15.ShinSat&Cambodia

In volatile regional markets, straight dial tones are safer - Far Eastern Economic Review, May 30, 2002Satellites and politics have often proved a volatile mix for Thailand's Shin Corp. in regional markets. In the early 1990s, Shin landed a controversial 99-year concession to operate a television service in neighbouring Cambodia. But when pre-election programming in 1993 was deemed biased in favour of the Hun Sen-led government that awarded Shin the contract, Norodom Ranariddh's newly elected administration quickly cut the licence to 30 years.In a bizarre twist, Cambodian officials later implicated a group of Thai nationals, including current Prime Minister Thaksin Shinawatra and other then-Shin Corp. employees, in a botched coup attempt in July 1994. Thaksin has always denied the charges, but soon thereafter dropped the Cambodian television venture altogether.Shin executives say the experience spurred a corporate rethink. Now Shin Satellite, or Sattel, only ventures into pure satellite or telecoms services in regional markets, far above the potential political fray of broadcasting. "We found the TV business is very sensitive, politically and culturally," says Shin Satellite executive chairman Dumrong Kasemset."Straight dial tones are reasonably harmless."And increasingly profitable. Soon after Hun Sen retook power in a 1997 putsch, Shin won a new Cambodian deal, a 35-year build-opeate-transfer wireless-telecoms licence. That concession - held by Sattel's 100%-owned subsidiary Cambodia Shinawatra, or Camshin - is now proving quite a coup for the company.Last year, Camshin booked a tidy 88 million baht ($2.1 million) in profits from its nearly 50,000 Cambodian subscribers. New subscriptions were up 240% in the first quarter of this year, lifting revenues 23% year on year. Merrill Lynch expects Camshin and Lao Telecom to contribute 21% and 29% to Shin Satellite's total earnings in 2002 and 2003 respectively.Cambodia's young mobile-telecoms market is already a competitive free-for-all. Five different operators compete for a mere 300,000 customers, though analysts believe the market will double in size this year. because Sattel also provides the satellite network for its Cambodian competitors, including market leader Mobitel, Cambodia has finally become a win-win battlefield for Shin. Barring, of course, another change in government.