flag thailand

ecattlogo

Electronic Commerce and New Ways of Working in Thailand

by:

Jack M. Nilles

 JALA International, Inc.

Los Angeles and Bonn, November 1999

Contact:

empirica

Gesellschaft für Kommunikations- und Technologieforschung mbH, Oxfordstr. 2, D-53111 Bonn

Tel.: (+49 02 2) 9 85 30-0, Fax: (+49 02 28) 9 85 30-12, Email: info@empirica.com, http://www.empirica.com, http://www.ecatt.com, Contact: Werner B. Korte

1 Thailand

1.1 The economy

Thailand is still a largely agricultural economy, with 48% of the workforce farming. But the agricultural component of the workforce is declining steadily and the service and information sectors are expanding, as is shown in Figure 37. GNP per capita is 22% of that of the United States.

Thailand's information infrastructure historically has been controlled by the government under two organizations: the Telephone Organization of Thailand (TOT) for local traffic and the Communications Authority of Thailand (CAT) for long distance service. As part of Thailand's agreement with the World Trade Organization, both of these organizations are to be transformed into non-monopolistic telecommunication operators, beginning in 2000, like the "concessioned companies" that have been operating under their control. In 1999 a long distance phone call to the United States was about 59 times the cost of a local call.

As one consequence of the economic crisis beginning in 1997, Thailand has instituted a number of reforms that focus on development of its information economy, elaborated in its IT-2000 plan. The plan comprises three main components:

1. Better telecommunications infrastructure, including deregulation.

2. Improved human resource development and education, including development of its software industry.

3. Good governance, including elimination of corruption and development of better IT services to the public.

Figure 37: Estimated composition of the workforce in Thailand

Thailand's first Internet use was in 1991. In 1992 the Thai Social/Scientific, Academic and Research Network (ThaiSam) was founded. As of 1999, ThaiSam had about 100 connections to all of the state-owned university sites. In 1995, ThaiSam extended its service to secondary schools. This was expanded in 1998 to allow schools to access the Internet without incurring expensive long distance charges.

Also in 1998 the National Information Technology Committee (NITC) empowered six subcommittees to draft information technology-related laws. These are:

1. Data Protection Law to protect privacy rights;

2. Computer Crime/Computer-related Crime Law to criminalize computer-related offenses;

3. Electronic Data Interchange Law to set the legal framework for electronic contracts;

4. Digital Signature Law to provide electronic commerce transaction security;

5. Electronic Funds Transfer Law to promote consumer protection and allocate liability; and

6. Universal Access Law to promote universal access to the National Information Infrastructure.

As a result of all of these initiatives, foreign investment in the telecommunications industry has been expanding and the new telecommunications regulations allow up to 40% foreign ownership of ISPs in 2000, expanding to 75% by 2006. Official registration, but no license, is required for opening a web site or online information service. In 1999 a typical monthly charge for a dialup Internet service in Bangkok was about 30 euros for 50 hours. The estimated growth of Internet usage in Thailand is shown in Figure 38.

Figure 38: Estimated growth of Internet usage in Thailand

1.2 E-commerce

Figure 39: Estimated growth of electronic commerce in Thailand

The development of electronic commerce is one of the keystones of Thailand's IT-2000 plan. In January 1999 the government approved a proposal to set up an Electronic Commerce Resource Center to provide e-commerce-related information and training programs, particularly to SMEs. One goal of the center is to prepare SMEs to compete internationally via e-commerce-as well as to defend themselves against competition from outside the country. The activities of the center are part of the APEC (Asia Pacific Economic Cooperation organization) Virtual E-commerce Resource Network. Related initiatives include a smart card development program, a center to provide EDI services between government agencies and the private sector, and a one-stop trading service to smooth the procedural processes for the export trade.

Even though the coordinated government efforts just began in 1999, there have been some e-commerce operations prior to that as various entrepreneurs began online and Internet-based operation. These are expected to accelerate as the government initiatives come to fruition-particularly those efforts involving transaction security. Our estimates of the growth of e-commerce in Thailand are given in Figure 39.

1.3 New Ways to Work

The evils of traffic congestion in Bangkok are becoming well known around the world, with stories of multi-hour trips just to get from one side of the city to another. Air pollution is also becoming a deterrent to tourism and business development in general in and around Bangkok. As yet there is no concerted government effort to promote telecommuting or other forms of telework, nor are there any available survey data of the level of teleworking in Thailand. Nevertheless, teleworking is expected to increase, particularly as the information sector of the economy continues to grow and the telephone network expands from its 1999 level of 10.4 telephone lines per 100 inhabitants. Our estimate of the growth of teleworking in Thailand is shown in Figure 40. Note that the potential for telework in Thailand by 2003 is significantly higher than our economy-corrected forecast.

Figure 40: Estimated growth of telework in Thailand.