May 16, 2000 Article on the Thai Telecommunications Industry mentioning Telecom Asia as part of analysis--
TAC clinches Telenor tie-up,
The Nation (Thailand)
by Usanee Mongkolporn; 05-16-2000
The tieup between Telenor AS and Total Access Communication Plc (TAC)will lead to fiercer competition in the Thai telecoms market before full deregulation in 2006 since all leading operators are now on an equal footing.
Yesterday, Telenor, a leading telecom, information technology and media company based in Norway, said it would enter into a strategic alliance with TAC, the second biggest local mobilephone operator.
The deal - worth about US$720 million, including investment in TAC as well as its parent United Communication Industry Plc - makes TAC the first
local major telecom to hook up with a European partner and the last to find a foreign partner.
A telecom analyst pointed out that for a local operator it is a must to forge a partnership with a foreign telecom that can leverage its successful experience accrued in a highly competitive and advanced market to benefit
the Thai partner.
For example, USbased Bell Atlantic has helped its metropolitan phone company partner, TelecomAsia Corporation Plc, to improve its management and marketing strategy.
"The extensive experience of Bell Atlantic in a fiercely competitive market such as the US is very valuable for TelecomAsia," the analyst said.
He added that like Bell Atlantic, Telenor would optimally parlay its successful strategies in the European market to enhance TAC's operation.
"When all local telecoms team up with overseas partners, they'll be on a level playing field. Unlike earlier, there'll be no big competitive gaps among them. This will definitely prompt an intense battle before full market liberalisation in 2006," the analyst said.
Advance Info Service (AIS), the biggest local mobilephone operator, took Singapore Telecommunications (SingTel) as its partner.
Digital Phone Company (DPC), which was recently taken over by Shin Corporations Plc, the largest telecom company and a parent company of AIS, teamed up with Telekom Malaysia.
Two telecom companies are left without a foreign strategic partner. Ailing provincial telephone company, Thai Telephone & Telecommunications Plc, is still undergoing its debtrestructuring process.
The other telecom is 1800MHz wireless operator Bangkok Telecom Holding, formerly known as Wireless Communications Service.
Bangkok Telecom is a newly acquired subsidiary of Chareon Pokphand,one of the country's largest conglomerates and a parent company of TelecomAsia.
However, the analyst questioned the potential of SingTel to forge tenable strategies in a free market, compared with stateowned Telenor. SingTel had enjoyed a long monopoly in Singapore before being exposed to
real competition in the past two years.
"It's doubtful how much the company can contribute to AIS in the new landscape with Telenor coming on the scene," the analyst said.
So far AIS, with 1.3 million subscribers, has secured a share of about 50 per cent share of the cellular market, while TAC has 45 per cent with 1.1 million subscribers. But the halcyon days of AIS are likely to fade
away if it moves clumsily to safeguard its slice of the pie.
But Boonklee Plangsiri, chairman of Shin Corps, looks optimistically at the advent of foreign players taking stakes in his business rivals, saying they would help Thai telecom operators to whittle away their debts.
"From an overall perspective, it is more of a boon than a bust for the telecom industry and Thailand as a whole. The overseas partners will indirectly help Thailand bring down the gigantic amount of nonperforming loans," Boonklee said.
He remarked that telecoms would inevitably follow the same path as the banking industry by opening their doors to newcomers.
"When all telecom operators have secured a foreign partner, this would mark the real beginning of deregulation when an operator from every country can participate in the domestic market directly or indirectly," Boonklee
said.
But no matter who comes in, he pointed out, it is the local telecom operators that will determine their own fate and the direction of the market.
"What the foreign partners will do is inject money and bring in technology support. But where we will go depends on our own decisions," Boonklee said.
WORLDSOURCES ONLINE, INC., A JOINT VENTURE OF FDCH, INC. AND WORLD TIMES,INC. NO PORTION OF MATERIALS CONTAINED HEREIN MAY BE USED IN ANY MEDIA WITHOUT ATTRIBUTION TO WORLDSOURCES ONLINE, INC. |
