. He said it was the global trend for the US dollar to weaken and middle-income countries like Thailand and India to risk rapid capital inflows. "If the world market is normal, capital controls are not needed," he said.

For the past month, the central bank has intensively "monitored" the currency market and kept the baht from rising too rapidly, while regional countries have seen their currencies soar sharply, he said.

Inflation has been under control despite the recent steep surge in global oil prices, thanks to the central bank's focus on inflation pressures, he said.

The dollar would weaken further and draw capital flows into middle-income countries, building pressure against the exchange rate. A sharp appreciation of the baht would hurt export competitiveness, he added.

Korn Chatikavanij, deputy secretary-general of the Democrat Party, said capital controls might not be the answer to baht instability.

He attributed the recent rise of the baht to an imbalance in baht/greenback demand, as seen by the growing trade and current-account surpluses. Consumption has been slowing down while the export sector was ramping up. This has led to higher demand for the baht against lower demand for the dollar, leading to the baht's rise.

He said capital controls did not address the baht problem. The central bank has other tools that are more effective in steadying the baht, such as buying up greenbacks.

Meanwhile, the stock market jumped to a fresh 11-year high of 911.6 points before closing flat yesterday at 894.57, with foreign investors snapping up energy and banking shares. Turnover was Bt33.46 billion. Foreign investors made net purchases of Bt5.05 billion, while institutional and retail investors were net sellers by Bt888.83 million and Bt4.16 billion, respectively.

An analyst from Trinity Securities said the SET rallied mainly on foreign appetite for energy and banking blue chips. Energy stocks have been boosted by rising global oil prices, which set a new record of US$92.09 (Bt3,144) per barrel at WTI and $88.39 for Brent crude oil.

The Trinity analyst said local energy stocks were cheap with a price-earnings ratio of only 11 compared to 18-20 times at other markets in Asia. That makes Thai energy stocks attractive and pushes up the whole stock market. The current resistance level of the SET is 920, he said.

Tisco Securities sees the SET Index reaching 1,000 in January due to the "January Effect" as well as expectations of economic recovery after the new government is set up. The current market volatility presents an opportunity for investors to stock up on Thai companies. The securities house said the SET Index should reach 900-930 next month.

Assistance for foreign investors

The Nation (29 October 2007)

The Washington-based head of a business-diplomacy consulting firm talks to KI Woo about the company's new operations in Thailand and existing activities throughout Asia.

Foreign companies investing abroad face a multitude of challenges. Even if they are major players in their home countries, they often need local experts who know the lay of the land to guide them through many intricate, and often unseen, hurdles.

Margery Krauss, the CEO and founder of Apco Worldwide, a Washington-based global communications consulting company with offices in 28 countries, recently told The Nation her company specialises in helping multinational companies from the US and Europe compete successfully in foreign markets.

"I would like to characterise what we do as business diplomacy," she said.
Krauss, who attended her company's mid-October grand opening in Bangkok, said Apco helped companies strategically position themselves in new markets.

"We help them build, defend and consolidate their reputations through communications and other related shareholder activities," she said.

Krauss said that when companies entered new markets, Apco first helped them determine what type of face would optimise their presence.

"Our experienced people on the ground can assist with government relations, business relationships and help articulate how companies will be viewed by potential employees," she said.
Apco, which was started by Krauss in 1984 as an offshoot of top-tier legal firm Arnold and Porter, continues providing litigation-communications support to clients in the US and Europe. In addition, the company helps clients traverse the new challenges often posed by regulatory authorities in different parts of the world. "That is the 'defend' part of our business."

Krauss said Apco's seasoned experts, who come with a wide variety of experience in each market, help clients deepen relationships through communications and external relations. The company's local people are experienced in many business areas and have a clear understanding of the city, country and the people in each market.

"They help clients build and profit from their presence."

Apco works with many Fortune 500 companies, including Microsoft and UPS, and has expanded with them as they open new markets globally.

"We have an eclectic mix of services all geared to the corporate suite," she said.
Krauss said the company had expanded because in each market it offered an integrated set of skills that circled around an understanding of the local market.

"Our people know what it takes for a business to be successful in a particular market, and we want to be our clients' partner of choice when they enter new markets," she said.
In Thailand, Apco has asked retired senior banker James Stent to drive the company's formation.

"Jim has had more than three decades of financial-institution and business experience throughout Asia, and we believe that he and the team he has assembled will provide great services to our clients," she said.

Krauss said the company had expanded to different countries by finding experienced and well-respected people like Stent who really understood a market.

"We then build the kind and range of skills around that person or group of people."
The company has gone through several transitions under Krauss' tutelage.

"I started out as a one-person firm that handled a client's non-legal needs that were necessary for successful operations," she said.

Krauss gradually built the firm's operations in the US and did not expand abroad until 1991, when Arnold and Porter was asked by the Russian government to draw up its new joint-venture laws.

"Apco was in a prime position to help its clients expand into Russia by helping with many non-legal requirements that needed on-the-ground responses," she said.

Arnold and Porter sold its Apco stake in 1991 to Grey Advertising, a global company with operations in more than 200 cities worldwide. With Grey as a shareholder, Apco expanded into many European and Asian cities during the next decade, including Asian offices in Beijing, Guangzhou, Shanghai, Hong Kong, Hanoi, Ho Chi Minh City, Jakarta, New Delhi, Singapore and Bangkok.

"We followed our clients as they expanded," she said.

In 2004, Krauss brought in a private-equity firm that bought out Grey. "We are now an employee-owned company with 600 staff worldwide," she said.

Hutch marketing deal likely

Hutch marketing deal likely
Bangkok Post (27 October 2007)

CAT Telecom expects to conclude a marketing deal with Hutchison of Hong Kong for nationwide Hutch mobile phone service within the term of the current military-backed government. A CAT director said yesterday that the board would meet today in Pattaya to discuss the details of the service collaboration with Hutchison.

If the board agreed on the plan, a memorandum of understanding could be signed within two weeks.

At that point, CAT would draft a contract while it awaits a ruling from the Council of State, the government's legal advisory body, on whether the deal needs cabinet approval.

The 1992 public-private joint venture law calls for cabinet approval of ventures worth more than one billion baht in order to encourage transparency.

Under the marketing joint venture, Hutchison would transfer its CDMA 1x network owned by subsidiary BFKT in 25 central provinces to the state telecom enterprise. BFKT would also absorb all the accumulated debt of Hutchison CAT Wireless Multimedia, which is 74% owned by Hutchison and 26% by CAT.

In exchange, Hutch wants to be the sole marketer of CDMA services nationwide, including the network in the 51 provinces where CAT has invested on its own. That network was built by Huawei Technologies of China.

CAT's holding in Hutchison CAT Wireless Multimedia would then increase to 51% from 26% at no extra cost under the deal.

The director said that CAT and Hutchison were hopeful that the deal could be concluded within the term of the current government as they were not certain the next government would approve it.

Hutch now has 800,000 subscribers in a cellular market of close to 48 million.

Economy's Weak Signals Persist

Economy's Weak Signals Persist
The Wall Street Journal (27 October 2007)

Housing, Jobs Data Raise Further Slowdown Worries; Some Bright Spots Emerge
The latest readings on the U.S. economy show continuing signs of weakness: Sales of newly built homes over the summer were weaker than previously estimated, September manufacturing was subdued, business inventories are mounting and the job market is displaying worrying signs of erosion.

REAL TIME ECONOMICS

• Read the latest news and analysis on the economy at WSJ.com's Real Time Economics blog.
The data also offered some hopeful signs. New-home sales, albeit a volatile measure, logged a surprise 4.8% increase in September, and the inventory of unsold homes declined. Growth in business investment continues, though it has decelerated in recent months.

"We have all this weakness from housing but at the same point we have good business spending, good consumer spending, healthy exports. When you add it all up, you end up with an economy that's likely to grow, but grow at a smaller pace than in the past," said Drew Matus, an economist at Lehman Brothers.

The new information bolstered the view that the U.S. economy expanded at better than a 3% annual rate in the third quarter and largely upheld predictions that the fourth quarter will be weaker. "The data have been soft, but it's no softer than what's already in people's forecasts," said Haseeb Ahmed, an economist at J.P. Morgan Chase.

As concerns mount about the slowing pace of economic growth and the risks ahead -- from the nascent credit crunch to energy prices -- markets are increasingly anticipating that the Federal Reserve will cut short-term interest rates at its meeting next week.

The Commerce Department reported that new-home sales in June, July and August were revised down, offsetting the goods news about September. Still, the inventory of unsold homes shrank to 8.3 months' supply from nine months in August; the median sales price rose, but the average price slipped.

Skeptics aren't convinced that the bounce in new-home sales suggests the worst of the housing mess is over. "New-home sales numbers are notorious for being volatile and for being revised," said Patrick Newport, an economist at Global Insight, a research firm in Boston. As evidence of continued distress, economists pointed to the 10.2% decline in new-home construction last month, as well as the 8% drop in sales of existing homes, which account for more than 85% of all home sales, reported earlier this week.

And the new-home sales report doesn't reflect cancellations. If included, they would likely drag down the tally. D.R. Horton Inc., the largest U.S. home builder by sales, reported last week that almost half of its home orders were cancelled in July, August and September.

A separate Commerce Department report on manufacturing showed that business investment hasn't yet succumbed to weakness elsewhere in the economy. Orders for durable goods, which are intended to last three years or more, fell 1.7%, largely on a decline in defense-related orders. Excluding defense, orders rose 0.7%. Orders for nondefense capital goods excluding aircraft, an important gauge of capital spending, rose by 0.4%, and the previously reported August decline was revised to show a shallow 0.1% gain.

The Labor Department reported that claims for unemployment benefits fell by 8,000 to 331,000 last week; the four-week moving average rose to 324,750, the highest level since the beginning of September and a hint that the labor market is weakening.

Continued strength in the job market is essential to keeping consumer spending going. Earlier this week, women's clothing retailer Talbots Inc. cut its sales forecast for the fall season, saying the "continued uncertainty of the economic environment" was weighing on consumers. Luxury retailer Coach Inc. warned that holiday profit would miss targets because of weak traffic at its U.S. stores and Target Corp. lowered its October same-store sales forecast.

DSL Continues To Top World Broadband Count

from telecomweb (27 Oct 2007)

Continues to dominate the world broadband picture, with a 65.87-percent market share, according to research done by Point Topic for the DSL Forum, which says the percentage is virtually unchanged from a year ago.

Cable broadband comes in a fairly distant second at 21.89 percent, and most of that is represented by the dominance of cable in the United States and Canada, the only two countries in the world where cable broadband holds sway.

The DSL Forum figures broadband delivered via fiber at 10.8 percent worldwide, but those estimates are challenged by the rival FTTH (fiber to the home) Council, which thinks the DSL folks are behind the times in their count. Satellite, at 0.28 percent, and “other” at 1.16 percent represent the mélange of Ku-band and Ka-band satellite, broadband over powerline (BPL), wireless broadband of all ilk and perhaps even jungle drums.

Travelers leave cell phones behind

Reuters, NEW YORK, Oct 26 (Reuters) -

Travelers want to go green and stay clean in the next year -- and they don't want cell phones disturbing their peace, according to an annual survey of travel trends.

TripAdvisor, a travel Web site, surveyed more than 2,500 travelers globally, finding the top trends were concerns about germs, the growth of green tourism, and opposition to cell phone use on planes.

It also found emerging hotspots for vacations in 2008 were Jerba in Tunisia, Makandi Bay in Egypt and Phangnga in Thailand.

"The major trends we're observing are that travelers value cleanliness above all else and are becoming more environmentally conscious," Michele Perry, spokeswoman for TripAdvisor, said in a statement.

The survey found 80 percent of respondents were concerned about germs, bacteria and viruses when traveling.

Airplanes were deemed the most germy, according to 28 percent of those polled, with public transportation next, followed by restaurants, hotels, and airports.

In keeping with the germaphobia, 55 percent of travelers said they tend to wash and disinfect their hands more often while traveling with 27 percent of Americans -- up from 22 percent in 2005 -- taking disinfectant, cleaning supplies, shower shoes, pillows, towels or linens, when going on a trip.

Nearly half -- or 45 percent -- of travelers said their worst experience at a hotel was a dirty bathroom or dirty sheets but 17 percent said they encountered vermin.

Travelers are going greener, with 26 percent planning to be more environmentally conscious in their travel decisions in the coming year, with plans ranging from biking to hiking

They clearly don't want cell phones disturbing their peace, with 78 percent of travelers believing that mobile phones should not be allowed on flights.

The survey found that 53 percent of travelers said it takes less than a day to unwind on vacation while 35 percent take 1-2 days to relax.

Travelers will average about three vacations in the coming year with beaches getting hotter as 64 percent plan to vacation at a sandy spot this year, compared to 59 percent last year.

Using a system that looks at various criteria such as search activity and postings, TripAdvisor predicts the rising stars in travel.

It said the top three emerging world hotspots for travel are Jerba, Tunisia, Makandi Bay, Egypt and Phangnga, Thailand.

Rounding out the top 10 are Kovalam in India, Sabaudai in Italy, Asilah in Morocco, Ko Phangan in Thailand, La Plagne in France, Yangshuo in China, and Kotor, Montenegro.

Thai FedEx looks to offset US impact

Thai FedEx looks to offset US impact
Bangkok Post (26 October 2007)

Federal Express, the world's largest express transport company, has voiced concern that the US economic slowdown would affect its Thailand and Indochina operations in the year ahead. Fortunately, the impact could be lessened by higher local growth, and increased political stability, said David Carden, the company's Thailand and Indochina managing director. He added that manufacturers had already adapted to fluctuating foreign-exchange rates and rising energy costs. ''I can't define the exact growth projection in Thailand, but I can tell you that our revenue would expand in response to the growing export sector,'' said Mr Carden. FedEx's 2008 fiscal year started on June 1 and runs to May 31 next year. Mr Carden said FedEx International Priority Direct Distribution had made its debut in May to help local exporters serve the 25-country European Union. The company also launched FedEx International Priority Freight Expansion to increase express freight coverage from Thailand and Asia Pacific. The two new services could enable local exporters to reach new markets as alternatives to the stagnant US market, said Mr Carden. In fiscal 2008, FedEx aims to focus on improving its cargo handling facility at Suvarnabhumi Airport. It will also study opening new stations in other provinces. Currently, it has seven stations in busy sites such as Chiang Mai, Laem Chabang, Pattaya and Nakhon Ratchasima. FedEx also operates 13 world service centres and 210 vehicles, including 165 panel vans and 45 motorcycles in Thailand. Mr Carden said the top three products shipped using FedEx services in Thailand were hard-disk drives, textiles and garments, and automotive parts. He said the company was in the process of switching to a paperless customs system that would improve efficiency. FedEx has also announced plans to move its Asia pacific hub to Guangzhou in China from Subic Bay in the Philippines in December next year. Mr Carden said the change was made because Guangzhou Airport could be expanded.

Teledirect sets up consultancy

Teledirect sets up consultancy
The Nation (26 October 2007)

Teledirect Telecommerce announced yesterday the setting up of its new consulting arm, Teledirect Consulting (TDC), to serve the banking and insurance sectors in Thailand and Southeast Asia. Since its establishment in Singapore in 1995, Teledirect has opened offices throughout Southeast Asia, including Thailand in 2005. Targeting banks and insurance groups, TDC will sell an alternative distribution strategy for financial products. With execution, advisory, programme management and expertise, TDC will capitalise on opportunities in Thailand and Southeast Asia. Data from the Office of Insurance Commission indicate the Thai insurance sector in 2006 grew 12.6 per cent for non-life insurance and over 37 per cent in 2005 for life-insurance policies. "While the insurance industry in Thai-land is growing fast, less than 20 per cent of Thais have life insurance. This low penetration level, coupled with the government's current policy of liberalisation of the insurance industry, means tremendous business opportunities in the future. TDC has been launched to assist the insurance and banking sectors to take advantage of these opportunities before new players enter the market," said TDC business director Jeffrey Manuel. "Over the last 12 years Teledirect has acquired a unique experience and TDC has been set up to transfer technology, knowledge and skills so that the insurance sector can capitalise on our methods that have proven successful, not just in Thailand but also in Hong Kong, Malaysia and Singapore," added Teledirect CEO Laurent Junique.

NTC takes up dispute

NTC takes up dispute
The Nation (26 October 2007)

The National Telecommu-nication Commission's board has decided to look into the access-charge dispute between TOT and CAT Telecom and has asked the two sides to find a solution within 30 days.NTC secretary-general Suranan Wongvithayakam-jorn said after a meeting yesterday that the board had decided the agency would look into the problem. Earlier, the NTC had said that it would not get involved in the dispute, as it was only responsible for the interconnection charge. However, Suranan said the regulator had decided to look into the matter after it received complaints from CAT, which said it was suffering as a result of the ongoing dispute. Total Access Communication (DTAC) and True Move have not paid the access charge since last November and TOT asked CAT to pay on their behalf. The NTC asked TOT and CAT to find a solution within 30 days, or it would take measures to decide the issue. Meanwhile, the NTC required CAT and TOT to pay the fee for a Type-3 telecom licence. Last year, TOT paid a total of Bt1.055 billion and is now required to pay an additional Bt594 million, according to the commission. CAT paid Bt519 million last year and has to pay an additional Bt126 million. The licence fees are calculated from 3 per cent of the revenues. However, the amount required by the NTC is a reduced sum - only 2.2 per cent of their revenues - according to Suranan. The State Enterprise Policy Office earlier urged TOT and CAT Telecom to seek a solution jointly to their dispute regarding the access charge collected from private cellular operators. In a recent letter to TOT, the office said the dispute had significantly affected the operations, image and interests of both TOT and CAT. The possible impact on related parties and the industry as a whole must be considered when seeking a solution, it said. DTAC filed a complaint with the Finance Ministry, saying it was inappropriate for TOT to ask CAT to demand access-charge compensation from DTAC for TOT.

Rivals share stage, expound strategy

Rivals share stage, expound strategy
The Nation (26 October 2007)

Given their aggressive strategies to win customers, bosses of Advanced Info Service (AIS) and Total Access Communication (DTAC) were expected to launch a sword fight when they faced each other yesterday. Instead, at a special talk hosted by newspaper Prachachart Turakij where the telecom rivals shared the same stage for the first time in history, they shared amusing stories, spoke about their weak points and outlined their plans for the saturation age in the mobile-phone industry. Eventually, they admitted that despite cut-throat competition, they do not intend to kill one another. DTAC admitted that having fewer subscribers forced it to adopt an "underdog strategy". "In the past, we always lost to AIS. Then we kept following what AIS did and announced in newspapers, and we offered the same thing at a price 15 per cent lower," Thana Tienachariya, DTAC's chief commercial officer, said with a big laugh. DTAC now realises that strategy will not work as long as its network coverage is a weak point. That's why 100 executives joined a 10-kilometre run for 90 minutes to prove that it could accomplish any "impossible races" - including a network improvement to please customers. AIS has also been under pressure. Its organisation has been the leader since inception and there is inertia among employees. "Our employees are not as alert to new things as those at DTAC. The inertia could lead to disaster. We need to admit that we're moving so slowly and we need to revive the lost energy. This will take time and some jobs will be cut. Hopefully, DTAC will take care of these employees," AIS president Wichian Mektrakarn quipped. AIS attributes its success partially to having superstars as presenters and, according to chief commercial officer Sanchai Tiewprasertkul, the strategy has worked well in winning over clients across the country. Ketchayong Skowratananont, DTAC's prepaid business division head, admitted that superstars were also once the company's focus but it could never complete against AIS in this regard. Thus, laymen are in its advertising campaign. In a way, this helps differentiate the brand. Both parties agree competition will be fiercer when the mobile-phone market reaches saturation point next year. Operators will need to secure existing customers and woo new ones. While AIS has launched an excellence campaign to please its 25 million subscribers, DTAC's strategy will focus on keeping existing subscribers and acquiring new users. On Wednesday, DTAC announced a rebranding aimed at ensuring it will be the most admired brand next year. Sanchai of AIS was undeterred, saying rebranding was common for old brands. However, he quipped that not all brands need such strategy, like soap products Lux or Tabasco sauce. "AIS has no strategy to change or rebrand because we believe that we are in a strong position," Sanchai said. While fighting against each other, the rivals are also alert of what the third player - True Move - is doing. Both AIS and DTAC agree they are weak in the pre-teen segment, where True Move is active. They realise their brands may be too old for this sector but are trying to capture this market, for these kids are growing up and are their potential clients in the future. "Still, at this hour, the kids are wise to choose the cheapest services and they are not the source of income for telecom operators. Therefore, right now, anyone with a dominant share in this segment tends to lose," Thana laughed. Being number one also draws attention, Wichian admitted. AIS suffered hugely when Temasek Holdings took over its parent company Shin Corp and led many anti-Thaksin Shinawatra customers to drop their subscriptions. DTAC has also suffered from huge debts caused by the baht's devaluation. "Without the debts, DTAC may not have been this strong," Thana said. "We have suffered several crises, mostly when we thought that the market was stable or that we had secured a good place. Now we know that we can't have that kind of thinking. We have to realise that we must go forward, whether we or the market are stable. This leads us to rebranding to motivate employees." Both sides agree that it wouldn't be in anyone's interests if one dies because of aggressive competition or if they are merged. "We need competition. The market will expand if all players are growing," Thana said. Wichian was in agreement. "When we create a brand, it is for different segments. Now we are securing the top and bottom, but we leave a gap for our competitors. Without competition, it's not good."

DTAC launches new look but predicts a longer wait for 3G

DTAC launches new look but predicts a longer wait for 3G
Bangkok Post (25 October 2007)

Second-ranked mobile operator DTAC is initiating an emotion-based marketing campaign to stress its existing values, based on the assumption that third-generation (3G) mobile service will fail to take hold in the Thai market for a few years yet. The company yesterday launched a 190-million-baht ''brand re-feeling'' campaign to highlight customer satisfaction and attractive tariffs. It also introduced its new logo of a blue flower, used globally by its Norwegian parent, Telenor.
''We are differentiating our marketing strategy to cater to the fifth stage of local mobile-phone development, when the penetration rate of mobile phones would approach 100% in 2008 with 65 million subscribers,'' said CEO Sigve Brekke. In Bangkok alone, penetration would reach 150% next year, he said. Mr Brekke said the mobile subscriber penetration was expected to hit 80% by the end of this year, with a total of 52 million subscribers. Net new subscribers are expected to total between 10 million and 12 million this year. ''We expect to have more than four million new customers this year, bringing our total to 16 million subscribers,'' Mr Brekke said.
''We also project to have 40% of the expected 13 million new customers in 2008 to maintain our 32% market share.'' However, he said that the local mobile industry would be saturated by 2009. Competition is shifting to retaining existing customers and lowering the churn rate, the key problem for operators registering turnover of two million customers per month each. Mr Brekke said DTAC would indefinitely suspend its 3G investment plan, waiting until the National Telecommunications Commission issues 3G licences with a clear policy. But he said DTAC was prepared to spend on a 3G network as it has strong capital reserves plus 5.8 billion baht from its listing this year on the Stock Exchange of Thailand. The company also plans to spend around 15 billion baht installing 1,500 more base stations next year. Chief commercial officer Thana Thienachariya said competition in the mobile market would shift away from technology spending, marketing and promotions to customer retention. As part of its campaign, DTAC yesterday introduced a series of promotions. One allows postpaid customers to pay zero monthly service fees and charges them two baht a minute according to actual calling time. Customers receive their bills via SMS, instead of bill statements. DTAC also allows customers to cancel services and delay bill payments through call centres around-the-clock. Mr Thana also said that DTAC was likely to revise down its 15% revenue growth target this year due to the slow economy resulting in lower average revenue per user. DTAC shares closed yesterday on the Stock Exchange of Thailand at 40 baht, up 25 satang, in trade worth 288.9 million baht.

DTAC in rebranding initiative
The Nation (25 October 2007)

Total Access Communication (DTAC) will spend Bt190 million to refresh its brand and motivate staff to improve services at a time when the cellular industry is reaching the saturation point.
Sigve Brekke poses with DTAC’s new logo, part of its corporate rebranding initiative amid fierce competition in the cellular-service industry."We will see users carry more than one SIM card or mobile phone in the city. It will boost total subscribers [in Thailand] to 65 million next year, from 52 million this year," Sigve Brekke, CEO of DTAC, the second-largest cellular operator, said yesterday. That means the countrywide penetration rate will reach 100 per cent next year, ushering in the fifth stage of development of the local mobile-phone industry, he said. Currently the penetration rate is 80 per cent. In Bangkok, the penetration rate will reach 150 per cent.
Brekke said the first stage was from 1991-93, when analogue attracted only 440,000 subscribers. The second was the digital age from 1994-98, with 2.1 million subscribers, while the third was the prepaid age from 1999-2002, with 17.5 million subscribers. And the fourth stage has been marked by price wars since 2002 that increased subscribers to 52 million. He said that during fifth stage, which starts next year, DTAC would focus on customers, making them feel good about its services instead of technology or marketing promotions. "We are also ready to invest in 3G [third generation] or new advanced technology, but it still depends on the National Telecommunications Commission issuing the licence. DTAC has Bt5.8 billion cash in the pocket from the IPO, and we're ready to raise funds to invest in the new technology" he said. Yesterday, DTAC launched a campaign for its new logo. A Bt190-million budget will be spent on marketing and renovating its mobile-phone shops throughout the Kingdom. Chief commercial officer Thana Thienachariya said the new theme was "Feel Good". The new logo's name is Fan and has a sky-blue colour, which is the same logo used by Telenor, DTAC's major shareholder.
"We have to rebrand to refresh ourselves to compete in the industry by having our staff change, in order to provide better service during the saturation period of the mobile-phone industry. Last time, our rebranding was in 2001, from TAC to DTAC. It's time for a change," Thana said.
Yesterday, DTAC kicked off a post-paid campaign. The "Feel Free 20" package offers 20 minutes of free calls per day for Bt300 per month. "Feel Free 40" offers 40 minutes of free calls every day for Bt600 a month, and "Feel Free 60" allows 60 minutes free for Bt900 a month.
Additional calls are charged at Bt2 a minute.

DTAC rebranding amid fierce competition
The Nation (25 October 2007)

DTAC announced its first major brand refreshment in seven years to get ready for new competition after the mobile market was fully saturated. Under the campaign, the company launched a new logo featuring a blue fan on a white background with the word "dtac", on the right, in lower-case letters. It also introduced new postpaid packages along with new services with an aim to make customers "feel good". Chief Executive Officer Sigve Brekke forecasted that the market would be fully saturated by the end of next year. The penetration rate was likely to be as high as 150 per cent in big cities as mobile users tend to have more than one SIM card. With market saturation and mobile number portability likely to be implemented next year, the competition would significantly shift from price to customer focus. "As the market evolves, we need to adjust ourselves to survive in the new competition era. We have to change the way we work and the way we treat our customers. We have to change and we have to do it now," he said. The company expects to spend Bt190 million on the re-branding.

Reductions in online trading fees delayed

Bangkok Post (25 Oct 2007)

Internet trading fees will be maintained at 0.2% of transaction values until the end of 2009, the Stock Exchange of Thailand board announced yesterday.

Fees for online trades for cash balance and credit balance accounts would also be maintained at 0.15% until the end of 2009. Cash balance and credit balance accounts are used by only a small minority of online traders.

The decision delays previous plans to liberalise commission fees starting next year. Internet trading fees for normal accounts were scheduled to fall to 0.15% starting in January, and be set at 60% of normal commissions from 2010 and made fully negotiable in 2012.

Commissions for normal trades, now fixed at a minimum of 0.25%, are to decline from January 2010 and be made freely negotiable from 2012.

Suthichai Chitvanich, a SET executive vice-president, said the extension would help reduce risks for brokers and promote trading discipline among investors.

He noted that the number of online investors and the volume of online trade had risen rapidly over the past year, in part thanks to the lower commission fees compared with conventional trading.

The SET board also agreed to delay planned changes to compensation for marketing officers by another two years until the end of 2010.

Brokers can pay marketing executives up to 27.5% of their total commission revenues on a monthly basis. The system was due to change at the end of this year to a pay-for-performance structure that included withholding 25% of compensation to be paid on a six-month basis.

The SET also announced that foreign brokers designated as exclusive partners with local firms must pay trading commissions of at least 60% of minimum commission rates for trades.

The foreign broker must also charge a minimum commission of 0.25% to their clients, and also agree to transfer know-how, research and technology to the local partner. From 2010 to 2011, commissions over 20 million baht would be made negotiable between the foreign exclusive partner and the local brokerage.

The new policy changes on commission fees and marketing compensation must be approved by the Securities and Exchange Commission.

Meanwhile, the SET index closed yesterday at 866.03, up 5.94, in trade worth 17.93 billion baht. The index rose as high as 875.81 points in morning trade before easing on profit-taking. Energy stocks gained 0.82%, banks closed up 1.29% and property rose 0.92%.

Foreign investors were net sellers of 1.72 billion baht in stocks, with retail investors with a net buy position of 964.68 million and local institutions net buyers of 760.35 million.

Mongkol Puangtaetra, assistant research manager at Adkinson Securities, said the market moved largely with regional markets, which closed mostly lower on ongoing concerns about the sub-prime mortgage crisis in the US.

what is Bridge Mobile?

Bridge Mobile Alliance, the leading mobile alliance in Asia Pacific welcomes the joining of Thailand’s Advanced Info Service (“AIS”) as its newest operator member in 18 June 2007.

With the addition of AIS, the alliance now has 11 operator members with a combined subscriber base of more than 160 million across 11 territories, and it is the largest mobile alliance in Asia-Pacific.

Earlier in February 2007, SK Telecom had joined the alliance; now both AIS and SK Telecom are also investing in the joint venture company Bridge Mobile Pte Ltd (“Bridge Mobile”) as shareholders of the company. Bridge Mobile is the commercial vehicle in which the founding operators have jointly invested when the alliance was launched in November 2004; to establish a shared infrastructure and common service platforms to deliver regional mobile services across geographical borders, and to provide a better user experience for customers roaming on the alliance members’ networks.

Mr Vikrom Sriprataks, Chief Technology Officer, AIS, said, “We are pleased to join Bridge Mobile Alliance who has the widest coverage of top-tier operators in the region. We look forward to working with the member operators to provide more value added services and a seamless roaming experience for our customers. AIS is the market leader in Thailand and being part of the largest regional mobile alliance group will further enhance our position as the leading and preferred operator for our customers.”

Mr Shin Bae Kim, President and CEO, SK Telecom, said, “We see Bridge Mobile Alliance as a unique establishment for leading operators to cooperate with each other and provide benefits to the end users. SK Telecom is pleased to share our knowledge and best practices with the alliance partners and we hope to create more innovative services that will benefit our customers.”

Ms Mary Ong, Chief Executive Officer, Bridge Mobile, said, “This is indeed another significant milestone for us and we sincerely welcome SK Telecom and AIS to Bridge Mobile Alliance. We are privileged to be an alliance of the best-of-breeds in the mobile industry and we seek to leverage on the collective strengths of our partners to deliver clear benefits to our stakeholders and customers. The alliance was formed with clear objectives to create value and benefits for our member operators, end users and our technology partners. With a combined customer base of more than 160 million subscribers across 11 territories, we have the critical mass to continually develop new ideas and cooperation opportunities that will bring about synergies and commercial benefits. We look forward to working closely with all our partners to deliver these benefits.”

Exports on target in first 9 months

Exports on target in first 9 months
The Nation (23 October 2007)

Krirk-krai expects $9-bn surplus

The Kingdom's exports jumped 16.1 per cent to US$110.59 billion (Bt3.83 trillion) in the first three quarters of the year, ensuring that the country achieves its export growth target of 12.5 per cent to $145 billion for the entire year.

Exports are expected to grow through to the end of the year despite a slowdown in global economic growth and negative factors, Commerce Minister Krirk-krai Jirapaet said yesterday. In addition, the baht has become more stable.

"Moreover, robust export growth should ensure that the country will attain an estimated $9-billion trade surplus this year," Krirk-krai said.

The average monthly export value in the last quarter should be higher than $12 billion, he said.

Imports grew by only 7.4 per cent to $102 billion in the first nine months, taking the trade surplus to $8.45 billion.

However, the value of exports in September grew only 10.4 per cent year on year to $13.27 billion - lower than the 17.8-per-cent growth to $13.9 billion in August - due to a worldwide slowdown, particularly in major trading partners.

Exports to Japan dropped by 1.3 per cent to $1.46 billion for the first time last month, due to slowing domestic consumption as well as confusion over the implementation of the Japan-Thailand Economic Partnership Agreement (Jtepa).

Krirk-krai said the definite implementation of the Jtepa on November 1 would increase exports to Japan for the remainder of the year. Exports to Japan grew by 10.7 per cent in the first nine months.

Products that saw slower growth in exports to Japan last month include electronic circuits, rubber, radios, television sets and steel.

The Commerce Ministry expects the bilateral trade agreement to boost exports to Japan by 30 per cent to $22.4 billion next year.

Export to the United States dropped for the fifth consecutive month in September, down 6.6 per cent year on year at $1.67 billion, due to troubles in the US economy.

However, exports to new markets surged, including by 79.36 per cent to Eastern Europe, 45.6 per cent to India, 43.5 per cent to Hong Kong, 27.7 per cent to the Middle East and 25.3 per cent to China.

Exports by the agro-industrial sector dropped by 2.3 per cent last month due to the impact of the baht's appreciation earlier in the year, the end of the season for some agricultural products, and non-tariff barriers.

Products that dropped in both value and volume in September include rubber, sugar, and frozen and processed shrimp.

Most industrial exports increased by more than 15 per cent last month, including automobiles, electronic appliances, plastic pellets and plastic products, construction materials, cosmetics, medical products and printed goods.

The value of imports in September was up 7.4 per cent year on year at $11.31 billion, giving the country a trade surplus of $1.96 billion for the month.

Imports were up from last year in all sectors last month - by 10.9 per cent in capital goods, 9.9 per cent in raw materials and semi-manufactured materials, 28.8 per cent in consumer products and 26 per cent in automobile and parts.

However, fuel imports fell by 10.2 per cent in spite of rising oil prices. The country imported 22.4 million barrels of crude oil valued at $1.64 billion in September.

Apiradi Tantraporn, director-general of the Foreign Trade Department, said imports of fuel were expected to increase in both value and volume in the remaining months of the year because of high demand in the world market and skyrocketing oil prices.

Thailand is expected to import about 767,000 barrels of crude per day from October to December, compared with 745,000 barrels per day in September, she said.