Thaicom CEO Suphajee Suthumpun.
Credit: Thaicom

Suphajee Suthumpun had worked for IBM for 23 years when she received a call from Thaicom asking her to leave the IT giant and turn around an ailing satellite operator. It was certainly not a challenge for the faint hearted.

Thaicom took a calculated risk in 2011 when it appointed Suphajee Suthumpun as its new CEO. The company, which was failing to make its Ipstar strategy a success, had been in the shadows for a number of years with skepticism as to whether the operator could turn its fortunes around. Suthumpun, who had 23 years experience at IBM, was seen as the ideal leader to bring about the cultural change needed to make the company profitable again.

Suthumpun admits that while IBM and Thaicom can both be seen as technology-based companies, there are key differences. “IBM is a major player in the tech industry, and change is very fast-paced with new technological innovations appearing nearly every day. In the satellite industry the pace of change in space technology is not nearly as hectic, mainly because of the nature and lifetime of the product, and the amount of time required to prove the viability of a new product. Even so, the ground segment is as competitive and hectic as any other industry, and there is no difference in the nature of the needs and demands of customers, whether they are IBM customers or Thaicom customers,” she says. “The major difference was not about the technology, but the differences in culture and management systems. IBM, as a global company, has developed systems and management structures that are identical and consistent throughout their global operations. The system is aimed at efficiency and appraises performance continually.

Moving to a smaller company such as Thaicom, those systems are not as fully developed or rigid and allows for greater flexibility and, in a way, greater adaptability to business conditions.”

Still, coming into this role would prove far from easy and Suthumpun talks of how certain ideas and systems had become ingrained in the company’s culture and how it was a challenge to change things around.

She admits the company had to do things step by step, and with these changes, three different types or groups of people emerged. “The first group are those people who are willing to accept change and work with you; the second adopts a more ‘wait and see’ approach, and they want to see proof that the new management style is working before they join in. The third group consists of people who will resist all change, and it is this group that is the most difficult to work with,” she says. “I worked with all three groups, coaching and coaxing as needed, albeit more of my time was spent on the first two groups, as I thought that by convincing them that the changes were beneficial, their participation in the change process would also bring the third group into the process. Most of them (the third group) actually assimilated and are still with us, although a few did leave.”

These changes, Suthumpun says, brought about a “cultural transformation” in the company since she was appointed CEO. One of the key tenants of her leadership strategy was creating “brand ambassadors” and “value champions” within the organization. “I implemented a more integrated communications process to deliver information to all our stakeholders, whether internally or externally. The effort was well worth it, as employees feel much more a part of the company’s operations and are more aware of where the company is going,” she says. “We went through a corporate rebranding exercise, and we have identified the company’s core values, which we are now communicating throughout the organization. To push this initiative, we have identified ‘brand’ ambassadors or ‘value champions’ to create awareness and really get people to understand what Thaicom is all about; what our DNA is.”

The results under Suthumpun’s leadership have been palpable as the company has now shown profits for the last seven quarters. “What I had to do was build trust; trust that the direction we were going to take was actually going to show results. It takes time to build trust, but the easiest way to do so is to show a profit – and that is exactly what we did. This gave people the confidence that we were on the right track, and it has motivated people and energized the company,” she says.

Thaicom CEO Suphajee Suthumpun with two of the company’s satellite network and frequency control engineers at Thaicom’s satellite station in Nonthaburi, Thailand.
Credit: Thaicom

However, after a number of year’s in the doldrums, it seems Thaicom just needed a healthy dose of common sense and rational business thinking to turn things around. Also, it seems the foot soldiers of the company were ready to embrace change. “When I arrived at Thaicom I realized that the scope of the company’s activities was quite diversified. Thaicom had, and still has, satellite operations, foreign telephone operations, and Internet and media services; so, quite a diversified portfolio, and quite a task to manage all these different activities,” Suthumpun says. “But, there is a lot of energy around me, there is a desire on behalf of the people to be part of a different company. I think in a way, I am quite lucky; we have had a group of key people who have been willing to change and go along in this new direction.”

Given her lack of a satellite background, Suthumpun has had to adapt her style of leadership for the company. Bringing about change has touched a number of different aspects; while there has been a focus on the technology and the people, making the company more efficient has also been key. “The business and financial sides cannot be overlooked, and I put a lot of focus on these two areas as well,” she says. “We readjusted our management system to move it towards a more function-based system, and we looked at our foreign operations to improve efficiencies there as well as to strengthen those overseas operations.”
With the company already returning to profit, Suthumpun can now implement a more progressive growth plan aiming to simplify its structures going forward. “You have to look at what our core competency will be going forward. We would like to see 80 percent of our revenues coming from satellite services. We want to focus on growing the company as a satellite service provider. We will focus on our core operations and do a bit more portfolio management, so we will keep a close eye on our other operations, and if we feel that they are not really making great contributions to us, then we may exit from those operations. We will focus on the growth parts of the business, and particularly the satellite business,” she says.

Certainly, one of the key drivers for success in recent times has been Ipstar, which had previously been a millstone round the neck of the company. When Suthumpun joined Thaicom, Ipstar (Ipstar 1) only had a 20 percent utilization rates, and the company hardly had any big customers for the satellite. Now utilization is more than 50 percent and it can count on companies such as NTT DoCoMo, KDDI, Softbank (Japan), NBN (Australia), BSNL (India) as major customers for the services.

Analyst View
Pawan Chongussayakul, a satellite equity analyst at Phatra Securities is also positive about the changes that Suthumpun has made to the company. “We think that her key strength for the management is the ability to manage expectation as so far she has been able to more than deliver what she promised. Her composed but rather laid-back style has been able to convince both investors and analysts that her sensible targets can be met with ease,” he says. “So far, what she had brought to the company has been more than just an outstanding financial growth but her presence also comes with the belief that it can actually be sustained.”

Chongussayakul says that under Suthumpun’s lead, the company has witnessed what he calls the “crucial cost streamlining” of sales and marketing team into one that oversees both satellite broadcasting and satellite broadband businesses. This has resulted in a significant reduction in both operating cost and SG&A. “She also made a sensible business decision to divest loss-making telephone operation in Cambodia ‘Mfone’ to off-load drag on the company’s consolidated result over past three years,” he adds. “Moreover, her decision to adopt an aggressive marketing strategy to promote its pre-launch sales of new satellites was proven a tremendous success as pre-launch sales for Thaicom 6 have now reached 66 percent (surpassing the 30 percent break-even point) while pre-launch sales of Thaicom 7 has now reached 40 percent.”

Ipstar 2
Given the history involved with the original Ipstar 1 project, Suthumpun admits Thaicom will likely proceed with a greater degree of caution with Ipstar 2. She says two conditions need to be met before the operator would place and order for Ipstar 2. “The first condition was that utilization on Ipstar 1 had to reach at least 40 percent, a milestone which we have met now; and second, that we would have to have firm commitments from customers to take up a minimum of 50 percent on Ipstar 2 before we start our Ipstar 2 program,” she says. “Ipstar 1 utilizes fixed spot-beam technology, which means that we cannot re-allocate bandwidth to a different territory if there is excess capacity in one place and not enough in another. In countries like Japan and Thailand, Ipstar 1 capacity is sold out, so we are now looking at what the future needs will be in those countries, and if there will be enough demand from them as well as other territories to meet the second condition of 50 percent committed capacity.”

In terms of when Thaicom will order the satellite, Suthumpun expects to have a clear picture and a plan to build the second Ipstar satellite by the end of the year. “As we identify more customers, we will work on the business plan for the satellite and do all the feasibility studies and ask for approval to build the satellite,” she says. “We want to make the announcement this year.”

However, while Thaicom could be on the verge of making a big decision regarding Ipstar 2 in the near future, Suthumpun says it is not the number one priority for the company right now. In fact, with a more progressive regulatory environment in place, new markets could open up for Thaicom. Suthumpun cites the formation of the NBTC (National Broadcasting and Telecommunications Commission). With a lot of regulations being updated and others being implemented, key industry players feel that this is going to benefit them.

“The Commission is encouraging broadcasters to launch quality channels, and this is increasing demands for capacity. HD is becoming more popular, and pay-TV is becoming more acceptable than it was in the past, compared to FTA. All this requires more bandwidth, and to meet that demand, we will be launching a new satellite (Thaicom 6) this year. The demand in the market place is so high that we have already pre-sold 60 percent of the satellite’s capacity, and we could well sell even more before the satellite is launched. Basically, the payload over Indo-China and Thailand is sold out, so we are considering the need for an additional satellite to be put at the same location. We are working on that right now, and should have more on that soon,” she says.

International
Thaicom could also look to grow more internationally. Suthumpun admits that, outside of Asia, Africa offers some interesting possibilities for the company. “ We are focused on Africa like everyone else, but I would say that our strategy is a bit different. Part of the payload for Thaicom 6 will be dedicated to Africa and sub-Saharan Africa, and we will look at where the opportunities are across the continent,” she says. “We will focus on specific segments and target specific countries and leverage the experience we have as an end-to-end solution provider in Asia, and see if we can bring that into Africa. Our focus will not only be on selling the bandwidth, but also selling the solutions into particular areas.”

In terms of the number one business opportunity that Suthumpun sees for the company going forward, she points to a convergence between broadcast and broadband solutions. “We are ideally positioned to exploit business opportunities that will come out of this convergence, and to offer integrated solutions with our broadcast and broadband satellites,” she says.