BANGKOK-Although Thailand is the first country outside Japan to embrace PHS as a low-cost alternative to conventional mobile-phone service, commercial rollout of the system has been delayed until April at the earliest-five months after its scheduled launch.
The operator, TelecomAsia Corp. plc, attributes the delay to technical troubles with the network equipment, which the company said has withered under Thailand’s brutal heat and humidity. TA also had a disagreement with the government over the rates it can charge, according to company director Vallobh Vimolvanich.
“TA could not make sure yet if its network is technically all right,” said one analyst in Bangkok. “So it’s better to wait, rather than launching and getting complaints.”
But while no one disputes Thailand’s climate or the government’s sometimes heavy-handedness, many analysts cite the country’s economic turmoil as the real reason behind the delay in launching PCT (personal cordless telephone), as PHS (personal handyphone system) is called in Thailand. TA is running short of cash, industry insiders say, and once PCT goes beyond the test stage to full commercial launch, TA must start paying its equipment suppliers and installers. The bills total close to Bt10 billion (US$222 million), and TA doesn’t have that kind of money in the till.
TA has delayed PCT’s commercial launch twice: from November to February and then from February to April. Many observers are betting on a third delay.
For the past three years, TA has made tremendous investments in constructing 2.6 million fixed lines. It paid for that investment with loans, most of them secured overseas and denominated in U.S. dollars. TA owes US$822 million in foreign loans and Bt27 billion in domestic debt.
The economic crisis thus hit TA two ways: as the Thai baht sank from Bt26 to the dollar to close to Bt50, TA’s debt nearly doubled in baht terms. While the debt was climbing, revenue was drying up from fixed lines, TA’s major source of income, as businesses closed and consumers stopped dialing.
Several analysts and competitors are predicting that PCT will fail in Thailand because cellular mobile service is becoming more competitively priced, but Vallobh counters that the market’s response has so far been good. He cites the growing popularity of PCT with its initial customer base of 110,000.
To test the market and its network, TA released 74,000 handsets in November to people who signed up for various promotions earlier in the year. The company offered customers free air time, while warning them that with an incomplete network, they were liable to have calls dropped and face holes in the coverage area.
Unlike PHS in Japan, which introduced the service as an independent wireless communications network, TA’s PCT is linked closely with the carrier’s fixed-line network, allowing a subscriber one number for his or her fixed line and PCT handset. In a TA survey, the company determined this is one reason subscribers find PCT attractive.
PCT’s planned tariff structure charges a Bt800 (US$17) entry fee, a Bt200 (US$4.40) monthly fee, and Bt3 (US$0.06) for the first two minutes of a call, with each subsequent minute charged at Bt1.50, based on Bt45 against the dollar.
In contrast, cellular users pay a Bt4,000 (US$89) entry fee, Bt400 (US$9) monthly fee, and a basic call charge of Bt3 (US$.06) per minute.
