Only the approval of competition authorities and approval of Nera’s corporate assembly is needed to finalize the sale of Nera’s mobile satellite communication activities, which make up 10 – 20 per cent of the Nera Thailand business, to Danish rival Thrane & Thrane. However, Nera’s senior vice president and Thailand country manager, Major Choakdee does not fear for the future of Nera’s business in Thailand.
“The mobile satellite activities are just a small part of our Thailand business and should the sale go through, we might even keep mobile satellite in our product port folio. It has yet to be decided at our regional office in Singapore,” he says from his office at the 26th floor of the 253 Asok building with the spectacular Bangkok view.
Should Nera decide to keep the mobile satellite equipment, there is one more question that needs to be discussed.
“Then we will have to decide which brand name to represent. Of course it could be Thrane & Thrane, but it does not have to be. I expect more competition in this field of business, especially from Japan, if Thrane & Thrane takes over the Nera mobile satellite activities,” he explains.
According to Major Choakdee Thrane & Thrane has 50 per cent of the global market for mobile satellite activities, while Nera got 40 per cent.
Unanswered questions
“I am not really aware of the plans of the new ownership. A lot of the products from the two companies overlap and should the sale go through. I see two options: Either Thrane & Thrane wants to get rid of a competitor, but I cannot see that it will be worth the money. Another option is that the new owners want to combine the best from the two products and make new improved products,” he tells while reaching for a cigarette.
Whatever the new ownership chooses to do, Major Choakdee expects increased competition and a market share less than the 90 per cent the two companies holds today.
“Reducing the number of products must lead to a smaller market share as not all of the present Nera and Thrane & Thrane customers will be able to find that very product that they are looking for. Of course new improved products will attract new customers, but at the same time I expect more companies trying to improve their market share as a result of the new situation on the market,” Major Choakdee says.
Scandinavian hopes
From Major Choakdee’s perspective combining the two products resulting in an improved products represents the best solution.
“It is a Danish company buying parts of a Norwegian company, and that cannot result in much lower production costs as wages are very high in both countries. To me that means that
the new products must be of very high quality to make them worth the price,” he explains.
Being the president of the Thai-Norwegian Chamber of Commerce he hopes that the new ownership will continue to sell high quality products.
“To Thais Scandinavian products represent supreme quality. The four Scandinavian chambers of commerce is doing their utmost to ensure that this reputation is kept, as the reputation of a brand is so very important when a potential buyer is looking at products,” he enthusiastically explains.
In order to keep a good reputation wants to make sure that Nera products can be serviced for a number of years to come.
“We are not going to do like Chinese companies that sell their company and run. We will do our very best to make sure that Thrane & Thrane will be able to service our products in the future,” he promises.
The Future
Not worrying too much about the possibility of loosing the mobile satellite activities from the product portfolio, Major Choakdee is very optimistic regarding the future business of Nera Thailand.
“We offer solutions in IT infrastructure i.e. computer networking and we experience increased business in the field of credit card terminals, so the possibility of loosing the mobile satellite activities does not spoil my sleep at night,” he laughs.
More than 20,000 Nera credit card terminals are spread throughout Thailand. The sale is expected to be finalized late September 2006 after approval from the relevant authorities and the approval of Nera’s corporate assembly.
