TrueMove plays the race card in revenge against DTAC

[dtaai-maai]

I personally think 51/49% ownership law is extremely anti-competitive and unfair.
I think it also discourages a lot of foreign companies from investing and doing business in Thailand.

Surely that's what it's supposed to do, as daft as it may seem?

[Super Joe]

DTAC did NOT set up this way, apparently. Let's just use some hypothetical numbers here. There are 100 shares of DTAC on the market. Foreign company buys 49 shares. Foreign company sets up a holding McDonald's style above, and that company owns 51 DTAC shares. While Foreign Company would in reality control ALL DTAC shares, legally they could be said to own 73.99 shares (49 shares plus .49 x 51 shares) which would be in violation of the law.

Thanks for the clarification and correction bcr, I understand the structure now

I personally think 51/49% ownership law is extremely anti-competitive and unfair. I think it also discourages a lot of foreign companies from investing and doing business in Thailand.

Surely that's what it's supposed to do, as daft as it may seem?

Exactly, the Foreign Business Act was specifically introduced to limit foreign businesses and lists them giving the reasons why ... 'protect national security/safety', 'preserve natural resources/culture/environment', & 'where Thai people are not yet competitive with foreign businesses'. So maybe unfair on the people the laws were not introduced to protect, foreign companies, but fair on the people they were introduced to protect. This is no surprise suddenely sprung on Dtac, they intentionally formed a company using loopholes or irregularities incorporating 150no. shareholding companies.

Western 1st world countries unfairly protect their industries still, US & French farmers spring to mind, so it's only natural developing countries need to, if not you'll have Middle East agri-giants buying up half of Isaan (as they're trying to) in order to control food supplies, export profits and the future generations of farming communities will be stuffed. Hard to argue with their policy when their economy is so strong compared to most of the West's, and when you look at Thailand's economic transformation in the 80's, bearing in mind the FBA (ABA then) was introduce in the 70's.

Any perception that Thailand does not welcome foreign investment, relative to it being a developing nation, is wrong imo, over half the business catagories in the FBA are open to foreign companies if they meet the critieria and apply for a license, and they approve 80% of the applications they receive I just read. They attract 20% of the total direct foreign investment of all the ASEAN nations, 2nd behind power house Singapore, and they receive 430% more than Malaysia. And even more surprisingly Thailand is 19th out of 184 on the World Bank's 'Ease of Doing Business' index, ahead of France, Holland, Germany, Spain, Italy, and most local Asian neighbours, (fwiw, and it's probably nwaw really )

SJ

[Pleng]

This Xenophobic Attitude had also prevented Disney Theme Park to set up shop in Thailand (within Pattaya Area) around 1999 or so but Thai lawmakers got greedy and demanded $50 Million Dollars in Backhanders and additional $50 to 100 Millions Dollars for smooth building permits. etc. Disney crossed Thailand off their shortlist opting for Hong Kong instead.

It that isn't proof in itself that these laws work, then I don't know what is! Like Thailand needs a Disney theme park!

[Name Taken]

This Xenophobic Attitude had also prevented Disney Theme Park to set up shop in Thailand (within Pattaya Area) around 1999 or so but Thai lawmakers got greedy and demanded $50 Million Dollars in Backhanders and additional $50 to 100 Millions Dollars for smooth building permits. etc. Disney crossed Thailand off their shortlist opting for Hong Kong instead.

It that isn't proof in itself that these laws work, then I don't know what is! Like Thailand needs a Disney theme park!

Yeah! Thailand doesn't need foreigners or their money. Shame on them for trying to invest in Thailand!

[Korkenzieher]

SJ

Any perception that Thailand does not welcome foreign investment, relative to it being a developing nation, is wrong imo

Unfortunately, the protectionist attitudes (that are undeniably there) will be their un-doing. Vietnam will eat their lunch, because they will impose fewer conditions on investment. As a result of geopolitics, Thailand has had 35 years 'first-mover' advantage in South East Asia, and in real terms has achieved f*ck all! They will be overtaken in a heart beat. And if it isn't Vietnam that does it, it will be Malaysia, or Indonesia, or the Philippines or, or, or...

That isn't necessary, and might not happen. But it will take a major de-regulation in the Thai economy to prevent it. Because the others are basically saying, in simple terms, 'what do we need to do to take this business off Thailand'.

[PeteC]

Going back to the late 80's and early 90's there were 5 Southeast Asian economic tigers in the news all the time. I think they were Thailand, Vietnam, Malaysia, Singapore and Indonesia. Thailand was so far ahead of the others in those days it was a given that they would be rated as a fully developed country by the early 21st century. What happened to derail all of that we read about everyday and talk about on here. Pete

[charlesh]

Unfortunately while others have grasped the opportunities the Thais in their "wisdom" have been a little more reticent. Prcscct you are correct. Malaysia and Singapore have gone ahead in leaps in bounds if you use wealth, standard of living as KPI's. Mark my words both Cambodia and Vietnam will overtake LOS within 20 years and it serves them right for their intransigence.

[sjpthsuk]

The way Thailand is going i don't think it'll take 20yrs...each day/week/month....they take backward steps.

[Korkenzieher]

I spent a little time in Vietnam, and the rate of infrastructure outbuild - one of Thailand's major weaknesses - is awsome. The Vietnamese will have the Thais for lunch. It is only a matter of time.

[The understudy]

SJ

Any perception that Thailand does not welcome foreign investment, relative to it being a developing nation, is wrong imo

Unfortunately, the protectionist attitudes (that are undeniably there) will be their un-doing. Vietnam will eat their lunch, because they will impose fewer conditions on investment. As a result of geopolitics, Thailand has had 35 years 'first-mover' advantage in South East Asia, and in real terms has achieved f*ck all! They will be overtaken in a heart beat. And if it isn't Vietnam that does it, it will be Malaysia, or Indonesia, or the Philippines or, or, or...

That isn't necessary, and might not happen. But it will take a major de-regulation in the Thai economy to prevent it. Because the others are basically saying, in simple terms, 'what do we need to do to take this business off Thailand'.

Korkenzieher I can fully agree with you!

I've been talking to Vietnamese friends & people in Berlin, Germany and they had told me the same thing what you mentioned above. I do listen to them and understand the internal struggles Thailand face.
But then there are a few Thais that I know simply brush off this totally BS and told me Thailand will never be overtaken by any of it's neighbors and than accuse me of being unpatriotic...
Back to topic:
The verdict of the findings if DTAC broke foreign ownership law will be announced on 12th. July but initial infos leaked say they are guilty and the casse should be deferred to the Police!
We will see in 6 days what the real ramafications will be for DTAC and it's parent/partner Telenor an affiliate of Vodafone!
The worse case scenario I can imagine is There Mobile Ops license will be removed and their are prevented to operrate.
The subcribers to DTAC would be deferred to AIS and True Move in a 40/60 ratio. As a result DTAC is taking thai Govt. to court. = Thailand loose business credibility big time!

Your'S The understudy!!!

[Spitfire]

If they do a 'Carlsberg' style job on DTAC then it's also an infrastructure grab too, but also have to remember that they'll probably put thousands of Thais out of a job and True/Ais will not be able to give jobs to them all.

However, that is probably on the list of 'Don't give a fcuk about'.

The surrounding countries are already taking massive business off Thailand and Thailand appears to be pretty ambivalent about it all. Also, with the high baht then companies will slowly start to no longer consider Thailand as a good place to set up factories, especially if PT raise the minimum wage by a so-and-so %, that will just result in trimming workforces and business closure here.

If I was a medium sized business owner with a few million $US to invest then I'd be looking at Indonesia (or maybe Vietnam) instead of Thailand. Indonesia came out top of a BBC world-wide report on the easiest and hardest places to start a business recently, think Russia came last or very close too.

The other surrounding countries are getting better at taking business off Thailand every day and will continue to attempt to do so.

The Thai's arrogance regarding many things will also contribute to their undoing too, which ironically, is a trait they are often accused of harbouring/being synonymous with by their neighbours.

[Super Joe]

Going back to the late 80's and early 90's there were 5 Southeast Asian economic tigers in the news all the time. I think they were Thailand, Vietnam, Malaysia, Singapore and Indonesia. Thailand was so far ahead of the others in those days it was a given that they would be rated as a fully developed country by the early 21st century. What happened to derail all of that we read about everyday and talk about on here.

Unfortunately while others have grasped the opportunities the Thais in their "wisdom" have been a little more reticent. Prcscct you are correct. Malaysia and Singapore have gone ahead in leaps in bounds if you use wealth, standard of living as KPI's.

I'm sorry chaps but you're both way way off course if you think Thailand was an original Tiger economy competing with Singapore. Thailand and Singapore are not comparisons to be made. With regards to the business restrictions/direct foreign investment side of things, Thailand has been ahead of it's main competitors like Malaysia, Indonesia, Vietnam, Philippines, for the past 30 years or so.

Unfortunately, the protectionist attitudes (that are undeniably there) will be their un-doing. Vietnam will eat their lunch, because they will impose fewer conditions on investment. As a result of geopolitics, Thailand has had 35 years 'first-mover' advantage in South East Asia, and in real terms has achieved f*ck all! They will be overtaken in a heart beat. And if it isn't Vietnam that does it, it will be Malaysia, or Indonesia, or the Philippines or, or, or...

There's 15 million ex-rural poor who might disagree with what's been achieved
Have you read Vietnam's, Malaysia's, Indonesia's, Philippines FBA's, they make Thailand's look like a season ticket book. The xenephobic, racist and biased nature of them makes it easy to see why the index's say Thailand is 12th easiest place to do business compared with Vietnam's 172nd out of 184th, and why the country has always managed to attract the lion's share of investment. I know what you're saying, and there's certain restrictions I'd love to see lifted, but at the end of the day I understand how it has played a vital part in their rapid growth from the 70's-90's, and how it still does to be honest. It's helped reduce the rural poor from 57% to 10%, it's helping keep manpower costs down and therefore more people employed and earning for their families (this principally the 17 million farmers). And I see how it's helped them better survive recessions.

The more I understand it, the more I have to accept it's the best policy right now, the beauty of it -- unlike some of it's rivals versions I was reading last night -- is that it's totally flexible for the government, if they want some foreign world leaders in agriculture technology and methods, then they entice some in through the loophole which is exactly what we have. Don't hear them being tossed out do we. If they want some telecomms expertise, look at Dtac, and they don't have to open the floodgates. Anyone under the impression Thailand shut-up shop some time ago and shut FDI (Foreign Direct Investment) out think again, Thailand has been welcoming foreign investors for over 30 years, at a higher rate than their four main competitors (Malay, Indo, Viet & Phils), have received the largest slice of the total, 33% (US$100 billion). And 2009, Thailand was the 5th largest recipientn the whole of Asia, behind only China, Hong Kong, India & Singapore...

Some relevant text here about the use of FDI...

The late 1970s and early 1980s saw continued interest in export industries, in particular on the FDI front, in 1977 a new Investment Promotion Law was passed which provided the BOI with more power to provide incentives to priority areas and remove obstacles faced by private investors. By the early 1980s, policy makers had become aware of the inefficiencies fostered by high protection. In the late 1980s and early 1990s, therefore, they started to promote openness and competitiveness. FDI inflows into Thailand increased substantially in the second half of the 1980’s, averaging US$ 0.9 billion per annum, accounting for around 7% of private business investment.

Thailand was successful in shifting resources from traditional agriculture to labor-intensive manufacturing, vast amounts of FDI helped fuel the Thailand economic miracle. Before the economic crisis in 1997, Thailand’s economic development was considered as a continuous success with an average economic growth rate of nearly 8% p.a. from 1960-1996, despite the world recession of the mid-1980’s. This rapid growth, driven largely by growing FDI inflows and exports.

Go Malaysia...

SJ

[The understudy]

Hi guys this news is almost a day old but it shows development in the True Move vs. DTAC foreign ownership saga.
From today's Bangkok Post
http://www.bangkokpost.com/business/tel ... sists-true

And here's another view of the supposed shareholding structure of DTAC supplied by a source of True Move!
[imghttp://www.bangkokpost.com/media/content/20110707/285910.jpg][/img] does anyone understand this diagram.

What I also like is the Statement by Opinion poster Renassance which reads as follows:
True Move is obviously trying to reduce competition. If it succeeds, will it reduce its prices or raise them, I wonder. I wonder if this witchhunt will be good for the customer.
To be as frank as one could be. we have in Thailand three major players in the mobile phone biz net with some kind of juvenile (no real competition cause all the pre and post paid prices packages are identical with no major differences) Competition level going on between all three of them.
If True succeeds and DTAC license is reworked & they can't operate no more than we have a dualopoly where only 2 players battle it out, if it brings any advantages to us customers...
The general rule is the more companies there are in a competition down the prices of services.
The less companies there are in a competition the higher the prices.
You be the Judge please!

Your's The understudy choke, cough uhhh "defnately not Khronic"

[playboy]

Good posts Super Joe, your posts have all the informations to back up all the claims. I will give you an "A+" if this is the research papers in Asia economy.

[Spitfire]

Yes The Understudy, less competition is probably what they are after and then collusion/price fixing or increases would be a lot easier with just one other company. DTAC probably makes both the other companies feel uncomfortable and threatened.

It's an anti-competitive move by the protagonists, not to mention pure sour grapes to boot, because DTAC have done a better business job by taking such a large share of the market.

To me, it's just TrueMove/AIS having a hissy-fit because it's SO unfair and they can't get this done by any other means.

If it goes through and DTAC is effectively barred from doing business here, then what a great advert for investing in 'Amazing Thailand' that would be, ie do business here for many years and then it's 'arse-ended-up' in a matter of weeks because of some jealous indigenous competitor whinges about something they don't like in such a pious way.

I bet what's good for the customer has not even entered any of their wildest dreams, as that's some silly western notion type of thinking. Blimey, if that happened, people might start wanting an end to discrimination or something ludicrous like that too.