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Internationalisation Opportunities For The Hong Leong Group: The Case Of The Telecommunication Sector In Thailand.

3548 words - 14 pages

1. The reasons for choosing Thailand. Pro&Cons of being located within this specific regionThis report will focus on the Telecommunication sector in Thailand because privatisation of state-owned companies is liberalising the telecommunication sector. Another reason for choosing Thailand, over other countries in the South East Asia region, is that political uncertainties are avoidable because of the maturity of democracy and fiscal policies under the current Prime Minister, Thaksin Shinawatra.The global telecommunications sector appears to be fairly confident, for instance, mobile-phone sales will increase 13.5% (Economist Intelligent Unit, Telecoms and IT, 2003). The technological integration and systems, like third generation mobile phone (3G), has been upgraded significantly.The country has an overall moderate risk for this investment and the danger of risk is lower than Asian-Pacific overall risk. The current political regime has strengthened and established an overwhelming popularity. Thailand has a relatively low inflation rate, 1.1% and sustains an optimistic economic outlook for the near future. The country was one of the best performing economies in East Asia in 2003 (Economist Intelligent Unit, 2003).1.1 Advantages for being located within the specific regionThe potential large market of ASEAN consists of 500 million inhabitants which provides regional business opportunities and also consumer power.One of the advantageous characteristics of Thailand as a location is political and economic stability. These are positive factors, compared with surrounding neighbouring countries; Cambodia, Laos and Burma. Thailand is overall least in danger of risk from political, economic, socially and legally perspectives among these three countries (World Market Research Centre; WMRC, Country Risk, 2004).The current political regime has maintained its economic growth and a supportive political popularity (U.S.Commercial Service Thailand, 2004). The country also has a free enterprise policy and welcomes foreign investment (Central Intelligent Agency; CIA, 2004). Under this political regime, privatisation of state-owned enterprises, e.g. telecoms and other utilities, provide potential opportunities for foreign investors to gain state-owned stakes.The economic growth in Gross Domestic Product (GDP) has a positive forecast 5.7% in 2004 (Economist Intelligent Unit: Thailand, 2004). This forecast encourages investors to consider Thailand as a lucrative place to invest.1.2 Disadvantages for being located within the specific regionOn the other hand, there are disadvantages to locate in Thailand. The Thai regulatory frameworks are in the process of improving and financial sector reform is in progress; non-performing loans remains 25% of GDP in the banking sector (WMRC, 2004).The country has bad air pollution from vehicle emissions and water pollution. Corruption and bribery are still controversial ethical issues in this country and border issues with neighbour...

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