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   BUSINESS NEWS

HEADLINES [click on headline to view story]:
Internet services growing rapidly in provinces

Thai-owned car companies to restructure after takeovers

CAT board scraps Baht 1.2-billion CDMA equipment purchasing bid

House committee plans casinos

Controversial ISP gets license at last

Banking: No more redundancy in 2000

Major express mail players expanding in Thailand

Retail company to launch local home shipping channel

Army Chief tells investors military to withdraw from TMB

Internet services growing rapidly in provinces

The Internet cafe business not only experienced growth in Bangkok, but also mushroomed in the provinces over the past few months after service providers expanded upcountry. There are now over 100 Internet shops in the northeast, in the northern tourist resort city of Chiang Mai and Nakorn Ratchasima, where there are universities and colleges.

It is not the time for extravagant Internet cafes, but it is the turn of small Internet shops which offer speedier connections and lower prices, as low as Baht 15 per hour. A shop owner in Nakorn Ratchasima said there are 40 Internet service shops in the city, with students and school children being the main customers. Faster service and low prices will be the edge in competition, he said.

Internet service shops have opened in Chonburi in the east, Pitsanulok in the north, and Pattanee and Haad Yai in the south.

There was only one Internet shop in Chiang Mai two years ago, but there are currently more than 70 shops, mainly in areas around the universities and colleges - some even charge as low as Baht 5 per hour.

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Thai-owned car companies to restructure after take overs

Several Thai companies that were formerly involved in auto sales in the domestic market will have to adjust after their businesses were taken over by Japanese or Korean partners. The KPN group, which lost its majority ownership in Siam Yamaha Co. to Japan’s Yamaha Motor Co. last year, said it had to be more on its own.

Yamaha Motors spent Baht 500 million to bail out Siam Yamaha from a financial crisis after KPN became heavily in debt. A KPN source said the new business structure of the group is expected to be announced by the end of October. For instance, KPN subsidiaries that currently supply motorcycle parts to Siam Yamaha would have to find more customers, said one source.

Siam Yamaha used to be KPN’s largest source of income. Siam Yamaha sold 50,510 Yamaha motorcycles in the first nine months this year, or 12% of the overall market which sold a total of 412,580 units in all.

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CAT board scraps Baht 1.2-billion CDMA equipment purchasing bid

The Communications Authority of Thailand will have to scrap the results of the bidding last March after the CAT board resolved in a meeting on Tuesday (October 26) that the bidding was ‘inappropriately’ conducted. CAT is expected to announce the resolutions later, and will renew the bidding criteria, CAT sources said.

The board of directors said that the bidding process to purchase communications equipment in the code division multiple access system for telecommunications base station in the provinces, must be approved by the cabinet first. A total of six Thai and foreign firms bid for the Baht 1.2-billion project, but the bidding results have been delayed for several months.

Mit Siam International, which uses hardware from Japan’s NEC Corp, proposed the lowest price. However, the equipment from Lucent Technologies was approved by the selection committee and Lucent Technologies Network (Thailand), the bidder, was picked up as the sole candidate.

However, the board said CAT was not authorized to hold the bidding.

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House committee plans casinos

Instead of dissuading Thai folks from going abroad for gambling, the Tourism Committee of the House of Representatives is planning to encourage them to stay and enjoy gambling at major tourist destinations. Findings show that each month, tens of thousands of Thais cross the border to patronize casinos in Cambodia, Burma, and Laos.

There are currently eight casinos along the Cambodian-Thai border, three more along the Burmese-Thai border, and three others in Laos.

Santsak Ngarmpichet, Chonburi’s representative who chairs the Tourism Committee, said that the government should legalize gambling, and introduce and enforce special laws to control the business in order to promote the tourism industry. “Casinos can be major tourist attractions in Phuket, Pattaya, and Haad Yai,” Santsak said.

He also said that there must be rules to limit access to casinos, and only those with Baht 100,000 or more should be admitted to such places.

Even Islam dominant Malaysia have legalized casinos.

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Controversial ISP gets license at last

EZ Net Co. gained ground last week in its attempt to set up its Internet Service Provider business, overcoming many hurdles, doubts, and speculations. But its name has been changed to Hygienic Co., a joint venture with the Communications Authority of Thailand, said Srisuk Chantrangsu, chairman of CAT board. CAT will hold a 32% share in the new venture, at Baht 4.8 million, Srisuk said.

Hygienic Co. will stick to its policy as being the Internet service provider for education with the lowest possible charging rate, a course which was set by EZ Net, said Chaisingh Narula, managing director.

Cherdchai Jearvanont, a local IT trader and distributor of computer software for education, also became a new shareholder, Chaisingh said.

EZ Net has vowed to collect only Baht 5 per day from school children and students, with unlimited access to Cyber space, provided that the use is strictly for educational purposes.

The company maintains that it had won support from the US telecom giant TT&T in connecting to international gateways at a very low price.

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Banking: No more redundancy in 2000

The three largest commercial banks in Thailand - Bangkok Bank, Thai Farmers Bank, and Siam Commercial Bank - have no plan to further reduce their workforce in 2000, for fear that they would not have enough manpower to compete in the new environment brought about by the economic recovery. More than 10,000 employees, including some top executives, have left the three banks in redundancy programs since 1996.

Tohsak Chongsakul, manager of banking affairs of Bangkok Bank Plc, said 5,000 BBL employees had joined four redundancy programs since 1996. There are about 20,000 employees currently working for the bank. Between 700-800 employees applied for early retirement compensation packages in the latest redundancy drive which lasted until the end of October, Tohsak said.

Thai Farmers Bank launched 2 early retirement programs in 1997 and in 1999, which attracted about 1,750 retirees, but TFB said there will be no more layoffs. TFB’s has introduced a policy to recruit no more employees over the next 5 years.

There are currently 10,557 employees at Siam Commercial Bank and the number is considered appropriate.

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Major express mail players expanding in Thailand

Three major express mail service firms - Federal Express, TNT, and DHL - have been expanding in the Kingdom and have further development plans to improve their services, and to inch into Indochina. Rick Jennings, managing director of Federal Express, said FedEx has invested a large amount to install an advanced information technology system to electronically keep track of deliveries in real-time throughout their operations worldwide.

FedEx said it would further expand its operations into the Indochinese countries of Laos, Vietnam and Cambodia.

The Amsterdam-based TNT, meanwhile, said its services have been available on the Internet since the middle of this year. Delivery of about 70% of the categories currently in service will be processed via the Net over the next three years, James Oden, managing director said. The number of Net surfers in Thailand, which is currently around 900,000, still has the opportunity to grow, he said.

DHL, which was the world’s first in the industry, recently launched a time guaranteed delivery service aim at serving the growing exports in the Kingdom. DHL earlier said it would invest about Baht 1.2 billion more in creating a one-stop service center here.

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Retail company to launch local home shopping channel

Net Tech Marketing Co. has entered distribution deals with about 100 suppliers and producers to bring products to a new home shopping channel on Universal Broadcasting Co. cable TV network. The new service will sell more than 1,000 items, mainly household products, directly to customers.

Net Tech Marketing was meanwhile preparing to go e-commerce, bringing direct selling to the Net, to tap into the Internet boom in the Kingdom. The company has had an agreement with UBC cable TV to use its channel 10 for 3 years for commercial purposes, said Songdej Tansurat, managing director.

Home shopping on TV has recently experienced rapid growth. The service will help producers and suppliers save millions of baht a year as they will need to spend less to advertise and promote the products.

The service will collect 25% to 30% from suppliers in GP charges.

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Army Chief talls investors military to withdraw from TMB

The Army Command-in-Chief, General Surayuth Chulanont told international investors that the Thai military, which currently owns the majority of Thai Military Bank, will totally withdraw from the bank. The general’s meetings with international investors have been the prelude to the bank’s plan to sell capital increase shares early next year.

According to TMB sources, the Army Chief, who is on road shows to London, Singapore, and Hong Kong, has also told prospective investors the bank’s plan to apply for assistance from the government’s Tier 1 fund, a plan which impresses investors. Foreign investors knew very little about TMB and the military’s role has been doubted, said TMB sources.

TMB plans to sell 70% of the capital increase shares to foreign investors and another 30% to local investors. The bank has adequate funds in the loan provision to meet with the International Banking Standards. The first attempts to sell shares last month failed due to negative factors in the international market.

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Updated by Boosiri Suansuk