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.