Apple tries to crack down on iPhone abusers

By Michelle Kessler, USA TODAY

Apple (AAPL) is battling some customers for control over how iPhones are sold and configured.
The electronics maker is no longer selling iPhones for cash in its stores. It now only accepts credit or debit cards.

It's the latest example of Apple keeping a tight rein on the iPhone, says tech analyst Chris Hazelton at researcher IDC. Apple closely manages many aspects of the popular phone, including carriers it works with and what programs it runs.

The credit-only policy announced last week is designed to discourage people from buying iPhones in hopes of quickly reselling them for profit, Apple spokeswoman Natalie Kerris says. Credit sales may make it easier for Apple to track bulk buyers.

Resellers are doing brisk business on eBay, where about 1,000 iPhones are often up for auction. Prices vary but are often higher than the $399 Apple charges.

Apple controls iPhone usage by warning that altering the phone usually violates its warranty. Even so, owners are overriding restrictions by:

•Using a cell carrier other than AT&T (T). An iPhone is designed to work only with AT&T's network in the USA. Customers can change that by downloading widely available software from the Web to an iPhone via Wi-Fi.

Modified iPhones can usually connect to any carrier using the same underlying technology as AT&T's, including T-Mobile and many international carriers.

Apple this month estimated that about 250,000 iPhones have been "unlocked" in this way, even though some features may not work. That might cause Apple to lose money, because the company is widely believed to have a revenue-sharing deal with AT&T. The companies have not released details.

Hazelton says some modified phones are probably being used in other countries, where the iPhone has not yet been released. (It will go on sale in the United Kingdom, France and Germany this month.)

•Adding unapproved software. An iPhone is essentially a computer, but Apple makes it tough to add outside programs. That should change this spring, when Apple releases new developer tools.
But some customers aren't willing to wait. They're using a software override to download whatever they want. Several recent eBay auctions for unlocked phones also featured "bonus" add-on software, including video games and instant-messaging programs.

"There's a pull from consumers," says equity analyst Ashok Kumar at CRT Capital Holdings. IPhones with fewer restrictions "are much more appealing," he says.

Andres Sanchez, a digital media designer in Orlando, modified his iPhone because he wanted to play games on it. He later switched to T-Mobile cellphone service because he prefers it to AT&T.

TT&T arm to invest in overseas calls

Bangkok Post (5 November 2007)

Triple T GlobalNet, a subsidiary of the provincial fixed-line operator TT&T, is preparing to spend 200 million baht on an international direct dialling (IDD) service to create new revenue to offset declining fixed-line earnings.

The company has already applied for an IDD licence from the National Telecommunications Commission (NTC), and expects to receive it by the end of this year.

The NTC said it might allow Triple T GlobalNet to temporarily use the prefix 024 as its IDD service number until the state telecom enterprise TOT returns its unused 002 and 003 prefixes.

Prasitchai Kritsanayunyong, senior vice-president for corporate finance of TT&T, said the company would begin commercial IDD service early next year without passing through CAT Telecom's international gateways.

Triple T GlobalNet also holds an international internet gateway (IIG) licence, enabling it to provide a data communications network in areas with leased line service.

Mr Prasitchai said competition in the local IDD market would be intense next year thanks to the full liberalisation of overseas calls.

''We expect to see at least a 20% decline in calling rates,'' he said.

Up to six telecom operators provide IDD services through eight numbers in Thailand. TOT and CAT Telecom are the only operators that have two IDD prefix offerings each. The remaining four operators are subsidiaries of AIS, DTAC, True Move and TT&T.

Mr Prasitchai said Triple T GlobalNet expected revenue of 500 million baht in 2008, of which 400 million would come from IIG and 100 million from IDD services.

TT&T targets total revenue of 8.8 billion baht next year, a slight increase from an expected 8.6 billion this year.

But he admitted that TT&T was likely to face losses until next year, largely due to a sharp decline in fixed-line revenue as a result of intense competition from mobile operators.

Mr Prasitchai said TT&T also planned to spend another 200 million baht expanding its data communications network capacity to cater to increasing demand from corporate customers, including banks and telecom firms.

The company expects revenue of 400 million baht from data network services this year and 600 million baht in 2008.

Mr Prasitchai said TT&T subsidiaries were making greater profits, helping the parent firm to offset losses. ''We expect to break even by 2009,'' he said.

CAT turns down TOT's B2.4bn offer for Thai Mobile

Bangkok Post (5 November 2007)

CAT Telecom has rejected an offer by TOT Plc to take over its 42% stake in joint venture Thai Mobile in exchange for 2.4 billion baht.

Col Natee Sukalrat, the TOT board spokesman, said CAT had told the TOT board that it still wanted to participate in the Thai Mobile service.

He said that CAT did not provide details on how it would help TOT to revive the moribund cellular joint venture, which has about 60,000 customers in a mobile market of nearly 48 million.

Infighting between the two state telecom enterprises has been blamed for Thai Mobile's failure to gain a foothold in the five years since it was created.

Thai Mobile currently has accumulated debts of more than one billion baht owed to Samart I-Mobile.

It has also failed to tap the potential of the frequency it owns for third generation service (3G), which is now expected to be delayed until the next government.

Col Natee said that CAT had given no indication that it would provide new funds to operate Thai Mobile in case it needed to expand in the future.

Under such a scenario, Thai Mobile needed to look for new partners and funds in case of expansion, he said, adding that CAT's shareholding would have to be diluted.

Col Natee said Thai Mobile in the future might be an administrator of the 1900-2000 Megahertz bandwidth, which could be used to provide 3G services, while private companies could join as network investors.

In any case, he said, the mobile business would no longer be a core business of TOT as broadband services have a brighter prospect.

However, TOT could not overlook mobile phones and 3G services.

At its peak Thai Mobile had 240,000 customers but its debts now total six billion baht including the one billion owed to Samart I Mobile, which was contracted to provide a call centre and billing services.

TOT has tried to help improve Thai Mobile's finances by negotiating a 50% reduction from Advanced Info Service, the cellular market leader, in nationwide roaming charges.

A source said TOT had also negotiated with IEC and BlissTel on handset distribution and marketing promotions.

TOT has said it would accept a government-to-government joint venture in a 3G network, in which a Chinese enterprise has expressed interest.

TOT has sought approval from the Finance Ministry for 14-17 billion baht in loans for expansion if the 3G plan goes ahead.

Accounting standard not only for banking

Bangkok Post (5 November 2007)

All businesses need to adapt to IAS39 ruleLocal banks and financial institutions have had several years now to prepare for the introduction of International Accounting Standard 39 (IAS39) thanks to reminders from the Bank of Thailand.

The accounting standard, which deals with the recognition and measurement of financial instruments in a company's accounts, has had a significant impact on bank provisioning for distressed assets.

But the reality is that IAS39 affects not only financial institutions, but large companies and multinational firms with large amounts of account receivables or treasury transactions, according to PricewaterhouseCoopers.

''IAS 39 is related to all types of financial instruments including debt and equity investments, loans, receivables, payables, and derivative transaction such as interest rate swaps, currency swaps, or hedging tools,'' said Unakorn Phruithithada, a partner at PWC.

She said that under the current Thai Accounting Standard (TAS), financial assets were classified into five types: trading, loans and receivables, investments held to maturity, investments available for sale and general investments. Current standards also do not stipulate a consistent way of recording derivative instruments.

The new IAS standard would certainly have a wider impact on companies, Mrs Unakorn said. But to date, few firms outside of the financial sector have considered the potential impact on their balance sheets.

For instance, under current Thai accounting practices, companies can set aside a general reserve based on age for account receivables.

But international accounting practices differ. IAS 39 specifies that impairment is deemed to have occurred only with objective evidence, with reserves required based on the status of the individual account. Discounted cash flow also must be used as the means to measure the potential loss. And while general provisions are disallowed, portfolio provisioning is permitted.

Mrs Unakorn said many companies would need to revise their accounting IT systems to support the new method of calculating impairment.

IT systems are also needed to track historical default rates, default patterns and other factors to help classify different groups within the portfolio. Risk management policies should also be reviewed with the involvement of senior management.

''It might be the accounting department that is responsible for implementing the changes, but companies must also prepare themselves in terms of operations,'' Mrs Unakorn said.

She said in some cases, at least 60 periods or five years of data might be required to build a statistical model.

For multinationals or large local firms with operations or investments in other currencies, financial officers also need to consider whether accounting practices need to be changed to cover derivatives and other treasury instruments.

The IAS 39 standard would also impose greater responsibility on companies to disclose information regarding their account receivables and financial assets.

The central bank has already required local financial institutions to comply with IAS 39. The Federation of Accounting Professions, which oversees accounting standards in Thailand, is reviewing the standards and is expected to adopt IAS 39 for the entire local market.

Pressure builds for price rises

The Nation (3 November 2007)

Manufacturers seek hikes this year

The Commerce Ministry may need to allow manufacturers to raise the prices of their goods before next year, because exorbitant increases in oil prices have pushed up production costs.

Some private companies say they are unable to maintain their prices for the rest of this year as instructed by the ministry. This is a view shared at a recent meeting between the Commerce Ministry and a joint private committee consisting of representatives from the Board of Trade, the Federation of Thai Industries (FTI), the Thai Bankers' Association and the National Shippers' Council.

They pointed out that consumer-goods manufacturers were facing losses because of the skyrocketing oil price and rising costs of major raw materials.

As such, the Commerce Ministry will fail to contain the Kingdom's inflation rate at 2.5 per cent, due mainly to cost increases, particularly oil.

FTI chairman Santi Vilassakdanont said many consumer-goods manufacturers would register big losses next year from higher production costs.

"To ensure that manufacturers can survive in business, the government may need to allow price increases for some products," said Santi.

Products hurting the most are petrochemicals and construction materials.

Santi, who is also in the top management of the Saha Group, said Mama instant noodles would sell for a higher price next month, because the group could no longer absorb higher raw-material costs. The group will try to freeze retail prices for other products.

FTI vice president Payungsak Chartsutipol said some manufacturers must be allowed to raise prices soon, because they faced a heavy burden, particularly from oil prices.

"Notably, manufacturers have announced lower profits and turnover since the third quarter," he said. "The effects will continue to be felt to the end of the year, resulting in a domino effect, with lower revenue collected by the Revenue Department."

Board of Trade vice chairman Pongsak Assakul said enterprises were facing more difficulties as the oil price climbed and was expected to surge to US$100 (Bt3,400) per barrel early next year.
He said the long price-freezing measures of the government should be lifted for some products, because companies could not bear the burden into next year.

Commerce Minister Krirk-krai Jirapaet said the government would seriously consider allowing some price increases. However, he pointed that this was not a suitable period to increase retail prices, because consumers were facing a higher cost of living and a slowdown in economic growth.

Based on reasonable, fair and gradual conditions, the ministry will consider allowing price increases, but this may not take effect until next year, he said.

Despite a prediction of 4.5-per-cent economic growth for this year, that is not a rate suitable for increasing prices of goods, which would lead to slower consumption in the Kingdom, said Krirk-krai.

Private companies shared similar views that export expansion next year would grow only 10 per cent, because of several negative factors, particularly higher oil prices and an economic slowdown among Thailand's trading partners.

In addition, both sides discussed measures to prevent circumvention problems in order to take full advantage of Thailand's free-trade pacts. They also agreed to seek measures to increase income in the International Trade Promotion Fund for promoting export growth and to foster closer cooperation between the private sector and the government, in order to facilitate business growth.

The private sector also asked for the government to speak with insurance companies about lowering their premiums in the deep South, because the financial burden of companies in that area have gone up, but their income has dropped.

20% of low-income households have loan-shark debts

The Nation (3 November 2007)


One-fifth of households in Bangkok with incomes under Bt15,000 per month are being preyed on by loan sharks, according to Kasikorn Research Centre.

The company surveyed 1,450 households from October 8-19 on the debts of Bangkokians. It found that 21.1 per cent of households with monthly incomes lower than Bt15,000 had underground debts, 52.6 per cent of them had credit-card debts, 15.8 per cent owed on motorcycle purchase and 5.3 per cent were paying mortgages.

But households with monthly incomes over Bt15,000 said they owed nothing to loan sharks.
Forty per cent of them have credit-card debts, 28 per cent of them have mortgages, and 24 per cent of them are paying off car loans and 4 per cent motorcycle loans.

The prime cause of Bangkok household debt is the cost of living and education, which together account for 37.2 per cent. Then come consumer goods, cars, motorcycles, land, property, appliances and mobile phones.

Other contributors are medication and investments.

Monthly instalments average Bt9,528.38 and interest 8.05 per cent. Most will be paying instalments for another five years.

Broken down by income, households earning less than Bt15,000 per month pay monthly instalments of Bt4,458.05 at 8.95-per-cent interest, those earning between Bt15,000 and Bt30,000 pay Bt10,543.27 at 5.8 per cent, those earning Bt30,000-Bt50,000 pay Bt15,881.82 at 5.4 per cent, and those earning Bt50,000-Bt100,000 pay Bt20,000 at 4.2 per cent.