Friends in High Places in Thailand
By David James, Tue Feb 20 00:00:00 GMT 2001

A new prime minister of Thailand was sworn into office on February 9, 2001, following a landslide victory which gave his party, the Thai Rak Thai party, twice as many seats in the lower House of Representatives than any of its rivals. What does this mean for the future of the mobile Internet in Thailand?


Thailand is poised for the convergence of wireless and Internet services at the very time that its new Prime Minister, Thaksin Shinawatra, who happens to be the man who developed the country's booming telecommunications industry, is poised to usher in a new convergence of politics and business interests. This sounds like a winning combination for the mobile Internet.

Devotedly Mobile

Thailand has had its political and economic ups and downs during the last decade. In 1991, the pro-business government of Prime Minister Chatichai Choonhavan was thrown out in a coup, and its successor adopted policies that stressed democracy and human rights over the interests of business. As a result, Thailand's economy stagnated and relations with its two authoritarian neighbors, Cambodia and Myanmar (Burma), steadily deteriorated. In 1997, Thailand became the first Asian country to fall victim to the "Asian financial crisis," plunging into economic collapse as a consequence of bad loans and an overvalued currency.

But throughout the past decade one constant stood out: Thailandís people became addicted to mobile phones. In 1992, during bloody riots in Bangkok that followed the change in government, the rest of the world received blow-by-blow reports of the fighting from observers on the scene using mobile phones. Since that time, as Thai transportation systems and services failed to keep pace with economic growth, people came to depend increasingly on mobile communications to stay in touch. The classic mobile communicator was the business executive trapped for hours in a tangle of cross-town Bangkok traffic.

With more and more services now offered on the mobile Internet, Thailand, with a population of 60 million, is expected to show strong growth for Internet-enabled mobile phones. Internet usage itself has grown rapidly in recent years. The number of Internet users grew from one million five years ago to 2.6 million last year, and the number is expected to jump to four million next year and six million by 2002. The number of mobile phone users, currently about three million, is expected to provide a substantial base for the growth of Internet-enabled phones. "Mobile Internet is much more promising than plain Internet," says Thana Thienachariya, vice president of business development at Total Access Communications, Bangkok, an Internet service provider.

Industry sources estimate that at least 70 percent of new mobile handsets sold this year around the world will be Internet-compatible and will offer technologies such as Bluetooth, for wireless connections between digital devices like vending machines and computers, and GPRS (General Packet Radio Service), for wireless network transmission of data at high speeds. Such handsets will be available in Thailand this year. Nokia (Thailand), for instance, plans to launch the first Bluetooth service in Thailand during the first quarter of 2001.

"Thailandís wireless Internet will definitely get off the ground this year, although it will take another few years to educate the market," says Anant Kaewruamvongs, general manager, Internet service, CS Internet, Bangkok. Others say that the future of the mobile Internet in Thailand will depend on consumer education and technological improvements that enhance the mobile Internet experience.

Young people are expected to lead the mobile Internet growth in Thailand, given their interest in online games and entertainment, much as in Japan where NTT DoCoMo's iMode service, with 18 million subscribers, has experienced phenomenal growth. Following an initial spurt of usage by young people, observers say that Thailandís mobile commerce will expand rapidly, with stock trading, banking and other transactions increasingly carried out online.

Mobilizing a Prime Minister

Thailand's new prime minister, Thaksin, can be expected to support development of the mobile Internet in Thailand. He rode the high tech wave of modern telecommunications to become one of Thailand's most successful businessmen. In 1983, he established the Shinawatra Computer Service and Investment Co., Ltd., and in 1986 his company was granted an exclusive 20-year concession to operate mobile telephone services. The company's mobile services were launched in October 1990. Later, the company - now a public corporation named Shin Corporation PLC - expanded into paging, satellite transmission, and various information technology activities.

Moreover, Thaksin is expected to revitalize Thailand's flagging economy. His successful political campaign promised a return to the pro-business policies of the 1980ís, when Thailandís economy boomed, and he is committed to improve trade relations with the countryís neighbors in Indochina and South Asia, especially Myanmar, Cambodia and India. His partyís campaign slogan was "New thinking, new implementation." There is a new emphasis on regional business collaborations. According to Surakiart Sathirathai, the man who is expected to be named Thailand's new foreign minister, "Foreign policy must reflect the countryís need for economic recovery."

Revitalized economic activity will undoubtedly spur the growth of the mobile Internet in Thailand. At the moment, however, Thaksin and his team have their hands full in dealing with overly optimistic campaign promises and a struggling economy. On the promises side, the poor are besieging hospitals to demand the pennies-a-visit health care he promised, farmers have stopped repaying loans due to a three-year moratorium promise, and businesses are eagerly awaiting the creation of a promised Assets Management Corporation that would soak up $12 billion in bad bank loans. On the economic side, the Bank of Thailand recently released figures indicating a marked slowdown in the Thai economy at the end of last year. If this were not enough, Thaksin himself is fighting an indictment of the National Countercorruption Commission, filed during the election campaign, for hiding assets. Thaksin's popularity and the powers of his office will need to hold these problems at bay until economic growth takes hold.

If Thaksin succeeds in restoring a convergence of business and political interests in Thailand, the chances are good that there will be a rapid convergence of mobile phones and the Internet as well. After all, it pays to have friends in high places.

David James is president of Business Strategies International, a San Francisco-based consulting and venture-development firm specializing in Asia-Pacific business opportunities.