Broadband to safeguard growth

PETE BODHARAMIK

By SRISAMORN PHOOSUPHANUSORN

TT&T Plc, the provincial fixed-line telephone provider, is one Thai telecommunications company vowing to continue to grow in 2009, regardless of the global downturn and Thailand's unstable political environment.

Telecoms companies are partly sheltered from the current financial crisis by the fundamental advantage of providing the public with a basic service.

Pete Bodharamik, the chief executive of TT&T's parent Jasmine International, said the group was relatively unscathed by the global economic crisis this year, despite an increase in unemployment, which could trigger a rapid deterioration in consumer demand.

"We still believe we will continue to grow about 30-40% in terms of revenue next year, fuelled mainly by broadband internet services,'' he said.

Unlike the 1997 crisis, the current crisis was unlikely to have a direct impact on TT&T or the Jasmine Group, thanks to a low debt burden and strong net cash in hand of three billion baht, said Mr Pete.

Jasmine now has three billion in debts, compared with 15 billion baht in 1997. TT&T's debt is 21 billion baht, while it owed 44 billion during the last crisis, during which it laid off over 1,000 employees and suspending investment.

Mr Pete described the overall picture and the current corporate situation as substantially different from the 1997 crisis, which caught the company by surprise.

"This time around we saw it coming. We had time to handle the challenges and reduce risks,'' he said.

In 1997, the baht's devaluation caused a sudden shock with huge debts.

"Now, we have much more readiness than in the past in our business model and corporate structure,'' he said.

"We have no policy to cut our broadband investment of one billion baht next year and no plan to lay off employees.''

Mr Pete said TT&T intended to follow the success of its broadband strategy in 2009 by focusing more on modernising the MaxNet brand image to increase value and enhance brand recognition.

Broadband network expansion would be in high-usage provinces: Chon Buri (including Pattaya and Si Racha), Phuket and Chiang Mai.

The company also plans to expand into broadband-related businesses and mobile content applications next year to capitalise on growing mobile data communications demand.

Mr Pete said there are always opportunities in any crisis. Growing numbers of unemployed people could increase demand for internet access for online job hunting, he said.

TT&T forecasts that its broadband subscribers will reach 670,000 next year, generating half of total revenue.

It expects to have 400,000 broadband customers by the end of this year, contributing almost 40% of its total earnings, he said.

Its 2009 revenue is projected at seven billion baht, with net profit of 800 million, fuelled by new facets of super high-speed broadband service and mobile content and applications, Mr Pete said.

He acknowledged that 2009 would be the year of risk management for telecoms companies as they cope with the unique challenges of the transition to third-generation (3G) technology. Jasmine no longer aimed to diversify into non-core businesses including TT&T's 3G mobile investment plan, as it could not compete or make the high investment required.