ERICSSON

Little did Lars Magnus Ericsson know that when he started repairing telegraph machines back in Stockholm in 1876, that 125 years later, his tiny firm would grow to be one of the finest telecommunication companies in the world. Ericsson, who was basically the Swedish Alexander Graham Bell, introduced telephones to his country, and the rest, well, is history.

But his company also has a very interesting history in Thailand. It has been doing business here for close to a century now, as it introduced the first manual switchboard to the country back in 1908, at a site close to the Royal Palace. And although its Thai roots lie in fixed switching telephone exchanges it has been involved in various projects over the years including installing electro-mechanical systems for the Telephone Organization of Thailand, the armed forces and private companies.

In the mid 1980s, the company changed its focus; continuing to prove it was at the forefront of market trends as it introduced the first cellular system, the NMT, to Thailand. This originally only took up a small portion of the company but today the infrastructure and terminals of its cellular system make up the bulk of its business here.

Scott Murray recently interviewed the outgoing President of Ericsson (Thailand) Mr. Jan Kemvall about his company, the evolution of mobile phones and mobile phone culture.

When your company first introduced mobile phones, did you have any idea that they would become as popular as they are? “When cellular phones were first introduced, people thought they would just fill a small niche and only be used by journalists and salespeople. But, globally, by next year, or the year after, there will be more cellular users than fixed users. We were optimistic when they were introduced, but no one would have believed this fantastic growth back then.

“It’s interesting to note that the world now has approximately one billion fixed users, and soon it will have one billion cellular users and one billion Internet users. But it took over 130 years to have one billion landlines; about twenty years to reach a billion cellular subscribers; and now only about ten years to reach a billion Internet users. (Mr. Kemvall also notes that by 2003, the majority of cellulars will be WAP enabled.)”

What about the threat of radiation caused by mobile phones? “We try and stick with the facts. We don’t have our own research facility studying this, but we are cooperating with a number of institutes, universities and the UN to really find out what the facts and figures are about this issue, and not just deal with the speculation. We need to take this very seriously though, because many people are very concerned about it.”

Is there any research going on in Thailand about this particular issue? “No, not that I’m aware of.”

The name game: what’s the difference between a mobile, a handset and a terminal? “They are all synonyms. Phones, or mobiles, used to relate to something you just talked into, but now they have evolved into much more than that, so people starting calling them handsets, or terminals. But maybe we should call them mobile terminals. Our official name is Sony Ericsson mobile communication. Or maybe we should just call them telephone devices to keep it simple.”

What about mobile phone etiquette? “I, myself, get extremely irritated when I’m in a cinema and someone’s phone goes off, or if I’m on the putting green and someone’s phone goes off. But the facilities are available today; you can make choices, so that you can receive a call without bothering people by simply turning off your ring signal and receiving a vibration instead. I know the president of our company, Kurt Hellström, gets extremely agitated when a phone goes off during an important meeting.

“Increasing people’s awareness as to how to fully optimize the functions of their phones is very important as well. For example, if I’m in a meeting and don’t want to receive a call, I could simply forward the call to an answering service, or I could use the `divert call’ function on my phone and have the call sent to my secretary. Then, if she wanted to get back in touch with me, without calling me, she could use `SMS’ and send me a short message instead. And this is working. I think you’ll notice that more and more people are sending short messages now, whereas before they would have called people to relay that same message.”

But it’s still true that many people buy phones and only use a fraction of the technology available that the phone offers. So how can people make the best use of an Ericsson phone? “First I recommend to read the manual, which is an option. Then, all the information is also posted on our website, www.ericsson.co.th. Also as the technology improves, the phone simply becomes easier to use. We also have training courses for the people who sell our phones, for they are our most common interface with our customers, so the more they know, the better. But let’s be honest, it will always be the children that will teach the parents. They are the biggest teachers.”

The Big three mobile phone companies are obviously Nokia, Motorola and Ericsson, with Nokia usually grabbing the lead and Motorola and Ericsson fighting it for spot number two. But what gives you a competitive advantage over your two rivals? “We now are the only ones using GPRS (General Packing Radio Systems) which is more convenient because it easier to connect to data services, thereby enabling it to connect to information faster.”

What’s the difference between this and WAP? “WAP is for handling content in the old traditional way, which is rather slow and more complicated, because you have to dial up to access the content. But if you combine the WAP with the GPRS, you don’t have to dial up, you are always connected to the Internet.

“What GPRS does is allow you to access information on your mobile as quickly as you could if you were surfing the Net on your computer. You can also send pictures by attaching a digital camera to your cellular. You cannot send video yet, that will be too slow, but that will probably be the next generation.”

When the will the GPRS be available here in Thailand and how much will it cost approximately? “The GPRS service is already on the market here in Thailand. Since the GPRS service uses new technology, a new phone capable of providing GPRS is required. Ericsson launched T39 in early November, which holds GPRS functionality.”

Where does GPRS Network cover? “In the beginning, the GPRS network will cover Bangkok and some other provinces, but will be quickly expanded to cover all provinces.

When will international roaming be available? “International roaming for GPRS will be available later this year.”

Where can I get a GPRS phone? “GPRS phones are now available from your closest phone shop.”

How will the billing system work for the GPRS? “GPRS is charged by volume of data sent and received. It is different from the Circuit Switched Data, which is charged by the airtime.”

How did the September 11 attacks affect your business? “Immediately after September 11, there was a huge demand to get in touch with people, so yes, the need for having telecommunications increased, because it reminded us of how important it is to be able to contact people.”

How many have cellular phones in Thailand? “We know that this year alone the number of mobile phone users in Thailand will increase 100%, from three-and-a-half million to seven million subscribers, or about twelve percent of the population. Then, next year, we expect another three to four million more people to purchase mobiles, so that will bring us to between ten and eleven million cellular users, or fifteen percent of the population.”

What about making cellulars more accessible to those not making so much money? “At least twenty percent of the population can afford a mobile phone. But then it gets difficult because a large number of people make only between Bt5-10,000 a month. And we haven’t been able to come up with an easy solution that would allow them to buy a mobile and still be able to take care of all their other needs. There have been ideas suggested like having them pay half-a-month’s money’s salary to buy a phone, but obviously many people won’t be able to do that. So this is definitely a sensitive area, no matter what we do.”

Are you doing any charity work? “Our first contribution here in Thailand has to be on developing the country, not on charity. And we are doing this by bringing in the best and most suitable technology, and developing the skills of Ericsson’s employees and our customers.

“But we are sponsoring a number of events and are sending a number of students to study in the US through a scholarship program we support.”

Which universities are you working with to help further IT studies in Thailand? “Ericsson Thailand holds the Thai-Ericsson Foundation that is open for all students at all Universities in Thailand.

“Aiming to produce an excellent IT knowledge-based human resource for Thailand, the foundation is opened to all Thai people and students to apply for the scholarship to fund their further study for a Master's degree or doctorate's degree in Infocom, Finance and Economics.”

Since many people want to keep up with the latest technology, they are constantly buying new phones, so isn’t there an environmental concern about what happens to their old mobiles? “Actually, most people pass their cellular phones on to friends and family members, so that really isn’t an issue. The problem lies in discarding the old batteries; they need to be collected. This is a responsibility that both suppliers and distributors must deal with.”

At this point, Mr. Monthon Chumnong, the Vice-President of the mobile phone division, joins the interview so I ask him to tell us about Ericsson’s merger with Sony and how it will affect the branding of the company’s products? “Sony Ericsson Mobile Communications was established in 2001 by telecommunications leader Ericsson and consumer electronics powerhouse Sony Corporation. The company is equally owned by Ericsson and Sony, whose combined mobile phone businesses on a pro-forma basis achieved annual unit sales of approximately 50 million units and sales of US$7.2 billion in 2000.

”The new company will create a new and powerful brand for its range of future products. The first joint products will be announced in the third quarter of 2002; however both companies' product lines will remain on the market through 2001 and will continue to be sold in 2002.

”Through the combined brand strengths of Sony and Ericsson and by being responsive to the market, consumer behavior and competitors, our goal is to become the number one player in mobile multimedia products.”

Parting thought from Mr. Kemvall? “Well, we’ve gone from fixed lines to the cellular network, starting with purely voice transmissions. Then we added more facilities like short messages, WAP and GPRS. And we assume that there will be a continuing growth of ways to use cellular phones and the cellular network. But cellular phones will not take over, as the old traditional fixed network will always be there, because it still provides the fastest phone communication.

“But we will continue to come up with new solutions for our cellular systems, phones and infrastructure in co-ordination with our new partner Sony.”

ERICSSON – BRINGING WORLD CLASS TELECOMMUNICATIONS TO THAILAND