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November 6, 1998
partners look to
New venture to market mobile phone
Srisamorn Phoosuphanusorn and Nondhanada
Thai Satellite Communication Plc (TSC) and two Japanese partners
have formed a new company to provide the Iridium mobile phone
service in Southeast Asia, Australia, New Zealand and the Pacific
TSC, the Thai partner in the Iridium global mobile-phone project, will
hold 50% of the shares in the new company, Iridium Southeast Asia
Co (Isea). Kyocera Corp and DDI Corp will jointly hold the other
The Communications Authority of Thailand will be paid a fee for
Although TSC was a partner in the Iridium global project, launched
last Sunday, it would no longer be in charge of providing services,
president Piyabutra Vasudhara said yesterday.
TSC would become a holding company for Isea and focus on finding
more satellite-based telecommunications business, said Mr Piyabutra,
who is also chief executive of Isea.
The Japanese partners have jointly invested US$50 million in Isea,
which has registered capital of 1.7 billion baht.
"Although TSC and Japanese partners hold equal shares, Thai
executives still have most authority in management," he said.
Kyocera and DDI would strengthen TSC's finances and management,
as well as its plans for a capital increase. All the Japanese funds had
been spent on equipment, promotions and staff.
The company planned to raise between $30 million and $50 million
within two years to increase its stock of switching equipment, currently
"It depends on how the service takes off. If we are doing well enough,
we might not need more funds,"
Isea aims to sell 15,000 handsets in Thailand, with the first 2,000 due
to arrive next week. Bookings opened a few weeks ago and it has
already received 800. Singapore and Malaysia will each receive 1,000
"Most orders were from people working in remote areas, our primary
customers," Mr Piyabutra said.
Iridium handsets are priced at 170,000 baht each for single-mode
type. Dual-mode units are expected to be available by year-end at
200,000 each. The monthly service fee is 2,250 baht, plus a 1,600
baht activation fee.
Local calls are 90 baht a minute, calls within Southeast Asia 200 baht,
and other countries 250 baht.
Tsuneyoshi Narahara, senior managing director of DDI and director of
Isea, said his company had joined Iridium because Asia was the key
region for the services and Thailand was the most interesting prospect.
Masahiro Umemura, senior managing director of Kyocera Corp and
director for Isea, said mutual respect and trust of TSC was the key
factor for his company.
Kyocera, a telecommunications equipment manufacturer, was founded
by Kazuo Inamori in 1959. It reported total sales last year worth $5.7
Dr Inamori also founded DDI Corp in 1984 with initial registered
capital of $558 million. The company is a major player in cellular
communications and Japan's PHS service - a type of mobile phone
service with some limitations on usage range, as well as the Iridium
system. DDI's sales last year totalled $8.1 billion last year.
TSC, a subsidiary of the United Communications Industry (Ucom)
group, was founded in 1992 with registered capital of $50 million.
Ucom has a 40% stake in TSC.
Meanwhile, Ovum, an independent group of telecommunications
analysts, has pointed to a gradually shrinking window of opportunity
for Iridium and operators of similar services.
Ovum, based in Melbourne, says that key target markets, such as
international business travellers, will be able to choose from a growing
number of global communications options by 2004.
Key events moving against Iridium, which Ovum pointed out include:
The introduction of WorldPhone from the end of 1999. This will
enable mobile subscribers to roam between GSM, AMPS and
D-AMPS digital networks. This technology covers more than 80% of
the mobile subscriber population.
The continued emergence of cellular networks. For example,
coverage of GSM networks in the US is currently limited to some
urban areas. However, the continued build-out of these networks
(licences that are committed to GSM cover more than 90% of the US
population) in the next few years will reduce Iridium's potential market.
The introduction of Third Generation (3G) technology from 2002
© Copyright The Post Publishing Public Co., Ltd. 1998
Last Modified: Fri, Nov 6, 1998
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