Telecom Thailand Today: 12/01/2007

Tuesday, December 25, 2007

Military not happy with PPP win

Bangkok Post (25 December 2007)

The result of the election has upset the military's top brass, including army chief Gen Anupong Paojinda, who are worried about the People Power party (PPP) taking revenge for the Sept 19 coup last year. The uneasy atmosphere in the barracks was revealed yesterday by military sources as the PPP, a reincarnation of the Thai Rak Thai party (TRT) toppled by the coup, moves closer to coming to power. Top officers are worried, particularly about their futures in the military reshuffle next year.

Gen Anupong suddenly became irritated when asked by reporters to comment on what would happen to the army under a PPP-led government.

''I'll not answer. I'll say nothing,'' the army chief said.

Gen Anupong, one of the key men in the coup, had earlier said he would not be worried if the PPP forms the next government and ruled out the possibility of another coup.

He made it clear when he assumed the top army job in September that the army would not interfere in politics, a stance which earned him the tag of ''good guy'' from PPP leader Samak Sundaravej.

Analysts expect Gen Anupong to lead the army until the military reshuffle in September next year and then be transferred to head the Supreme Command or to become permanent secretary for defence.

Outgoing deputy prime minister and former chairman of the Council for National Security (CNS) Gen Sonthi Boonyaratkalin could also be prevented from playing any active role in politics, a military source said.

Gen Sonthi reportedly rushed off to meet Privy Council president Prem Tinsulanonda late at night on election day. Gen Sonthi led the coup group which toppled prime minister Thaksin Shinawatra, who was alleged to be involved in massive corruption, as Mr Thaksin was attending a United Nations meeting in New York.

Other CNS members, including air force chief ACM Chalit Phukphasuk, permanent secretary for defence Gen Winai Phattiyakul, navy commander Adm Sathiraphan Keyanont, supreme commander Gen Boonsrang Niampradit and deputy permanent secretary for defence Gen Saprang Kalayanamitr, may escape any retribution from a new government as they will retire next year.

Some military sources said a PPP-led government, if successfully formed, would not resort to harsh action against the military because it would lead to a serious conflict. However, there will be changes at the top in the military.

Thaksin-backed party takes lead in polls

Business Times (24 December 2007)

FIFTEEN months after being ousted by the military in a coup d'etat, the party backed by former prime minister Thaksin Shinawatra, has taken a lead in Thailand's much awaited general elections

The People's Power Party (PPP), which is closely associated with Dr Thaksin, looks set to get the first chance to form a government. Early indications suggested that the party could secure more than 230 seats out of the 480 seat Thai parliament.

'We are going to form the government as we have the largest number of seats, and we hope to have the decision by early next month on which other party would join us,' Samak Sundaravej, the leader of the PPP said at a press conference.

He added that he wanted the Election Commission to announce the results soon, so as to allow a government to be formed.

Mr Samak in the past had said that he wanted the self-exiled Dr Thaksin to return to Thailand and fight the legal cases against him, along with granting a general amnesty to the 111 members of Dr Thaksin's now defunct Thai Rak Thai party.

The PPP leader said that his party aims to have at least 300 seats in Parliament. He would also like to have allies among other parties, he added, so that the government would be more stable.
Mr Samak also cast doubt on the early polls conducted on Dec 15 and 16 when close to three million people took part, including about one million in Bangkok alone.

'From the exit polls we had on those two days, it was evident that we were in the lead but we have our suspicions now as the results in Bangkok look very different from those that we had anticipated,' he said.

'We will investigate this and inform in the future,' Surapong Suebwonglee, the party's secretary-general said.

Meanwhile, the PPP's biggest opponent, the Democrat party, said that it was willing to accept the results and as the PPP has invited parties to join it in forming a government, the Democrats would wait for the PPP to try its luck first. If the PPP fails, they will then look into ways to form a government. The Democrat party ruled out joining the PPP team.

Military installed Prime Minister Surayud Chulanont said that it was time that the people's voice was heard and that a government should be formed as soon as possible.

'I would like to request that all parties should accept the results, as the outcome is the wish of the people and we have to listen to their voice,' Mr Surayud said.

He added that a lot of work still needed to be done before a new government could take office, noting that the PPP, while being in the lead, is still short of a majority.

Mr Surayud stressed the need for reconciliation in Thailand so that the country could move forward. He urged the people and political parties to heed the message of Thailand's King Bhumibol Adulyadej, who has called for national unity.

Commenting on the ongoing cases against PPP that could lead to its dissolution, he said that the process should be left to the justice department and nobody should intervene.

'The justice system should not be intervened in and we have to leave it to the department to make its own decisions,' he said.

Some leaders of Thailand's smaller parties - such as Sanoh Theinthong of the Pracharaj Party - attributed the success of the PPP in this poll to the failure of the current government and the military.

As at 10 pm local time last night, the PPP was leading with 232 seats. The Democrat Party had 162 seats, the Chartthai Party 40 seats and the Puea Pandin had 24 seats.

Official results will be known in a month's time although the Election Commission indicated that it will announce them as soon as possible.

Stability of next govt seen as crucial

The Nation (25 December 2007)

Concern over restoration of confidence
The business sector is worried about the stability of the next government and fears the election results are unlikely to revive confidence as soon as expected, because they could lead to further political tension regardless of which party takes power.

Since the People Power Party (PPP) appears in the best position to form the coalition government, businessmen also warned that it must be careful in terms of public spending to finance its populist policies.

Sunday's election saw a close result in the proportional representation votes. And even though the PPP won the most seats overall, it did not win a clear majority and has yet to form a coalition.

"Trade and investment are likely to slow down further next year," said Marco Sucharitkul, president of JP Morgan Securities (Thailand). "The new government is unlikely to push for big policies because the political tension is set to continue even after the election."

The unofficial vote result gave the PPP 232 of the 480 seats in the lower House. The Democrats came second with 165 seats, followed by Chart Thai with 37 and Puea Pandin with 25.

Federation of Thai Industries (FTI) chairman Santi Vilassak-danont is concerned that economic confidence will be shaken, no matter who forms the new government.

If the PPP forms the government, opposition could arise, he said. In that scenario, the economy would suffer from lower confidence as the private sector prefers a stable government which can ably lead the country out of tough times.

"The voting result could pose some problems to national administration due to the opposition's numerous demands. This could rock the new government. However, if the Democrat Party becomes the core coalition party or becomes part of the government, opposition should be nil at the beginning, but internal conflicts could occur after a while," he said.

"If any party forms a government and makes the public lose more confidence, I do not think it should remain the government then."

He believes that if the Democrat Party takes power, it will hurry to produce results because it wants to create a good image and boost public confidence in the party.

Santi said foreign investors were eager to know who would be the next prime minister. If economic ministers are acceptable, this could restore confidence.

Pramon Sutivong, chairman of the Board of Trade of Thailand, said he was worried about the new government's economic policy.

"The new government should be careful in implementing economic policies, especially populist ones because revenue might not be sufficient to finance these policies, even though they have both good and bad consequences."

Pramon called for policies to increase people's income to be accelerated.

On an amnesty for the 111 banned Thai Rak Thai politicians, he said: "The new government should respond to people's needs, not satisfy its own agenda. The amnesty might erode people's confidence here and abroad."

Poj Aramwattananont, chairman of the Thai Frozen Foods Association, agreed, saying the new government should focus instead on resolving political conflict and the violence in the South.
Tanit Sorat, chairman of the FTI's committee on transport, transportation and logistics, said the private sector did not expect much from political developments.

"Everything has changed. We believe the economy can continue to grow under the pressure of political turmoil," he said.

"We have to watch the decisions of Puea Pandin and Chart Thai," said FTI vice chairman Nipon Surapongrukchareon. "If they join in a PPP-led coalition government and People Power leader Samak Sundaravej is appointed as prime minister, he will need to adjust his points of view in order create harmony among the parties."

However, he said the PPP's team seemed to be too weak to handle the tough economic problems and should recruit economic experts to build confidence among local and foreign investors.

Wichian Mektrakarn, president of cellular operator Advanced Info Service (AIS), said he would welcome any government as long as it is democratically elected. He insisted AIS had a clear stance of staying out of politics.

AIS is the flagship of Shin Corp, which was founded by the family of ousted prime minister Thaksin Shinawatra.

Darmp Sukontasap, Tesco Lotus senior vice president, said the high turnout for the election was encouraging. "This indicates that most Thais are looking forward to greater political and economic stability following the election," he said.

"In my view, the most urgent task for the new government is to restore investor and consumer confidence and get the economy back on track. Of course, political stability will have to come first. It is the only way the new government can effectively implement its policies."

Central Retail Corp CEO Tos Chirathivat said the private sector wanted political stability as the most significant factor in raising consumer confidence, domestic consumption and foreign investment.

"Any legislation and regulations, such as the foreign business and retail business laws to be considered by the new government, should be clear and certain so that firms can make business plans effectively," Tos said.

Chumpol Saichuer, chairman of the Thai Logistics Alliance, said the PPP might have more advantage in forming the new government than the Democrats as its populist policies had been proven over time.

However, investors' reaction to whichever party formed the government depends on which has a better economic leader and policies.

"The SET [Stock Exchange of Thailand] Index could be an indicator of which party would be welcomed," he said.

Krisada Chavananand, president of the Palm Oil Crushing Mill Association, said that whichever party formed the new administration should try to look ahead to create economic value.

The new government should also continue any projects that are beneficial to the country. "I hope not to see any doom-and-gloom situation in the forming of the new government," he added.

United Overseas Bank (UOB) Economic-Treasury Research said in a release that the aftermath of the election and the future of Thailand remained far from clear-cut.

Major risks ahead continue to impair the outlook for the economy. With projected 2007 growth in gross domestic product of 4.5 per cent, Thailand has lagged behind regional rivals like Indonesia and the Philippines due to political uncertainty.

The election had been hoped to turn the country's economic fortunes around, but domestic consumption and investor sentiment will likely to remain shaken for the first quarter of next year, and will recover only when a stable government can be formed and economic policy spelt out in the second quarter, the UOB unit said.

So far, markets have responded cautiously - the onshore baht rate was largely unchanged at 33.69 to the US dollar, compared with 33.71 on Friday. The SET rose 2.8 per cent on Friday in anticipation of a clear electoral outcome but is likely to reopen mostly lacklustre tomorrow, given the uncertainty about the next government.

The Association of Thai Travel Agents wants the new government to work more closely with the private sector and cater to tourism developers' needs, said president Apichart Sankary.

"Previous governments focused on tourism because it was a key sector for the economy. But they never worked to close to tourism operators. The country's tourism development could still fail," he said.

He said the association wanted electronic visas on arrival for foreign visitors, which are faster than manual immigration and more efficient too, and for work permits to be issued to foreign tour guides, particularly Koreans, Russians and Arabic speakers. It also wants the tourism portfolio to be under the prime minister.

One-Two-Go and Orient Thai airlines chief executive Udom Tantiprasongchai said the country could attract more than 20 million tourists a year in the near future, nearly double the current number, but the government has to encourage private development.

"Look at Malaysia, for instance. It gets almost 20 million arrivals a year, and there isn't that much to do [there] when compared with the tourism products and services we have. This success is because of government help," Udom said.

True wants new spectrum

The Nation (24 December 2007)

True Corp is asking the national telecom regulator for a new cellular spectrum to ease congestion on its subsidiary True Move's 1,800-megahertz band.

True Corp subsidiary Samut Prakan Media reapplied for the spectrum. With more than 12 million subscribers, True Move's 12.5-megahertz bandwidth of the 1,800 megahertz spectrum is almost saturated.

National Telecommunications Commission secretary-general Suranan Wongvithayakamjorn said the commission had no cellular spectrum available.

He said Samut Prakan Media would have to share spectrum as per regulations that took effect in July.

These pave the way for telecom operators to request commission permission to either transfer rights and duties of spectrum to other operators or use others' spectrum.

The regulations aim to reallocate existing spectrum for maximum utilisation.

Sharing plans need to be approved by the commission.

A True Move source said the company had asked Total Access Communication for the use of DTAC 50MHz-bandwidth, 1800MHz spectrum. DTAC declined, the source added.

DTAC uses the 800MHz spectrum, too. It wants to secure use of 900MHz spectrum from Advance Info Service (AIS). This frequency allows AIS to roll out provincial networks at lower cost than for 1,800MHz.

Telecom industry sees a mixed 2008

The Nation (25 December 2007)

The telecom industry is optimistic about growth in consumer spending on cellular services next year but has little hope of any progress on licences for new technology.

With the expected return of consumer confidence after the general election and rising number of subscribers, one telecom analyst forecast that spending on cellular services next year would grow by 11.6 per cent from the roughly Bt151 billion expected this year.

Advanced Info Service (AIS), the biggest cellular-service operator, conservatively forecast that such spending would reach Bt159 billion, versus Bt151 billion this year and Bt144 billion last year. The total number of mobile-phone connections is expected to reach 64 million next year, up from 52 million by the end of this year.

Sigve Brekke, chief executive of industry No 2 Total Access Communication (DTAC), is upbeat that the industry will see revenues growing strongly again after low growth in the last three years due to price wars.

Meanwhile, True Move chief executive Supachai Chearava-nont sees next year as a time to tap different market segments, not for price wars.

DTAC chief commercial officer Thana Thienachariya said the competition among cellular operators would shift from acquiring new users to maintaining existing customers in response to the virtual maturing of the market.

AIS has more than 23 million subscribers, DTAC more than 16 million and True Move more than 12 million. There are also more than one million broadband Internet subscribers in Thailand, of whom 600,000 are with True and around 200,000 with TOT.

On the regulatory side, AIS president Wichian Mektra-karn summed up his view of the industry next year in two words: "a mess".

He said the National Tele-communications Commission (NTC) had yet to grant the long-awaited new spectrum licences for third-generation (3G) or WiMax broadband wireless to telecom operators so that they could invest in the new technologies, which would boost the economy. Cellular operators hope to use the broadband wireless technology to offer new data services and boost revenue.

And even if the NTC does grant WiMax and 3G spectrum licences next year, these wireless broadband services will not be widely adopted before 2009, according to Kaneungjit Suriyathumrongkul, senior director of business development of Qualcomm Thailand, a market leader in the Code Division Multiple Access (CDMA) 2000-1x cellular technology.

NTC commissioner Setha-porn Cusripituck said the NTC expected to issue the 3G and WiMax licences next year. The regulator is in the process of hiring UK firm Interconnection Communications as a consultant to draw up the licensing terms and conditions for the 3G spectrum.

"We need time to carefully consider the number of licences and the allocation method to ensure maximum national interest," he added.

However, a telecom expert said he did not expect to see the NTC launching new spectrum licences or risking the possibility of legal action because it was supposed allocate telecom and broadcasting spectrums jointly with the yet-to-be formed National Broadcasting Commission (NBC).

The formation of the NBC was stalled in 2005 after the Central Administrative Court nullified the selection of 14 candidates for the seven posts because the selection process was unconstitutional.

Brekke of DTAC expects both 3G licences and mobile-number portability policy next year. These will drive the industry in the right direction towards a liberalised, level playing field, he said.

Number portability means telecom subscribers can keep their existing phone numbers even if they switch to another network.

Besides waiting for the new cellular licences, the industry has an existing problem to clear: the conflict between the NTC's interconnection fee regulations and TOT's access charge regulations.
The NTC imposed the interconnection regulations in November 2006; they require telecom operators to share voice and data revenue from calls between their networks on a fair basis under bilateral agreements. The more one network sends out call traffic, the greater the interconnection fee it has to pay to the receiving network.

This means that telecom operators whose networks get dumped with incoming traffic will be compensated. The high interconnection fee will also discourage telecom operators from dumping call traffic on other networks.

TOT opposed the regulations after DTAC and True Move stopped paying access charges to TOT and adopted the interconnection regulations instead. TOT retaliated by filing civil suits to demand from DTAC and True Move a combined overdue access charge of more than Bt14 billion.

The access charge is what DTAC, True Move and Digital Phone Co, all CAT concession-holders, have paid TOT to connect through its facilities. TOT earns more than Bt14 billion from access charges each year.

TOT also filed a lawsuit in the Central Administrative Court to revoke the interconnection regulations, citing the effect on its business. Many in the telecom business expect it will take years before a ruling is delivered.

AIS is not subject to the access charge because it holds a TOT concession. However, it is also feeling the impact of the access-charge dispute because TOT does not allow it to book interconnection revenue. AIS is estimated to earn net revenue of between Bt2 billion and Bt3 billion from interconnection fees per year.

Wednesday, December 19, 2007

NTC approves CAT interconnection

The Nation (19 December 2007)

State agency still needs to agree on a deal for charges with other operators

The board of the national telecom regulator approved the interconnection plan of CAT Telecom on Monday, which set in motion the state agency's entry into the new regulatory framework.

But it remains to be seen whether CAT can reach agreement on bilateral interconnection charge rates with telecom operators, due to its plan to pay a low interconnection rate.

National Telecommunica-tions Commission (NTC) chairman Choochart Phromprasid yesterday said the approval meant the state agency was the latest telecom operator to enter the regulatory scheme.

As the next step, CAT will enter into negotiations with telecom operators on bilateral interconnection charge rates.

The NTC imposed the regulations last November, requiring all telecom operators to bilaterally share voice and data revenue between the networks involved in calls on a fair basis.

According to its interconnection details, CAT plans to pay the origination and termination rates at the same 21 satang per minute. The origination rate is what CAT will pay to the networks that originate calls via its overseas call network.

The termination rate is for CAT and its joint venture cellular service marketer Hutchison-CAT to pay to the networks that receive their calls.

Advanced Info Service (AIS), Total Access Communi-cation (DTAC) and True Move, which signed bilateral interconnection rate deals late last year, have charged each other Bt1 per minute on average for the termination rate.

Currently, CAT shares Bt3 per minute of the revenue with the networks that originate calls via its conventional overseas call network, and Bt1.50 per minute for calls via its overseas call Internet Protocol network.

A telecom-industry source said it would be difficult for CAT to reach bilateral interconnection deals with the three cellular operators when all three have paid and receive the high termination rate of about Bt1 per minute.

They are concerned that if Hutch can pay the low termination rate, it will continue launching heavy promotions, given that it does not have to be burdened with the high interconnection-charge rate and that will prompt heavy Hutch call traffic on their networks, the source added.
DTAC chief commercial officer Thana Thienachariya said the CAT termination rate was unacceptably low. A source at CAT, however, said the calculation was based on the agency's actual business cost.

Thana added that if the cellular operators and CAT could not reach satisfactory agreements on rates, the NTC would intervene and impose interim rates for them.

Recently, DTAC filed a complaint to the NTC that Hutch's call promotions dumped 33 million minutes of call traffic per week on its network, while DTAC sent back only 16 million minutes of traffic per week. The NTC has yet to make a ruling on the matter.

Hutch has about 80,000 customers, while DTAC has more than 16 million

Government urged to stimulate local growth

Bangkok Post (19 December 2007)

The new government must move quickly to stimulate the domestic economy to help business operators, said Santi Vilassakdanont, the chairman of the Federation of Thai Industries.

The FTI estimated that domestic consumption expanded by only 1-2% this year, and made a minor contribution to the Thai economy. He urged the next government to concentrate on stimulating local consumption.

''The programme should be focusing on promoting new investments in order to increase liquidity in the Thai economy,'' Mr Santi said yesterday.

Political stability would be a key factor in promoting investment in the country, he said, as industrialists are reluctant to expand even though their capacity utilisation rates are as high 90%.

He said the industrial confidence index had risen slightly to 82.3 points in November from 81.9 the previous month, driven by hopes that the political environment would stabilise.

Further investment in petrochemical expansion on the Eastern Seaboard and in megaprojects would improve the investment climate and stimulate consumption, he said.

The Board of Investment (BoI) has granted investment privileges for 1,241 projects worth 662 billion baht in the first 11 months of this year.

The FTI predicted that growth in the industrial sector in 2008 would be on par with 2007 at 7% if GDP grows by 4.5% to 5%.

However, industrialists will still face the challenge of high oil prices and other fuel costs.

Although the domestic market has stalled, the export sector is forecast to expand by 16% to US$150.5 billion in 2007 and is projected to grow by 10-12.5% to reach between $165.6 billion and $169.4 billion in 2008.

Reflecting slow local demand were auto sales, where exports outpaced local sales for the first time, said Surapong Paisitpatnapong, a spokesman for the FTI's automotive industry club.

Revenue from car and motorcycle exports in the first 11 months of the year was 433.89 billion baht, up 25.63% from 345.38 billion baht in the same period a year earlier.

Mr Surapong said export revenue next year would continue to outpace domestic sales value.
Total car production in the first 11 months of this year expanded by 7.85% to 1.18 million units from 1.10 million units last year.

NTC approves CAT interconnection

The Nation (19 December 2007)

State agency still needs to agree on a deal for charges with other operators

The board of the national telecom regulator approved the interconnection plan of CAT Telecom on Monday, which set in motion the state agency's entry into the new regulatory framework.

But it remains to be seen whether CAT can reach agreement on bilateral interconnection charge rates with telecom operators, due to its plan to pay a low interconnection rate.

National Telecommunica-tions Commission (NTC) chairman Choochart Phromprasid yesterday said the approval meant the state agency was the latest telecom operator to enter the regulatory scheme.

As the next step, CAT will enter into negotiations with telecom operators on bilateral interconnection charge rates.

The NTC imposed the regulations last November, requiring all telecom operators to bilaterally share voice and data revenue between the networks involved in calls on a fair basis.

The termination rate is for CAT and its joint venture cellular service marketer Hutchison-CAT to pay to the networks that receive their calls.

DTAC chief commercial officer Thana Thienachariya said the CAT termination rate was unacceptably low. A source at CAT, however, said the calculation was based on the agency's actual business cost.

Thana added that if the cellular operators and CAT could not reach satisfactory agreements on rates, the NTC would intervene and impose interim rates for them.

Hutch has about 80,000 customers, while DTAC has more than 16 million.

Monday, December 17, 2007

CP Group injects B3 billion in new funding into True Move

Bangkok Post (15 December 2007)

The CP Group will provide a three-billion-baht capital injection into the third-ranked cellular provider True Move.

The financing would come from Bitco, the holding company parent of True Move, through a rights offering of six billion shares at 0.50 baht each to CP.

Bitco is currently controlled by True Corp, the CP Group and Wirefree Services Belgium, a subsidiary of France Telecom.

True Corp would have the right to repurchase the Bitco shares on a cost-plus basis at any time over the next 18 months. Pricing for the buy-back clause is 0.53 baht per share if purchased within the first six months, 0.56 baht if exercised within six and 12 months and 0.59 baht if exercised between 12 and 18 months.

The share offering would increase CP's stake in Bitco to 23.92% from 0.76%, while True's holding would be diluted to 75.26% from 98.17%.

True Corp vice-chairman Athueck Asvanund said the capital injection would help relieve liquidity pressures for True Move. He said various options had been explored to ease working capital difficulties, including having the company take on additional loans.

But any additional borrowing would have to secure approval from existing creditors, a process complicated by the holiday season.

True Corp chief executive Supachai Chearavanont said the company would definitely exercise its right to buy back the Bitco shares from CP.

He said the financing would allow True Move to continue with its network and market expansion.

''True Corp is delighted that CP Group continues to show its long-term commitment to True Corp, and its confidence in the growth potential of True Move and the Thai mobile industry,'' Mr Supachai said.

True Move reported 11.2 million subscribers as of Sept 30 with 2.1 million new additions in the third quarter. The company had a market share of 22.7% at the end of the quarter, with a full-year market share target of 33%.

Mr Supachai said True Move was ''nearly cash flow positive'', and that the company's network covered 92% of the population.

True Move reported nine-month net losses of 1.15 billion baht, down from losses of 1.78 billion the same period last year. But the company reported a third quarter profit of 936.3 million baht, compared with losses of 760.5 million last year. Service revenues, including interconnection charges, were 8.4 billion baht in the third quarter, down 3.9% from the previous quarter but up 44% from the year before.

The company's current liabilities exceeded current assets by 12.45 billion baht as of Sept 30, with long-term borrowings of 27.91 billion.

True Move said the issue price of 0.5 baht per Bitco share was the same price used for a debt-to-equity conversion made last month, where Bitco converted 7.06 billion baht in debt owed to True Corp to shares.

Noppadol Dej-Udom, the deputy chief financial officer of True Corp, said the transaction helped strengthen True Move's balance sheet without incurring additional interest costs.
True shares closed yesterday on the SET at 5.95 baht, down 25 satang, in trade worth 148.39 million baht.

Upside still likely, unless SET falls below 826

Bangkok Post (17 December 2007)

World oil prices and shipping indicators should help SET, though some weakness is expected in bankingLook for a rising trend until Dec 28, to Jan 3, but with a possible interim dip down to Dec 25. The upside for Dec 28-Jan 3 time zone is not clear. This bullish scenario will become more likely if the SET energy index goes above 22,230. In any case, also have the stop-loss lines that we will mention below. In the big picture, the oil price is likely to trend higher, and there will be talk of the price going above $100 a barrel again. This will support the Thai energy sector. As to the Dec 28-Jan 3 time zone, it is based on the global trend, which should go up at that point. But note that this time zone will also be a resistance, if we do get there.

Less certain, but looking promising nevertheless, look for a rebound in the Baltic Dry Index to prop up the shipping sector and the SET, particularly if PSL closes above 28.25, along with TTA closing above 51.

As for PTT, a closing above 374 will be very positive. There are important barriers at 374 and 384-386, but once the 374 barrier is taken out, trading should continue up toward 412, despite a temporary stall at 386. On the downside, there is no easy signal to gauge the outcome, but a closing below 346 would be a sign of risk. In any case, a breakout above 374 looks more likely than a closing below 346. Look at chart C.

The stop-loss lines, on aiming up, are when the close of the SET is below 826, the SET50 below 599, TTA below 45.25, PTT below 346, and SCB below 80. Cut back not in one stroke, but gradually, if those signs happen, one by one.

And also cut back, if the Dow closes below 13,248, the S&P closes below 1,460, the Nikkei closes below 15,365, and the Taiwan weighted index closes below 7,987 (four out of four), because it would mean that our bullish assessment of the global trend could be wrong.

In particular, if the Taiwan weighted index closes below 7,987, it would be the beginning of a medium-term double top warning for the Asia Pacific, not only a short-term warning, based on the charts we discussed a few weeks ago.

The second warning would be when the Dow closes below 12,517. Fortunately, the Dow closing below 12,517 does not look very likely, which is why we still ask you to be in the market.

We leave you with this upside outlook and the stop-loss lines, because this column will not be updated here for the next two weeks. However, there will continue to be daily updates in the English Market Timing, www.kasikornsecurities.com.

The above-mentioned Dec 25 cycle has nothing to do with gazing at the political crystal ball to the Dec 23 election. It is a straightforward technical cycle, based on the bank sector, which may become weak again between now and Dec 25, before rebounding afterward. But note that Dec 25 will not be a threat, if SCB can close above the 84.50 resistance.

At this point, this column emphasises the global equities trend, and the rising oil price, over and above Thai politics. In politics, clouds are still likely to linger after the election, and the market is likely to look for the direction elsewhere.

Let us now go to the charts behind some of the above scenarios. In chart A, we see the oil price rebounding from the key cycle support, and the rising trend may continue until March, based on the upper vertical lines in the chart. And, the potential upside for the Nymex nearest oil futures contract is $107-116 a barrel, based on chart B.

Meanwhile, if the SET energy index closes above this week's resistance at 22,195, or next week's resistance at 22,230, it would signal that Thai energy stocks are reacting very positively to the rising oil price, especially if PTT also goes above 374. In such case, the upside for the energy index should extend to 23,300, or higher; in particular, and as an example, PTTEP should go up to test the 173-176 resistance. Its last closing was 158.

While the oil price may be on a rising zigzag until March, there is, however, a resistance against global equities, between Dec 28 and Jan 3, based on charts D and E. That means we may have to back off again, instead of aiming for an uninterrupted rising trend toward March. This will be updated, when this column returns early next year.

Charts D and E show a possible rising global equities trend until Dec 28 or Jan 3, but if we are wrong, there may be a significant interim dip down to Dec 25, based on the bank sector in chart F. The overall picture is depicted in chart G. Either which way, keep the stop-loss lines, as discussed above, while aiming higher.The next analysis column will be published on Monday, Jan 7. We wish all our readers a safe holiday and a happy and prosperous new year.

Anant Tantuvanich and Pattarawan Vangmingmart are with the Market Timing Department at Kasikorn Securities.

Friday, December 14, 2007

AIS says strategy will change

Bangkok Post (14 December 2007)

Company prepares for market saturation.

Advanced Info Service, the country's largest mobile operator, plans to shift its focus in 2008 to maintaining its revenue share rather than increasing subscribers.

The company aims to capture at least half of the 159 billion baht spent on telecom services per year. AIS plans to expand aggressively into fixed-base wireless broadband services (WiMax) and third-generation mobile services as part of its strategy to become an integrated fixed-mobile provider.

The company would spend at least 10.5 billion baht building an additional 2,000 base stations, plus three billion baht on marketing budget next year. In addition, AIS has allocated funds to develop third-generation (3G) and wireless broadband WiMax networks once the National Telecommunications Commission starts granting 3G licences. As part of its plan to reposition itself from a premium brand to a mass product, AIS announced a ''price subsidy'' approach to attract the emerging pre-teen segment and increasing its share from 30% to 40% of the market next year. Chief executive Vikrom Sriprataks said Thailand's mobile-phone penetration was expected to reach 100% in 2008 with 64 million subscribers, up from 52.3 million by year-end. Total spending by customers of all mobile operators is projected to grow by 5% to 159 billion baht next year, up from 151 billion baht this year. ''We expect to maintain our share at 50% of the overall spending market next year, after achieving the target this year,'' Mr Vikrom said without elaborating on figures. AIS expects to have 24 million subscribers in a total market of 52.3 million this year. The company had 19.5 million customers in a market of 40 million in 2006. Mr Vikrom said AIS planned to start providing voice over Internet protocol (VoIP) services next year on both mobile and fixed-lines. Mobile services on 3G, WiMax and high-speed downlink packet access (HSDPA) would also be seen next year. President Wichian Mektrakarn said AIS planned to spend at least 10.5 billion baht to build an additional 2,000 base stations at skytrain stations and in untapped tourist destinations, bringing its total to 14,500 bases next year. He also said that AIS would focus on five key areas in 2008: network quality, service excellence, variety of products and services, privileges and corporate social responsibility. Somchai Lertsutiwong, executive vice-president for marketing, said AIS was moving toward a third-generation ''integration marketing'' strategy next year, a combination of functional and emotional marketing approaches. ''We aim to become a 'best offer' brand next year with segmentation pricing plan approach and free trial services, targeting pre-teen and SMEs segments,'' he said, adding that AIS would opt to subsidise some tariff plans in the pre-teen market. Mr Somchai said AIS projects revenue from GPRS and Edge networks to grow by 40% next year, driven mainly by surging mobile internet demand. In contrast, he said, the voice-based market would grow only 1% while data communication services would increase by 20% next year. AIS has restructured its business functions by separating into three divisions: fixed-line under Advanced Datanetwork Communication and Super Broadband Network; mobile phone and 3G services under AIS and Advanced Wireless Network; and solutions under Wireless Distribution Service, Advanced International Network and M-Pay Co.

Shares of AIS (ADVANC) closed yesterday on the Stock Exchange of Thailand at 96 baht, unchanged, in trade worth 394.39 million baht.

AIS expects usage to rise by 5 per cent

The Nation (14 December 2007)

The overall spending on mobile-phone services next year will reach Bt159 billion, against the predicted Bt151 billion this year, Advanced Info Service (AIS) predicts.

"People have spent more and more on mobile-phone services," CEO Vikrom Sripataks said yesterday, adding that spending last year stood at Bt144 billion.

However, a telecom analyst said the AIS forecast seemed conservative, as he expects growth to reach 11 per cent.

AIS has targeted a 50-per-cent share of people's spending on mobile-phone services both this year and next, Vikrom said.

The largest cellular operator - with more than 23 million subscribers - has initial plans to spend Bt10.5 billion next year on network expansion, with a view to increasing its numbers of cell sites by 15 per cent to 14,500, said executive vice president for operations Weerawatkiat Tipongthaworn. AIS's network expenditure last year was Bt30 billion.

President Wichian Mektrakarn said AIS was ready to invest in the roll-out of a 3G wireless broadband network once the telecom regulator grants licences. "We've no problem about financing the 3G network roll-out, but the point is the regulator has yet to issue the licences," he said.

Executive vice president for marketing Somchai Lertsutiwong said that next year competition among cellular operators would be much more intense in the big cities.

The total number of mobile-phone users in Thailand is expected to reach 64 million next year, up from 52 million.

Next year AIS will focus more heavily on the pre-teen segment, small and medium-sized enterprises, and the deeper rural areas, Somchai said.

He added that out of AIS's forecast non-voice service revenue this year, 29 per cent will be contributed by SMS, 18 per cent by high-speed networks for data access, 17 per cent by content downloads and 15 per cent by solutions for enterprises.

But the proportion will change next year when mobile-phone users will access much more data from their phones. This will prompt growth of high-speed network revenue to 40 per cent next year, while revenue from SMS will expand only 5 per cent, content download 10 per cent and enterprise solutions 25 per cent.

True bills payable at Power Buy

The Nation (14 December 2007)

True has opened customer-service shops in 20 branches of consumer-electronics shop Power Buy as part of an agreement to increase traffic.

Thiti Nantapatsiri, True's managing director for home, consumer and high-speed access business, said the arrangement reflected the convergence between service and hardware as True customers could shop for Power Buy products and then pay their True service bills in the same area.

True will open another 30 shops in Power Buy branches next year, he added.

True and Power Buy have about 100 and 79 branches nationwide, respectively.

True has a policy of bundling a wide array of its telecom services, from fixed telephones to cellular and pay-TV in one package, to attract consumers.

Thiti claimed that the combined 100 True shops, excluding the shops in Power Buy areas, have recorded customer traffic of about Bt1 million per month.

President Suthisarn Chirathivat said Power Buy had total sales revenue of over Bt10 billion in the last few weeks and it is recording high product sales this month.

Power Buy's vice president for merchandising and new business, Parichart Yamvinic, said that of total sales revenue, 28 per cent was generated by LCD televisions, followed by mobile phones and digital cameras.

Consumer confidence up

The Nation (14 December 2007)

Consumer confidence is showing signs of recovery before the general election, despite rising concern over spiralling oil prices, according to a survey released by the University of the Thai Chamber of Commerce (UTCC) yesterday.

The consumer confidence index turned upward last month for the first time in 13 months, thanks to recovering sentiment before the national election on December 23.

The index rose from 75.5 points in October to 76.2 points in November. All related confidence indexes also followed the upward trend because of the clearer political scene.

However, consumers are still worried about the higher cost of living, driven by rising oil prices.
Thanawat Phonvichai, director of the university's Economic and Business Forecasting Centre, attributed the rising index last month to the upcoming national poll. However, it is too early to say that increasing consumer confidence is here to stay, he said.

"People foresee a clearer political situation. However, the sentiment will be easily hit by any uncertainties. The new government should be carefully aware of any confusion after the election," said Thanawat.

He added that this was the beginning of a recovery. If the political situation shows more stability and oil prices do not surge too much, a normal rate of consumer confidence should be seen in the second quarter next year.

Confidence in the overall economy rose from 68.6 points in October to 69.3 points last month.
Confidence in future income improved from October's 88.1 points to 89.1 last month, while the index on future employment opportunities rose from 69.8 to 70.3 points. Other positive factors contributed to the rising index, including the constant policy interest rate, the Finance Ministry's higher projection of economic growth from 4 to 4.5 per cent this year, and robust export growth of 28 per cent in October.

Despite the upward trend, an index figure below 100 still represents weak consumer confidence. The university's index was based on a survey of 2,253 respondents.

Negative factors last month include an increase in the domestic retail oil price by Bt1.20-Bt1.70 per litre, a SET Index decrease by 60.84 points during the month, the baht's strengthening from 33.99 to 33.85 per US dollar and concerns over the rising cost of living.

Consumers still believe this is not a suitable time to purchase new houses and cars, start new investments or travel.

Thai Chamber of Commerce vice chairman Dusit Nontanakorn said the political situation was still the highest concern of consumers. The new government must urgently set up a stable Cabinet and economic team to increase confidence. When domestic spending recovers, the country's economy should be back on track, he said.

Dusit said domestic spending would be the key driver of the economy next year as exports would show slower growth from the global economic slowdown, particularly in the United States.
"Businessmen are closely monitoring political movements. If the upcoming government can boost investment and domestic spending, the economy should recover in the fourth quarter next year," he said.

To increase economic growth, the government must concentrate on promoting domestic spending and cross-border trading, increasing foreign investors' confidence, and starting public investment to draw private investment.

In addition, the survey found that the gross domestic happiness index had increased from 97.7 points in October to 99.3 last month. However, consumers still expressed concern over the rising cost of living in the future.

Meanwhile, the MasterCard Worldwide Index of Consumer Confidence survey showed that Thai consumers had regained some of the confidence they lost six months ago. However, the current index score of 44.2 is still below the market's historical average of 55.7.

While consumers have regained some confidence with regards to the outlook on employment, the economy, stock market and quality of life, sentiment towards regular income has dropped 17.1 points.

The overall outlook across Asia-Pacific with regards to the economy (68.3), regular income (81), stock market (66.5) and quality of life (66.7) has improved from the previous survey, which was conducted in May. The view on employment (63.8) remains constant.

The volatility in world financial markets, the announcement of heavy sub-prime losses by global financial heavyweights, rising oil prices and inflation costs seem not to have dampened confidence for the first half of next year.

Thursday, December 13, 2007

Investment likely to pick up next year

Bangkok Post (13 December 2007)

New investment should grow 10% in 2008, up from 3.9% this year, thanks to greater market confidence and sentiment following the Dec 23 election, according to Kirida Bhaopichitr, an economist for the World Bank.

She said at an economics conference at the Stock Exchange of Thailand yesterday that 280 billion baht in Board of Investment-approved projects were expected to begin in 2008.

''In 2006, there were projects worth 280 billion baht approved by the BoI. Normally, real investment will start two years after approval, so this should flow in next year,'' Dr Kirida said.
While investor sentiment was expected to improve after the election, the impact on new investment would depend in part on the policy direction of the new government.

''This year we saw fewer direct investment projects from foreign investors, due to uncertainties in government policy,'' Dr Kirida said.

''But I think that investment will pick up after the election thanks to improved sentiment.''
Thanin Pa-Em, a senior official at the National Economic and Social Development Board, said sustainable economic growth would depend on making progress in boosting national competitiveness.

''We know how we can increase competitiveness. But I think Dec 23 will be a turning point for the country and its direction in the future. Without a professional government, our competitiveness will not improve and may even decline,'' he said.

A World Bank survey conducted in 2004-05 showed that regulations, skilled labour shortages and the lack of infrastructure and support services were the major constraints on the country's productivity and investment climate.

Albert Zeufack, a World bank senior economist, said Thailand should move to improve English and IT skills and increase linkages between companies.

The regulatory burden, seen by businesses as the biggest constraint, could be eased more quickly than improvements in skills or infrastructure, he said.

Napatsorn Kitaphanich, a vice-president at Somboon Advance Technology Plc, noted that for the auto sector, productivity growth this year was projected at 7% to 8%, or well behind the 10% to 15% productivity growth posted by Brazil, Russia, India and China.

The appreciation of the baht, rising labour costs and lack of skilled workers were all key constraints.

Mrs Napatsorn said the government should offer more tax incentives for research and development and accelerate new infrastructure investments to help the private sector improve its quality, cost base, engineering and management.

''At the moment, we can compete, so long as there is co-operation between the government and private sector,'' she said.

Chakkaphan Manutsathit, the chief executive officer of Team Precision, said local companies should go abroad to expand their markets and gain intelligence of new consumer trends.

Outsourcing should be increased by Thai companies to boost flexibility and productivity, he said.
''This is a trend that will grow quickly over the next three to five years. If we can't produce our own skilled labour, then we need to go abroad and outsource,'' Mr Chakkaphan said.

Thiraphong Chansiri, the president of Thai Union Frozen Products, said the baht's appreciation was a major constraint on exporters' competitiveness.

Over the past two years, the baht has gained nearly 20% against the US dollar, compared with just 2% for the Vietnamese dong, he said.

''Companies have to be serious about reducing operational costs. If we don't improve, then we simply cannot compete in global markets,'' Mr Thiraphong said.

Samart warns it may miss 2007 target

Bangkok Post (13 December 2007)

The telecoms group Samart Corp said yesterday that its 2008 revenues should be higher than the 20 billion baht expected this year, helped by overseas expansion. However, 2007 revenues would miss the target of 25-26 billion baht due mainly to mobile handset sales by its Samart I-mobile subsidiary, said chief executive Watchai Vilailuck. ''Next year, we will rely more on overseas markets in both handsets and other new businesses,'' Mr Watchai said, adding the SIM subsidiary would expand in Asia, the Middle East and Iran.

SIM, which sells mobile handsets in Malaysia, Indonesia, Bangladesh and Vietnam, aimed to sell five million units of its I-mobile brand in 2008, up 25% from this year, Mr Watchai said.

Samart, 18.9% owned by Telekom Malaysia, is forecast to earn revenues of 20.8 billion baht this year, down 29% from last year, said two analysts polled by Reuters Estimates.

They also forecast an average net profit of 511 million baht, down from 1.99 billion baht in 2006, when the firm booked a 1.3 billion baht gain from investment sales. Subsidiary Samart Telcoms (SamTel), which installs telecoms systems, would also help lift revenues as it would benefit from government spending on IT projects, Mr Watchai said.

Samart operates a wide range of services with SIM and SamTel generating more than 90% of last year's revenues.

Shares of Samart closed yesterday on the SET at 7.85 baht, up five satang, in trade worth 70.37 million baht. Samart I-Mobile was unchanged at 18 baht in trade worth 1.14 million baht, and SAMTEL was unchanged at 7.80 in thin trade worth 17,000 baht.

Wednesday, December 12, 2007

DTAC aiming for top

The Nation (12 December 2007)

New subsidiary applies for NTC licence

Wide Broadband, a new subsidiary of Total Access Communication (DTAC), applied for a licence from the national telecom regulator last week to offer broadband-Internet access.

The move is part of DTAC's plans to make a foray into the wireless- and wireline-broadband domain, with the goal of taking the lead in the long term.

Wide Broadband managing director Sunti Medhavikul yesterday said the company applied for a type-3 licence, which is for applicants offering telecom services via its own large network.

He said Wide Broadband also needed to have a local partner with broadband-Internet expertise to help it develop the business.

He declined to specify the budget for the broadband-network roll-out but did say service coverage would be nationwide. Wide Broadband expects to take between six and 12 months for network design and roll-out.

Wide Broadband is capitalised at Bt1 million and will increase capital later for the network roll-out.

Sunti said the broadband-Internet market still had ample room for growth, given that there were only about a million broadband-Internet users out of a total Thai population of 65 million. The country now has about 10 million combined narrowband- and broadband-Internet subscribers.

True now commands the broadband-Internet market with nearly 600,000 subscribers, followed by TOT with 200,000.

Sunti said Wide Broadband had also recently applied for a licence from the National Telecommunications Commission (NTC) to test Wi-Max wireless broadband-access technology.
Last month, DTAC chief executive Sigve Brekke urged the NTC to join with all private telecom operators to promote third-generation (3G) wireless broadband technology on a trial basis.

While the NTC has mentioned many times it was planning to finish drafting 3G frequency licensing terms this year, it is uncertain whether it can award the new spectrum licences as planned.

The new Constitution calls for a new regulator, the National Broad-casting and Telecommunications Commission, but the process to set it up will take time.

The second-largest cellular operator, DTAC, has about 16 million mobile-phone subscribers.

Dollar Split Against Euro, Yen

The Wall Street Journal (12 December 2007)

After Fed's Interest Rate Move Associated PressNEW YORK -- The dollar rose against the euro but fell versus the yen Tuesday after the U.S. Federal Reserve trimmed a key interest rate by a quarter of a percentage point, falling short of some traders" expectations.

The Fed cut its benchmark federal funds rate to 4.25%, marking the third reduction in three months. The central bank signaled that further cuts were possible if a severe downturn in housing and a crisis in mortgage lending worsen. The central bank also reduced its discount rate, the interest it charges to make direct loans to banks, by a quarter-point to 4.75%.

Currency traders had priced in a quarter-point cut to the federal funds rate, with some expectations for a half-point reduction, said David Gilmore, a partner at Foreign Exchange Analytics in Essex, Conn. The Fed's decision left investors skeptical of the central bank's ability to get ahead of the credit crunch gripping U.S. markets, Gilmore said.

"I don't think this generates a major change in terms of the dollar," he said. "I think the Fed gets a 'C-minus' today for adequately addressing the credit crisis."

Investors disappointed by the central bank's decision sold off stocks, sending the Dow Jones industrial average plummeting almost 300 points.

Following the announcement, the dollar strengthened against the euro but dropped against the yen. The 13-nation currency fell to $1.4675 against the dollar from $1.4712 in New York late Monday. The dollar declined to 110.82 yen from 111.67 yen, as investors shied away from risky yen carry trades, which involve selling off the low-yielding yen in favor of higher-yielding dollars. The British pound dropped to $2.0356 from $2.0462.

Used to jump-start an economy, lower interest rates typically weaken a currency by cutting into investors' returns on assets denominated in it. Recently, however, currency traders with hopes for a stronger economy have also weighed rate cuts' potential to avert a recession, boosting the dollar some.

Tuesday's cut marks the Fed's third rate decrease since September amid mortgage problems in the U.S. that have tripped up borrowers and caused a credit crisis among banks -- fueling wider fears about the health of the U.S. economy.

Despite recovering some in recent weeks, the U.S. currency took a hit after the Fed's two previous cuts, with a bolder-than-expected half-point decrease in September and a quarter-point cut at its Oct. 31 meeting.

A weaker dollar is welcome news for some, including manufacturers who are eager to see American exports become more competitive. The slump has also spelled rising prices for imports and diminished spending power for American tourists overseas.

Last week, the Bank of England cut its benchmark rate to 5.5% from 5.75 percent, but the European Central Bank left its rate unchanged at 4%.

In a day otherwise light on economic data, the dollar bought 1.1319 Swiss francs, up from 1.1282 late Monday, and 1.0130 Canadian dollars, rising from 1.0073.

Tuesday, December 11, 2007

Nowhere to go but up for economy

The Nation (11 December 2007)

After a year of torpor, the next government will have to get to work quickly to restore investor confidence

What will Thailand's economic growth be next year? Already, it has been widely recognised that the Thai economy has bottomed out. The way forward requires a recovery. The new government will benefit from this cycle because it will be starting from the bottom. Although the Surayud government has done virtually nothing in terms of economic management, Thailand will still enjoy an economic growth rate of at least 4.5 per cent this year. This reflects the country's strong resilience.

There will be five major risk factors: high oil prices, the strong baht, the strength of domestic recovery, the stability of the new government, and problems from the US sub-prime loan issue. All countries will get hit by higher oil prices, which seem to be driven by sentiment rather than fundamentals. Were oil prices to stay at US$100 (Bt3,373) a barrel, Thailand would have to find way to reduce its energy imports. Its manufacturing industries would have to pass on the higher cost to buyers, both at home and abroad.

The baht is trending upward. For now the Bank of Thailand appears to have brought the situation under control by intervening in the foreign-exchange market quite fiercely to curb the baht's rise. Implicitly, the central bank has almost re-pegged the baht by revising its foreign-exchange management strategy. For the time being, there is no risk of it doing so because to curb the baht rise, the banking authorities need only to print more baht to buy up the US dollar, while issuing bonds to mop up the excess liquidity.

Over the past four months, the baht has achieved a degree of stability in the Bt33-Bt34/US-dollar range. The stability of the baht, as a result of foreign-exchange intervention, has raised the country's foreign reserves to more than $100 billion.

The strength of the domestic recovery will be recognisable. The new government will focus on restoring confidence, both among consumers and investors. It might take some more time before consumers' confidence returns to "normal". But investment, both from the public and private sector, will act as a catalyst for recovery.

But we expect the new government to start working very early on to make sure money is injected into the system as quickly as possible. The budget will go both to investment and to grass-roots spending to make everybody happy. If the election were to take place again, incumbent politicians would be expected to allocate budget resources to benefit their constituents.

Thailand's growth prospects are reflected in investor sentiment. UBS Securities (Thailand), for instance, has forecasted that the Thai stock market will grow 30 per cent between now and the end of 2008, driven by domestic recovery. The banking, telecom and property sectors will benefit the most from this domestic recovery, and UBS predicts economic growth next year will be at least 5 per cent.

Politics might not pose as serious a problem as many fear. Although the People Power Party might emerge with the largest number of seats after the December 23 election, it might not be able to form a coalition government. Thai politics has yet to overcome its divisions. The People Power Party won't be allowed to return to power, at least for now, as long as the military remains lurking in the background. The likelier prospect is that a coalition government will formed by the Democrat Party, the Chart Thai Party, the Puea Pandin Party and the Ruam Jai Thai Chart Pattana Party.

There might be some political jitters. Parliament might make granting an amnesty to the banned 111 former executives of the defunct Thai Rak Thai Party its first order of business.
Instability might become the fixed image of Thai politics. Yet, this may be the reality we will all have to work with and learn to manage.

As for the US sub-prime problems, banking authorities have been keeping a close watch on developments in the US and its implications in the global financial markets and global economy. Thailand is not likely to be adversely impacted by the US sub-prime debacle because the Thai financial system is not exposed to the mortgage-backed securities issued by the US institutions in any significant way. Thailand is more likely to be hit by the indirect impact caused by global financial volatility.

NTC grants new licences

The Nation (8 December 2007)

The board of the National Telecommunications Commission (NTC) yesterday approved licences for six telecom companies.

Secretary-general Suranan Wongvithayakamjorn said the board had granted a type-1 licence to both Easy System Telecom and GNA Enterprises (Pattaya 2005) to distribute international calling cards and to Network Enhanced Technology to offer call-forwarding.

A type-1 licence is for applicants without their own networks. The board also granted type-2 licences to both Triple T Global Net and Infonet Thailand and a type-3 licence to Loxley Wireless.

Type-2 licences are for applicants with or without their own networks whose influence on competition is expected to be limited, while type-3 licences are for applicants with their own large networks, such as the cellular operators, whose competition could have a significant effect on consumers.

Suranan said the licensing body wanted to finish awarding licences to the remaining applicants this month. Ten applications have still to be considered. The NTC has granted more than 140 licences since its establishment three years ago.

New numbers in gradual roll-out

The Nation (11 December 2007)

The national telecommunications regulator will not grant 6 million additional mobile-phone numbers to each of the three cellular operators on a one-off basis but on a gradual basis to prevent their extravagant use.

Choochart Phromprasid, chairman of the National Telecommunications Commission (NTC), said the cellular operators would overuse the additional numbers if the NTC granted their request.
The licensing body may gradually allocate the re-quested numbers to them on a quarterly basis, he added.

Advanced Info Service, Total Access Communica-tion and True Move each recently requested an additional 6 million mobile-phone numbers from the NTC for use next year.

They said applying for the huge amount of numbers would make it easy for them to manage the numbers and draw up marketing plans.

The NTC will consider the requests for the additional numbers for AIS and DTAC this week and True Move later.

Choochart said that each of the three still had between 4 million and 5 million unused mobile numbers in their distribution channels, according to an NTC survey.

He has threatened to apply the regulations that allow the NTC to charge the telecom operators Bt10 per number for their existing numbers which have not been utilised for a certain period.
Currently the NTC charges Bt2 per additional number.

He added that while the three cellular operators reported that each of them sold approximately 1.5 million mobile-phone numbers each month, the NTC calculated that sales of numbers were around 500,000 monthly.

AIS president Wichian Mektrakarn said he did not understand why the regulator was not willing to grant big batches of an additional six million mobile-phone numbers at one time.

"The NTC has no idea that it would reduce telecom operators' business costs, but I wont complain whatever the final decision is, because it is the regulator," he said.

In a related matter, Choochart said the NTC had yet to make a final decision when it would introduce the new regulations for requests for extra phone numbers.

The NTC's six board members are divided. While some want the NTC to impose the regulations at once, others want it to hold a public hearing first, Choochart said.

AIS has over 23 million subscribers, DTAC around 16 million and True Move around 12 million.

Thursday, December 06, 2007

TOT team visiting Europe

Bangkok Post (5 December 2007)

TOT board directors today will begin a week-long trip to Europe to study the operations of British Telecom, France Telecom and Telecom Italia. Gen Saprang Kalayanamitr, the board chairman, is not on the trip. Deputy president Kittipong Taemeyapradit said the team would focus mainly on British Telecom because it has a similar organisational structure to TOT.British Telecom operates a fixed-line business but is very successful, in particular with its next generation network (NGN), he said. TOT wants to invest in a complete NGN although to date it has committed less than 10% of the amount that would be required.

Col Natee Sukolrat, the board spokesman, said that at France Telecom, the team wanted to see how application services were provided.

TOT held talks on several occasions with British Telecom during the Thaksin government on an NGN network, for which the state telecom enterprise wanted to have BT as an adviser.

Businesses now more leery of govt help

The Nation (6 December 2007)

Businesses now tend to rely entirely on themselves rather than pinning their hopes on government policies and efficiency after experiencing political instability for the past 18 months, says Chaipranin Visudhipol, chairman of advertising agency TBWA Thailand.

This will eventually result in the Thai economy being driven entirely by the private sector rather than the government, unlike in the past, he said.

Many businesses do not have much hope for either the present government or the next government after the December 23 general election when it comes to a recovery of the economic situation next year.

He said businesses could not keep waiting for future external relief.

Instead, they have started focusing entirely on their operations and marketing and gradually forming groups for cooperation to increase business.

One example is the improved performance of many companies this year despite the political uncertainty.

He also suggested marketers find new ideas and new markets to penetrate.

"If they keep selling old things, they'll achieve only short-term success. A clear example is a new segment in the property industry that has emerged this year: the inner-city condominium," he said.

He said the outlook would be stronger next year, with businesses deciding to survive entirely on their own, although that would not have a big effect on the entire economy yet, because there were still many companies that had to adjust themselves to shar-ing and cooperating with others.

"Thais like to work individually. Many still find themselves uncomfortable sharing information and working together with others," said Chaipranin.

Therefore, the changing outlook does not mean a positive change for the advertising industry yet.

Advertising spending by those companies will not improve from this year for some time. Meanwhile, businesses no longer feel any difficulty in dealing with many negative factors that they have been facing since last year.

However, Uefa Euro 2008 and the Olympic Games will partly drive ad spending.

He said there was a possibility for the industry to reach Bt100 billion in value next year, from an estimated Bt90 billion this year, although the value would not be achieved by real demand in ad spending.

Instead, increasing airtime, known as media inflation, in many media channels will be a key factor. Chaipranin predicts media inflation will rise 5 per cent on average next year.

New unit focuses overseas

The Nation (6 December 2007)

Telecom expands into mobile virtual network operations

Samart i-Mobile (SiM) has established a wholly owned subsidiary, i-Mobile Net Plus, to foray into mobile virtual network operator (MVNO) services overseas.

Watchai Vilailuck, president of SiM parent Samart Corp, said this week i-Mobile Net Plus was already offering MVNO services on a trial basis in Malaysia, Hong Kong, Macau and China.

MVNOs lease a cellular network from a telecoms operator and in turn sell their own cellular services and after-sales services.

Watchai said i-Mobile Net Plus was applying for MVNO licences from regulators in these locations in preparation for a full-service launch.

i-Mobile Net Plus has introduced an international budget-call service for Thailand residents travelling to these Asian destinations frequently.

It buys bulk airtime from cellular operators in the four markets, and SIM cards for distribution in Thailand. The SIM cards enable travellers from this country to make low-cost calls home. Rates have yet to be finalised.

Samart sells handsets and mobile content and is involved in the building of state information-technology infrastructure, and power generation.

Watchai said next year SiM would expand handset retail stores to 400, from the present 300. Greater mobile content will be available, boosting revenue.

He forecast profit from mobile content would account for 20 per cent of overall profit at SiM this year.

Sales of SiM brand i-Mobile phones in the domestic and overseas markets are expected to reach 5.6 million units next year, up from a forecast 3.2 million this year.

"We'll spend Bt600 million next year on marketing i-Mobile phones, of which 40 per cent will be for further promoting the brand overseas. The total marketing budget for i-Mobile phones this year is Bt400 million," he added.