Year 2009

 July

Thaicom unveils 'do-or-die' plan

B10bn earmarked for diversification

By: SRISAMORN PHOOSUPHANUSORN

Thaicom Plc, the country's sole satellite-service provider, plans to diversify into digital media and broadcasting services with a possible investment budget of up to 10 billion baht.

The strategy, a "do-or-die" approach as Thaicom calls it, aims to reduce its heavy reliance on the non-profitable satellite business and to seek new lucrative business opportunities, said Arak Chonlatanon, the company's newly appointed chief executive.

Mr Arak, who succeeded Dumrong Kasemset, said the company's board was studying the feasibility of investing in media and broadcasting, with a final decision to be made next year.

"We need to diversify into money-making businesses to create new revenue sources and support our subsidiaries' businesses: CS LoxInfo's broadband internet and Shenington's telecom services in Cambodia and Laos," said Mr Arak, 59, who has worked with the parent Shin Group for 17 years.

However, he said, jumping into new businesses would hinge on the results of feasibility studies, which would outline in depth the factors needed for commercial viability.

Thaicom has also conducted a feasibility study into the potential acquisition of a sixth satellite to provide services.

"We're open to all viable options - whether purchasing or renting a new one," Mr Arak said.

But he said Thaicom would decide to purchase a new satellite if the government agreed to lower concession fees, extends the concession term beyond the existing 30 years and scraps the rule requiring it to have a backup satellite. "If the three conditions remain unfavourable, we'll scrap the purchase option," he said.

Mr Arak urged the Information and Communication Technology Ministry (ICT) to approve its rental of a satellite to replace the Thaicom 1, whose service life has ended.

Thaicom has already been in talks with a few satellite operators in Asia to rent a satellite for two to three years to provide services for its Thaicom 1 customers.

"If we cannot get the approval from the ministry by early 2010, our business will be greatly affected by the delay in terms of revenue and customers," he said.

"The government, meanwhile, will also be affected by a smaller share of the revenue."

Mr Arak said Thaicom was implementing a business restructuring plan to focus on more specific service segments. The company has grouped its satellite commercial services into two segments: conventional broadcast services for its Thaicom 1, 2 and 5, and broadband and internet protocol services served by the iPSTAR broadband satellite.

"It's time now for us to assign a separate management team to each country and service, as part of our do-or-die strategy," he said.

Mr Arak said Thaicom could not turn a profit this year due to delays in sales and marketing operations of the iPSTAR - its sole hope of returning to the black.

Mr Arak also said he welcomed the liberalisation of the local satellite market, but it should be opened to just Thai companies. "We aren't afraid of the competition. Thaicom has a competitive edge in terms of knowledge, specialists and a strong customer base."

He has set a goal for Thaicom to break even next year and resume paying dividends to investors after a five-year break.

Another objective over his one-year leadership is to upgrade the company's image to be free of political ties and position its satellites as a national asset.

This article is written by Bangkok Post

8/07/2009

Back