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.