DTAC announces 3G upgrade

Bangkok Post (16 November 2007)

DTAC, the country's second largest mobile operator, has announced a strategic U-turn in its third-generation mobile plans with a possible eight-billion-baht plan to upgrade existing 2G networks to 3G under the concession rights.

The company also plans to provide affordable mobile broadband service over SIM cards, aircards or mobile phones, with the aim of becoming a leading wireless service provider.

The strategies signal a push into the company's 3G and wireless broadband businesses after saying earlier that it would not rush to invest in high-speed data-rich communications.

Chief executive Sigve Brekke said DTAC was now considering an alternative second-tier approach toward 3G investment since the National Telecommunications Commission (NTC) is not issuing 3G licences.

Under the development scheme, he said, DTAC would upgrade existing 2G switching equipment to WiMax and WiFi in Bangkok and major cities in the provinces at the first stage.

The company would then gradually upgrade Edge networks to high-speed download packet access (HSDPA) nationwide.

''Upgrading one base station costs one million baht. DTAC now has 8,000 base stations,'' Mr Brekke said during the GSM Asia Congress in Macau.

''We are now in talks with Nokia and Siemens for upgrading. A decision would be made in the second half of 2008.''

Mr Brekke said the 1800 and 900 frequencies were technology-independent concessions, and that DTAC and AIS had the right to upgrade their existing 2G base stations from analogue to digital GSM, GPRS, Edge and 3G, respectively.

''It would be a waste if we continue waiting for new licences since the NTC still has an unclear policy,'' he said.

Even network upgrading would require less investment than building new ones, Mr Brekke said. He added that he would prefer to apply for a 3G licence with a 2.1 frequency because it would not require paying heavy regulatory fees to its concession provider CAT Telecom, and would be subject to only 7% for licensing fees.

Meanwhile, he said DTAC would continue pressing the NTC to grant licences.

Mr Brekke insisted that DTAC would continue to focus on voice-based services in 2008 with the goal of boosting mobile penetration to 100%, up from an expected 80% by the end of this year.

''We aim to increase the penetration rate to 150% over the next few years.''

He also said that DTAC is preparing to provide affordable mobile broadband services next year to avoid saturated voice services.

The company plans to apply for an international internet gateway (IIG) licence and a fixed-line licence with the NTC. Commercial services would be in the first half of 2008.

DTAC, in co-operation with GSM Association and Microsoft, is surveying 13 countries including Thailand to gather information for wireless broadband demand.

DTAC has 3.5 million mobile internet users out of a total of 16 million subscribers. Data revenue accounted for 10% of total earnings. The country's penetration for the internet is 12.5%, compared with 52% in Malaysia. The figure is expected to reach 50% by 2012, fuelled by 3G WiFi and WiMax, said Mr Brekke.

DTAC shares closed yesterday on the Stock Exchange of Thailand at 38.75 baht, down 25 satang, in trade worth 37.66 million baht.

iPSTAR likely to break even next year

Bangkok Post (16 November 2007)

Shin Satellite Plc said yesterday that it expected its broadband satellite iPSTAR to break even next year, pushing up revenues and net profit growth.

Revenue growth drivers next year would come from China and India, where demand for high-speed Internet was huge, said chief financial officer Tanadit Charoenchan.

''We will reach several milestones next year. Apart from growth from China and India, other markets in Malaysia, Indonesia and the Philippines will contribute more revenues,'' he said without giving a specific forecast.

Shin Satellite, which operates the $400-million iPSTAR, the world's largest broadband satellite, aims to have sold 220,000 to 250,000 user terminals by the end of next year, up from the 110,000 by the end of 2007.

''It's our best-case forecast. When user terminal sales hit 220,000, we will reach break even point for iPSTAR,'' he said.

iPSTAR's terminal equipment consists of an indoor modem for connection to the Internet, voice service and a small dish antenna with a signal receiver and transmitter. It had sold 93,153 units by the end of September.

The company is expected to report a net profit of 3.27 billion baht this year on revenues of 6.8 billion, according to eight analysts polled by Reuters Estimates.

In the first nine months of this year, it made a net profit of 3.2 billion baht due to a 5.13-billion-baht gain from sales of investments in the third quarter. For 2008, the analysts expected a 43% fall in net profit and a 16% rise in revenues.

Shin Satellite would provide high-speed Internet and telecoms services via iPSTAR in 14 Asia-Pacific countries next year, when the satellite's utilisation rate should double to 12-16% from 6-8% now, Mr Tanadit said.

It planned to launch iPSTAR services in Malaysia and South Korea in December, Philippines in January, Indonesia in February and Japan in the middle of next year, marketing chief Patompob Suwansiri said. ''We are very excited about markets in Indonesia, Philippines and Malaysia. We should start to realise revenues from the three markets fully next year,'' Mr Patompob said.

The company's plan to launch iPSTAR services in India had been delayed until early next year from the fourth quarter, pending a licence on imports of terminals, he said. India and China account for about 42% of iPSTAR's capacity.

iPSTAR, which has a capacity of 45 gigabytes per second (Gbps), 20 times higher than conventional satellites, contributed almost 30% of Shin Satellite's revenues and the proportion was expected to reach 50% next year, Mr Tanadit said.

Shares of Shin Satellite (SATTEL) closed yesterday on the Stock Exchange of Thailand at 10 baht, unchanged, in trade worth 47.86 million baht.

DTAC gives up hope of settling access charge dispute with TOT

Bangkok Post (16 November 2007)

The mobile operator DTAC has stepped up its ongoing fight with state-owned TOT Plc over interconnection charges by announcing it has withdrawn its year-old offers for how inter-network traffic should be settled. DTAC, the country's second-largest mobile operator, submitted a letter to TOT on Nov 8 announcing that it would scrap its offers proposed last year to establish a bilateral interconnection agreement.

DTAC would also no longer accrue funds for interconnection charges (IC) to TOT based on the original offers. IC would only be accrued from the date that both DTAC and TOT reached an agreement.

Since last year, DTAC has halted paying access charges to TOT in favour of IC.

TOT is expected to sue DTAC for payment in Civil Court, with the case filed possibly as early as today.

Sigve Brekke, the chief executive officer of DTAC, said the company had made numerous attempts to reach a voluntary agreement with TOT as required by the interconnection framework.

''We have done all that we can do. What else can we do?'' he said with a hint of frustration.

Mr Brekke said TOT had refused to accept DTAC's IC payments since the beginning, leading the company to hold the accrued payments in a separate account in escrow. Over 1.9 billion baht in funds have been set aside for IC payments to TOT.

He said TOT had repeatedly refused to comply with the interconnection regime as set by the National Telecommunications Commission and was only frustrating efforts to reform the industry for the ultimate benefit of consumers.

The interconnection regime dictates how different operators should be compensated for traffic flowing to their networks. The operator of the caller is obliged to pay a termination rate to the operator of the receiver of the call. A transit payment is made to operators whose networks handle traffic between the originator and the terminator.

Interconnection has been envisioned as eliminating one of the largest distortions among the mobile operators, the question of access-charge payments.

DTAC and third-ranked True Move, whose operating concessions come from CAT Telecom, have historically been obliged to pay an access charge of 200 baht per month per postpaid number and 18% of pre-paid revenue to TOT Plc. Mobile leader Advanced Info Service, whose concession is with TOT, does not pay the access charge.

Mr Brekke said access charge was initially made for two factors. First, to allow DTAC to access TOT's fixed-line telephone network. Second, to compensate TOT as the telecom regulator for the allocation of new numbers.

''But TOT no longer provides these services. We receive our numbers from the NTC, and pay a charge of one baht per number per month to the NTC,'' Mr Brekke said.

But from TOT's perspective, the IC system is clearly to their disadvantage, particularly since the mobile operators have established clear network links among each other to bypass TOT networks.

DTAC's net IC payments to TOT were 9% of total cost of services in the first quarter, or around 1.01 billion baht. By the third quarter, net IC payments to TOT had fallen to 2% of total service costs, or 214 million baht.

''At the beginning of the year, 20% of our calls to AIS and True Move numbers were in transit through TOT. Now, there is none, and the IC only reflects traffic that is going directly to TOT fixed line numbers,'' Mr Brekke said.

He said for DTAC, the company had been a net payer of IC to True Move and AIS in the first nine months, balancing out any benefits gained from savings in access charges. But IC was influenced by the size of each operator's subscriber base and promotional packages, and Mr Brekke indicated that IC for the fourth quarter was more in balance overall.

DTAC's third-quarter telephone service revenues , with IC from other private operators but excluding TOT, totalled 16.1 billion baht, up 35.7% from the year before. Without IC, revenues were 12.46 billion baht, up 4.9% from the year before.

On the expense side, cost of telecom services with IC was 11.06 billion in the quarter, up 48.3% year-on-year, compared with 6.9 billion without IC, down 7.7% year-on-year.

''If you ask, does DTAC benefit or not from IC, the answer is no. We pay more to AIS and True Move now,'' Mr Brekke said.

''And overall, the state _ TOT and CAT Telecom _ receive about the same from all the operators. We pay 40 billion baht today to the state, essentially a cost that is borne by customers.''

TOT's loss from access charges was essentially CAT Telecom's gain, Mr Brekke said, as its revenue sharing agreements with DTAC and True Move would no longer include access-charge fees.

''My hope is that the new government understands that for the TOT, the issue isn't really about access charges for TOT, but rather what it's business model going forward should be,'' Mr Brekke said.

''The NTC is moving forward with liberalisation and opening up competition. But TOT is continuing to fight for the past.''

Mr Brekke said lower regulatory costs would mean lower costs for the public.

''Competition will ensure that any cost savings are passed on the consumers,'' he said.

TRUE Corp. Quarter 3

True in major expansion drive

Nation (16 November 2007)

New services on tap for group's flagship businesses

True Corp will spend between Bt8 billion and Bt10 billion next year on network expansion and new services for the group's units.

CEO Supachai Chearavanont yesterday said most of the budget would go towards extending the networks of its flagship businesses: cellular operator True Move, pay-television operator True Visions and broadband-Internet provider True Internet.

"The spending will come from True's [internal] cash flow," he said.

If the National Telecom-munications Commission (NTC) grants the company a licence for either third-generation (3G) broadband cellular or Wi-Max broadband wireless-Internet service by next year, True will need Bt10 billion to Bt15 billion more over three years to develop 3G or Wi-Max service.

The NTC has yet to finish drafting its 3G-spectrum licensing terms.

Supachai said True was interested more in Wi-Max than in 3G, due to possible lower development costs.

True, together with US giant chip manufacturer Intel, have finished testing the Wi-Max technology.

The NTC recently consented to the telecoms that already have certain frequencies to trial Wi-Max. They are True, TOT and Shin Satellite.

Commissioner Sethaporn Cusripituck said the licensing body is waiting for the three companies to submit the test results for the NTC to develop Wi-Max licensing terms and regulations, which he expects to be ready by yearend.

Supachai said that soon wireless payment service provider True Money will become the group's rising star.

True has been planning to introduce a SIM card with embedded radio-frequency identification technology next year. Users of mobile phones with such SIM cards can simply swipe the devices at retail counters or Skytrain gates to conduct such financial transactions as bill payments.

True has joined with Chinese information-technology vendor Watchdata to develop the cards, which are being showcased at its booth at the Bangkok International ICT Expo 2007. The fair runs from today to next Tuesday at Impact Muang Thong Thani.

True posted a third-quarter consolidated net profit of Bt1.2 billion, compared with a net loss of Bt595 million in the second quarter and a net loss of Bt1.2 billion in last year's third quarter. The improvement was due largely to a sharp decrease in depreciation expenses from longer estimated useful lives of True's assets, better reflecting their economic lives.

Meanwhile, TOT plans to file a civil lawsuit soon against True Move and Total Access Communication (DTAC) for their refusal to pay it access charges.

Supachai said the state enterprise had the right to do that, while DTAC chief executive Sigve Brekke said it was not unexpected.

DTAC and True Move stopped paying access charges to TOT last November and have adopted the NTC's interconnection charge regulations instead. Their outstanding access charges have reached about Bt10 billion.

The access charge had been paid by three cellular operators under CAT Telecom - DTAC, True Move and Digital Phone - to TOT for connecting to other networks via TOT's facilities.
Interconnection-charge regulations require the telecoms to share revenue from voice and data calls between networks.

True profits better than anticipated

Bangkok Post (16 November 2007)

True Corp Plc, the country's only integrated telecoms firm, reported an unexpected net profit in the third quarter due to lower depreciation costs and a surge of new mobile phone subscribers.
True, which owns a majority stake in True Move, the third-largest mobile phone operator, posted a net profit of 1.2 billion baht (0.27 baht per share) compared with a loss of 1.22 billion baht a year earlier.

That surprised six analysts polled by Reuters who had forecast on average a net loss of 820 million baht as they had expected only a slight decline in expenses following True's accounting changes.

However, the charges resulted in an 18% drop in operating expenses and depreciation expenses, falling about 30% in the quarter, the company said.

Revenues rose 20% to 15.5 billion baht, helped by higher interconnection fee revenues, it said.
True Move, whose service revenues account for half of True Corp's, said it gained a net 2.1 million new subscribers in the quarter and now had 11.2 million, or a 35% share of the Thai market.

True, which competes with market leader Advanced Info Service and No. 2 DTAC, said its broadband customers rose 22,000 to 526,000 and it had 597,000 cable television subscribers.
True shares closed yesterday on the Stock Exchange of Thailand at 7.30 baht, up 15 satang, in trade worth 186.7 million baht. REUTERS

DTAC bids to lead broadband market

Nation (16 November 2007)

Brekke urges NTC to promote 3G wireless technology.

Total Access Com-munication (DTAC) is hopeful of taking the lead in the mobile-phone broadband business in the long term.

CEO Sigve Brekke said early this week the company's short-term focus was to drive the mobile-phone penetration rate to 100 per cent before the No-2 cellular operator concentrated on broadband.

Of the 40 million or more mobile-phone subscribers in the country, more than 15 million belong to DTAC.

Brekke has urged the National Telecommunications Commission (NTC) to join with all private telecom operators to promote third-generation (3G) broadband wireless technology on a trial basis.

"You should get it out in the market, to build up public demand," he said on the sidelines of the GSMA Mobile Asia Congress held here this week.

With DTAC's core business in the wireless arena, Brekke believes explosive broadband Internet access demand relies on wireless technologies - from 3G to Wi-Max - rather than fixed-line connectivity.

DTAC has 3.5 million active subscribers connecting to the Internet via their mobile devices.

DTAC has assigned its former chief customer officer Sunti Medhavikul to set up a company to explore the opportunity to offer a wide range of wireless and fixed-line broadband services and to apply for licences from the NTC.

The company is expected to be up and running in the first half of next year.

The company also has a plan to provide financial support and knowledge to any local Internet company intending to promote web-based local content.

True and state-run TOT dominate the fixed-line broadband Internet market with about 600,000 and 200,000 subscribers, respectively.

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

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

This has prompted DTAC to consider another route to enter the 3G era by upgrading its network to offer 3G services on its existing 1,800-megahertz band.

"Ideally, we need the new spectrum for 3G. If impossible, we'll take another route," Brekke said.
DTAC is part of the GSM Association (GSMA), which together with Microsoft revealed the results of a study into mobile broadband computing at the GSMA Mobile Asia Congress. It found huge untapped demand for notebook computers with built-in mobile broadband capability.

The research was commissioned by the GSMA, which represents over 700 GSM cellular operators in 218 countries, and Microsoft.

It was undertaken by Pyramid Research early this year, involving over 12,000 consumer interviews across 13 countries.

Brekke said in Thailand, the survey was conducted on 1,400 target customers and found high demand for mobile broadband notebooks priced from US$500 to $1,000 (Bt17,400 to Bt33,900).

Shin Corp posts third-quarter net profit of Bt754 million

Nation (16 November 2007)

Shin Corp, Thailand's largest telecom holdings firm, posted a consolidated net profit of Bt754 million in the third quarter, a decline from Bt855 million in the same period last year.

The reduced profit was due to lower contributions from its flagship mobile-phone division and losses from consumer-finance business.

Shin holdings include the largest cellular operator Advanced Info Service and Shin Satellite. Cedar Holdings and Aspen Holdings, which are part of Singapore's state investment arm Temasek Holdings, own around 54 per cent and 41 per cent respectively in Shin.

Shin's share price yesterday closed unchanged at Bt26.25.

According to Shin's filing to the Stock Exchange of Thailand yesterday, revenue from the media business dropped when the free TV operator iTV ceased operations after its concession was revoked in March 2007.

In the third quarter, the share of net profit contribution from AIS was Bt1.477 billion, a slight drop from Bt1.597 billion in the second quarter and Bt1.561 billion in the third quarter of last year.

One foreign brokerage house analyst said that AIS' financial performance in the last quarter was likely to be the same as in the third. While the last quarter is usually a season of high call traffic, AIS will also spend more heavily on marketing campaigns.

AIS president Wichian Mektrakarn said the company expected to post a better performance in the last quarter and might not have to launch an aggressive campaign to woo additional subscribers.

AIS, which has over 23 million subscribers, posted a net profit of Bt3.512 billion in the third quarter, a fall of 3.9 per cent year on year and 4.1 per cent on a quarterly basis. The net profit contribution from ShinSat was Bt1.302 billion, compared to a loss of Bt33 million in the second quarter this year and a loss of Bt307 million in the third quarter last year.

In the third quarter, ShinSat made a consolidated net profit of Bt3.143 billion, an increase of Bt3.890 billion over a net loss of Bt747 million over the same period last year.

ShinSat's revenues for the third quarter were Bt6.879 billion, an increase of 280 per cent over the same period last year, due to a gain of Bt5.127 billion on the sale of its 49-per-cent share in its overseas telecom holding Shenington to Asia Mobile Holdings in July. The net loss from the consumer finance provider Capital OK stood at Bt1.878 billion, a sharp rise from Bt549 million in the second quarter this year and Bt373 million in the third quarter last year.

There was an increase in the allowance for bad debts following a change of the re-estimation of the allowance for doubtful accounts in the amount of Bt1.366 billion.

Overhaul due for taxation

The Nation (16 November 2007)

Thailand's revenue code, which determines the taxes paid by all individuals and companies, is to be overhauled by the Revenue Department in collaboration with the Law and Development Research Centre of Chulalongkorn University's Faculty of Law.

The move, which aims to make the country's tax laws simpler and fairer, will possibly propose increases in personal, corporate and value-added taxes.

The overhaul will be preceded by a comprehensive study of taxation laws that is expected to be completed by the middle of next year.

The dean of Chulalongkorn University's Faculty of Law, Tithiphan Chuerboonchai, said yesterday that the outcome of the study would be put as a proposal to the new government.

The study will strive to make the current complicated revenue code readable by laymen and will revise crucial principles of taxation.

Fox example, Tithiphan said he did not agree with the current requirement that a husband and wife be regarded as one taxpayer. This had resulted in higher tax payments than if a couple filed separate personal tax returns. So instead of supporting families, the current law favoured couples who lived together without marriage registration.

Small private firms have also complained that they are placed at a disadvantage when dealing with tax officials. Small and medium-sized firms without the financial resources to hire lawyers or specialist accountants say they often end up with high tax bills. But large firms who can afford expert help end up paying less. Tax evasion is also widespread among private firms because lawyers and auditors show them how to "doctor" their books to avoid full payments, Tithiphan said.

Some complain that businesses waste their resources by filing tax documents twice a month and have asked for a friendlier system.

Tax officials are also accused of giving inconsistent advice about tax payments, resulting in discriminatory practices.

Revenue Department director-general Sanit Rangnoi admitted that the revenue code was out of date because it had been in use for nearly 70 years without major change.

The department has from time to time made minor changes to the code but these have led to more complication because new rules and regulations pile up and often contradict each other or the code itself, Sanit said.

Sanit said the Finance Ministry and the Revenue Department were also considering expanding Thailand's tax base.

Although personal income tax has a progressive rate from 5 per cent to 37 per cent, average taxpayers pay only 5 per cent, which is very low. This is because current tax exemptions and allowances are large, he said. Out of a population of 65 million, only four million Thais pay personal income tax, and most of them are salary earners.

Flexibility for foreign investors

Nation (16 November 2007)

The Commerce Ministry plans to set more flexible conditions to enable foreign investors to operate their businesses easily under the amended Foreign Business Act (FBA).

Business Development Depart-ment director-general Kanissorn Navanugraha said the FBA drafting subcommittee was considering better conditions to facilitate foreign investment by creating a clearer scope of business types listed in Annex 3, the list of protected businesses under the proposed amendments.

This is aimed at increasing foreign investors' confidence.

"The department will provide specific conditions of business types that were listed in Annex 3, so that foreign investors will know whether or not they can operate each type of business," said Kanissorn.

Currently, any foreign investor who wants to operate a business listed in Annex 3 is required to ask for the subcommittee's approval on a case-by-case basis. If the new law comes into effect, foreign investors would no longer be required to ask for the subcommittee's permission. The application and approval process would be predictable and clearer.

The Foreign Business Act covers three lists of protected business sectors deemed critical to national security and subject to degrees of protection. The most protected category is Annex 1, followed by Annex 2.

Foreign investors nonetheless have been keen to participate in the service businesses in Annex 3, but that annex does not allow foreigners to hold more than 50 per cent of shares unless they receive permission from the FBA subcommittee. This has made the approval and application process unpredictable and inconsistent.

Activities in Annex 3 include rice milling, fisheries, forestry, accountancy services, service businesses, legal services, agriculture, engineering, leasing, advertising agencies and retail and wholesale.

To offset the tighter definition of "control management" in the amended FBA, the ministry will adjust the list and requirements under this annex to keep the momentum of foreign investment in Thailand.

The National Legislative Assembly (NLA) earlier won in its bid to tighten the scope of foreign-business operation by expanding the definition of "control management" from simply the voting rights to the foreign shareholders' role in making the company's key decisions.

The final version of the definition has not been made public. The NLA's commissioner is considering the foreign-business bill. It is waiting to be resubmitted for the NLA's reading within two months, before the end of the NLA's term next January.

Kanissorn said since the bill would stipulate a tighter definition of control management, the ministry would relax conditions in all three annexes.

The options include extending the period for companies to adjust their shareholding structure, in order to comply with the new law, from two or three years to five years for businesses under Annexes 1 and 2.

The government is also considering providing a grandfather clause, allowing businesses in Annex 2 to continue without any adjustment.

Meanwhile, Deputy Prime Minister and Industry Minister Kosit Panpiemras said during a visit to Japan yesterday he was aware of lingering concerns about the exchange rate and initiatives undertaken to reform the Foreign Business Act.

"Regarding the Foreign Business Act, my view is the next elected government should be involved, since the time left for this government is limited. In any event, the vast majority of investments in manufacturing would not be affected, since they come under the investment-promotion law," he told a Japanese audience.

"While these issues are undoubtedly important, and there is a fiduciary responsibility that their ramifications be fully explored, I believe we can all agree that the success of the Thai-Japanese relationship transcends short-term currency fluctuations or legal reforms."

TRUE recorded Q3 impressive subscriber growth

BANGKOK, November 15, 2007 –True Corporation PLC (SET: TRUE) recorded impressive subscriber growth in the three months to 1/ Excluding IC September 30 in its mobile phone and pay-TV businesses, led by True Move’s record 2.1 million net adds. Group service revenue and EBITDA were higher Y-on-Y.

True Move adds 2.1 mn subs; 70% market share Q3

TrueVisions adds 28,000 subs; mass market momentum maintained

Convergence strategy working across the Group

Change in assets’ useful lives estimate lowers depreciation costs

Balance sheet continues to improve

More information http://www.truecorp.co.th

IBM in big push to build data centers for clients

Reuters (By Eric Auchard)

SAN FRANCISCO - IBM is staking out a major new source of business helping clients like banks or retailers manage data centers on a par with Internet players such as Google or Microsoft, a top official said on Wednesday.

Bill Zeitler, the executive in charge of IBM's hardware business, said the initiative to set up customers with the technology, software and services to operate data centers could rank in significance with IBM's support for Linux in recent years or its push to get businesses on the Internet the 1990s.

IBM has dubbed its new strategy "Blue Cloud."

The name is a play on IBM's corporate nickname "Big Blue" and "cloud computing," the trend by Internet powerhouses to array huge numbers of computers in centralized data centers to deliver Web-based applications to users, rather than making their customers run such programs on their local machines.

IBM, which pioneered centralized data centers decades ago, is looking to arm its customers with technology similar to what it has long offered in the form of hosted services for clients who rely on IBM to operate their data centers for them.

It now wants to help customers build data centers for themselves composed of thousands of low-cost personal computers, equipping them with the data-crunching power of consumer Internet giants Google Inc , Microsoft Corp ,Yahoo Inc and Amazon.com Inc

"I think Google and Amazon are on to something," Zeitler said. "Our particular focus is taking these standards of Internet computing and bringing them to the mainstream in the commercial world."

BIG BUSINESS, BUT HOW BIG?

Zeitler declined to say how much revenue its cloud computing strategy might produce, saying IBM was still sizing up prospects. "We think this is a big move in the market and we are going to make a big move behind it," said Zeitler, a 38-year IBM veteran whose full title is senior vice president and group executive of IBM's Systems and Technology Group.

In its initial phase, IBM plans to make 200 IBM researchers available to work with clients, which may include both businesses large and small, university research centers as well as government agencies.

The first products of the program are set to be available in spring of 2008, IBM said.

One initial customer of IBM's Blue Cloud strategy will be the government of Vietnam, and it is working with a non-US automaker, the Armonk, New York-based computer company said.

IBM plans to unveil plans for Blue Cloud at an event in Shanghai on Thursday, where it said it will demonstrate a cloud computing system running on IBM's BladeCenter brand servers and low-cost Intel-class microprocessors. It said it also intends to offer a mainframe-class cloud computer system next year.

HOW CLOUD COMPUTERS WORK

The basic idea is to make corporate data centers operate more like the Internet by enabling computing to be spread across a large, distributed pool of computers, rather than on local machines or remote server farms.

This lets organizations switch to resources to where they are be needed, virtually gaining access to computers and storage on demand. The older approach of running individual applications on separate servers means as little as 10 percent of a stand-alone computer's capacity is used.

While big Internet players run networks that tie together hundreds of thousands of computers, large commercial customers may operate tens of thousands of servers, Zeitler estimated.

As part of the strategy, IBM will offer services and products that allow customers to implement "cloud computing" strategies of their own, rather than forcing them to rent space in other data centers and risk exposing business secrets. Companies are struggling to pack more computers into cramped data centers while coping with surging electricity demand.

World Bank urges next Thai government to rebuild, clarify policies

The Nation (16 Nov 2007)

The World Bank has called on the new Thai government to be formed after the December elections -- probably in February -- to take assertive steps to clarify state policies to quickly restore the country's waning investor confidence and to move ahead quickly with already planned mega-investment projects to stimulate the sagging economy. Kirida Bhaopichitr, World Bank economist for Thailand, said the bank projected the Thai economy as growing by 4.3 per cent this year, the lowest in five years -- since 2002, as local consumption and investment had slowed considerably.

The economy next year is expected to expand by 4.6 per cent, performing only marginally better than this year, but many risk factors must be closely monitored, Thai News Agency reported.

The risks include rising oil prices, an accelerating inflation rate likely to stay at 3 per cent, a slowdown of exports, baht appreciation to 34 to the US dollar, and continued political ambiguity.

Kirida said investors and the public alike are waiting to see indications of a clear direction regarding the policies of the new government, which would have an impact on their confidence.

The bank believes that the new government should step up efforts to address the ambiguity of state policies to restore the investor confidence and increase investment urgently as it sees private investment is a key to the country's economic recovery.

In addition, the government should follow through with the already planned mega-investment projects, clarify the Foreign Business Act amendment, and relax the 30 per cent reserve requirement to restore investor confidence.

It should provide measures to ease the impact of the stronger baht on industry, deregulate investment procedures, liberalise services in some industries, and develop Thai labour skills to maintain competitiveness.

Kirida said Thailand's exports are likely to be negatively affected by the slowdown of the global economy and the economies of trading partners.

The bank projected that exports would grow only 7.2 per cent next year, and that the value of exports in dollar terms next year would be lower than this year due to the stronger baht.

But exports next year are expected to grow 10.5 per cent after experiencing a contraction this year.

It would result in the current account surplus next year reducing to US$5.7 billion or 2.2 per cent of the gross domestic product.

Thailand's economic growth lowest in region, World Bank says

Bangkok Post (16 Nov 2007)

Thailand's economic growth this year was expected to reach 4.3 per cent, the lowest in the region, but prospects for 2008 are brighter if the kingdom can overcome its political uncertainties, the World Bank said Thursday.

The World Bank predicted Thailand's gross domestic product (GDP) would be driven in 2007 by a 14.5-per-cent increase in exports and would expand by 4.6 per cent next year.

"It is likely that Thailand's growth this year, like last, will be the lowest among emerging East Asian countries," the bank said in its latest Thailand economic monitoring report.

Despite a 17.5-per-cent appreciation of the Thai baht against the dollar over the past two years, Thailand's exports would jump in 2007, primarily in high-tech sectors, such as the automotive industry and electronics, the bank said.

Those exports are assembled in Thailand from components imported from other countries. "In that sense, the appreciation of the baht is a blessing because imports are cheaper," said Albert Zeufack, the World Bank's senior economist on South-East Asia.

But labour-intensive, high local-content sectors are suffering. The World Bank predicted a 6.5-per-cent decline in Thailand's garment exports this year, a 21.1-per-cent drop in canned fruit and a 7.9-per-cent drop in furniture.

Thailand has underperformed the Philippines and Indonesia, whose currencies have appreciated 19.5 per cent and 19.4 per cent, respectively, against the dollar over the past two years, primarily because of its political uncertainties.

Foreign direct investment inflows in Thailand declined 40 per cent in the first eight months of this year from the same period of 2006. Although inflows were down, applications for new projects at the Board of Investment almost doubled in the same period.

"The political uncertainty factor seems to be the most important one," said Milan Bramhbhatt, author of the World Bank's East Asia Pacific Update.

Thailand experienced a military coup in September 19, 2006, and has been under an interim military-appointed government since then. A general election is scheduled for December 23 with a new government expected to be in place by February. "Given that exports are going good, once the political questions are resolved, it is possible the economy could experience a sharp snapback and growth could improve quite significantly," Bramhbhatt said. Like most economies in East Asia, Thailand's macroeconomic fundamentals are strong. Thailand's inflation rate in 2007 was estimated at 2.2 per cent, and it was expected to have a trade surplus of 10.7 billion dollars and a current account surplus of 11.8 billion.

Overall, emerging East Asia's economy was expected to grow 8.4 per cent in 2007 and 8.2 per cent in 2008, according to World Bank predictions.

In South-East Asia, the World Bank forecast that Indonesia's economic growth would reach 6.3 per cent in 2007 and 6.4 per cent in 2008, Malaysia 5.7 per cent and 5.9 per cent, the Philippines 6.7 per cent and 6.2 per cent and Vietnam 8.3 and 8.2.

The World Bank expected China's economy to grow 11.3 per cent this year and 10.8 per cent in 2008.

The region has survived the crises of 2007 - including the US subprime mortgage debacle, high oil prices and appreciating currencies - but it faces more downside risks from the same in 2008, Brambhatt said.

"A review of the region's performance in previous global downturns suggest that the impact on East Asia is unlikely to be especially severe or protracted, given the region's strong macroeconomic fundamentals and in the absence of a major downturn in global high-tech demand, such as occurred in 2001," he said.