InTouch ready for 3G transition
Somprasong Boonyachai, chairman of the executive committee of Shin Corporation Plc, known as InTouch Group, gives his point of view over the transition of the country's telecommunications industry into the 3G technology era and what strategies the operato
What is your point of view on the Thai telecom sector’s future after the arrival of faster 3G mobile phone technology?
The telecom business will definitely change in the next three years from 2013 through 2014 and 2015. There will be a new chapter of competition in the sector. This would make operators speed up their network installation. After 3G-network service opens, modernity and new services are required to satisfy customers, who have a long experience in telecom services, as we can see an activated mobile-phone number level which is about 100 per cent of population.
As for the group, we have integrated 4 factors – telecom, media, IT and digital content – to serve consumers via smart devices with upgraded consumption by adding efficiency, convenience and entertainment.
With a faster speed by 10 times, the services will be transformed into digital and transported on the network. The services will have multiple dimensions and be more sophisticated. Hard sales like selling a kilobyte of transporting non-voice data per unit will reduce, while there will be more contents. There will be more competition. The life cycle of services will be shorter. There will be new kind of peripherals, with upgrading of consumption in both the business and public sector. For example, remote healthcare treatment in which the doctors can communicate with clients by using IT software via the network and give them any treatment. The clients do not have to come to see the doctors.
How has the group prepared its business strategy to cope with higher competition?
We have four listed companies [Advance Info Service (AIS), Shin Corp (Intuch), Thaicom and CS Loxifo] with five projects – called "five breakthroughs to break barriers" – in a bid to step forward into a new chapter. The barriers are regulatory, technology and consumer behaviour. The five breakthroughs are 3G network installation, the launch of the sixth satellite this year, software development, the establishment of venture capital and digital television.
As the new 3G network will stretch the operation life by up to 20 years with a wide range of service integration for the first time, we have set up two teams, a day-to-day operation team and a strategic thinking group, in a bid to understand and catch up with consumers’ lifestyles.
How much do you expect to invest this year?
The 3G network installation is about Bt70 billion while the launch of the new satellite is US$160 million or Bt4.8 billion. The establishment of venture capital will cost Bt200 million initially. Cloud computing development is expected to require a few of million in investment. Digital TV is expected to require investment of around Bt2 billion. We are now in the transition stage, in which we will have to determine the scope of telecom, media, IT and digital content clearly.
Is the Intouch Group ready to deal with the coming of the Asean Economic Community’s single market in 2015?
Now, we are beyond others in terms of being an international firm, as both services and clients involving foreigners. We are upgrading our services in response to a larger number of foreign clients.
What is Intouch Group’s revenue breakdown?
About 90 per cent of the group’s total revenue is contributed by AIS. However, this proportion could reduce to 70-80 per cent in the next five years.
Unloading Intouch shares of Singapore-based Temasek Holdings via its subsidiary; what is this about?
It’s common that the investor may take profit when having gains.
As the group needs capital expenditures for many new projects, does it still have a 100-per-cent dividend payout-ratio policy?
Yes, Intuch still retains its policy to pay out dividend at 100 per cent of the net profit.
Where are the group’s resources from?
We have no need to use the capital mechanism to raise funds, as we have an ability to raise all funds via the debt market. We prefer the debt market, which is predictable and stable. Debt-to-equity ratio is also very low.
Are you interested in business expansion in the region?
[We are interested in] Myanmar. Previously, we submitted to the Myanmar government expression of interest letters, showing interest in the telecom business. We plan to assign AIS to handle the telecom business over there. Now, we have received a return of the letters. It might be clearer what kind of business we can operate.
What kind of digital TV is of interest to the group?
We are interested in general and kids’ channels.
