KSCThe Only Major ISP

with Profitfrom Day One

Prof.Dr. Srisakdi Charmonman

charm@ksc.net.th<www.srisakdi.th.com> then click <Internet KSC>

Topics of Presentation

1. Introduction

2. History of KSC

3. KSC Philosophy

4. KSC Achievement

5. KSC Future Prospects

1. Introduction1. Bill Gates “Profit from providing

Internet connection can be effectively

rounded to zero.”

2. For one single year of 1998: Average

market caps of Internet-related companies

increased seven folds in the USA.

3. None of those companies were profitable.

4. KSC is an exception, i.e. profits from day 1.

2. History of KSCCo-Founders:1. Prof.Dr. Srisakdi Charmonman

2. Dr. Kanokwan Wongwatanasin

Registration with Government

• 7 Jun 94 Internet KSC

• 21 Dec 94 KSC Commercial

• Jan 95 KSC started operation.

• 27 July 95 Jasmine purchased 25% of KSC.

19 95Jan HRHPri ncess Maha Chakri

SSSSSSSSSS SSSSSS SSS SSSSSSSSSSSSS

Internet Gateway to the USA.

KSC Group of Companies

CAT(Communications

Authority of Thailand)

OnlineAdvertising

Goldsite Co.,Ltd.

InternetShopping Mall

Co.,Ltd.

Jasmine InternationalCo.,Ltd.

Prof.Dr.SrisakdiCharmonman

Dr. KanokwanWongwatanasin

KSC GroupElectronicCommerce

Co.,Ltd.

65%35%

30%25% 45%

100% 100% 100%

Internet KSC(Internet Knowledge Service Center Co.,Ltd.)

100 Million Baht Capital

KSC Commercial(KSC Commercial Internet Co.,Ltd.)

15 Million Baht Capital

3. KSC Basic Philosophy3.1 No Borrowing Unless Completely

Necessary.

• Usual: Money makes money.

Must borrow money to invest.

• KSC: Use advanced payment from customers

& shareholders’ money to invest.

• Had KSC borrowed from the USA,

KSC would have been badly bruised.

(from 26 Baht/$ to 37-52 baht/$)

3.2 Assumption University as Incubator

• Started at AU rather at a business district.• KSC could rely on students, staff and facu

lty of AU to serve part-time at KSC.• KSC can mobilize any number of highly qu

alified manpower.• Example: Asian Games required 120 home

pages designed and implemented within 3 days and no other ISPs could do it except KSC.

3.3 Hardworking• Internet technology and competitions are ve

ry dynamic.

• Working 8 hours a day is not enough.

• The co-founders have been working 16 hours a day, 7 days a week.

• Several contracts concluded and publicity achieved because of hardwork.

• The co-founders hold 75% of KSC and can make important decisions right away. Then report to the Board for ratification.

3.4 Win-Win Cooperation• In politic and business, neither foe nor

friend remains permanent.

• Your foe becomes your friend if you let him share your benefits.

• Your friend becomes your foe if you take benefit away from him.

• Therefore, KSC always negotiate to arrive at a win-win cooperation.

• KSC is highly flexible in negotiating with any potential business partners.

4. KSC Achievements4.1 KSC has no debt.

KSC has 100 million baht

(about 2.7 million US$) cash on hand

from advanced payments,

sale of 3, 6, 9, 12 months

of Internet cards

(similar to phone card,

and only about 30% usage).

4.2 Profits of Internet KSC Group1998 profit of Internet KSC 19.43 M Bht

1998 profit of KSC Commercial 17.72 M Bht

1998 Total profit of KSC Group 37.15 M Bht

(About 1 million US$)

Internet KSC owns 65% of KSC Commercial.

Consolidated profit of Internet KSC

= 19.43 + 0.65 x 17.72

= 30.95 million Baht

First 4 Years Consolidated Profit of Internet KSC

0.94 0.67

10.6

7.46.8

4.5

31

21.7

0

5

10

15

20

25

30

35

Profi

t in Million

Baht (

Roun

ded)

1995 1996 1997 1998 Year

Income Before TaxNet Income

Analysis of First 4 Years Sales and Profits

Sales: Individual 40% Corporate 40%

Other 20%

Assumption: To obtain Indices for future projection, it is assumed that sales and profit are distributed equally for individual and corporate.

Result of first 4 years:

Avg.sales : 400 Bht./ind./yr 0.4 MBht./corp/yr

Avg. profit: 40 Bht./ind./yr 0.04 MBht./corp./yr

10% 10%

4.3 KSC Customers in 1998

Individual LAN (educational) 195,000

Individual Dial-up 60,000

Total number of individuals 255,000

Corporate Web hosting 200

Corporate Leased line 180

Total number of corporate 380

Rough Estimate of Individual Internet Users in Million

* Notes : 12 Million = 20 % of population of Thailand

1998 2006

Thailand KSC Thailand KSC

1. University LAN 0.275 0.100 1.5 0.45

2. College LAN 0.110 0.053 0.8 0.24

3. School LAN 0.110 0.042 0.8 0.24

4. Indiv. Dial-up 0.105 0.060 8.9 2.68

Total 0.600 0.255 12.0* 3.61

Partial List of Corporate Customers of KSC

• American Embassy

• International Labor Organization

• Thai Shell

• Siam Cement

• Krung Thai Bank

• Dept. of Intellectual Property

• PacLink

• Etc.

• Bangkok Metro Admin.

• National Housing Authority

• Royal Forestry Dept.

• Office of National Education

• Mahidol University

• Ramkamhaeng University

• NTTI (Thailand)

• Etc.

4.4 KSC Bandwidth to USA- April 8, 1999 12 Mbps - In 2000 45 Mbps

- Nov, 1999 16 Mbps - In 2006 180 Mbps

To conserve KSC bandwidth to USA:• 140 Gb Proxy Farm at KSC NOC.

• Proxy at every building and every LAN.

• Programmed downloading 1:00 - 5:00 am.

webs to use next day.

• Large Leased Lines to local exchanges.

5. Future Prospects of KSC • KSC is the first and largest ISP in Thailand.• KSC will remain the largest ISP in Thailand.• KSC will provide all kinds of Internet-related services.5.1 KSC Branches in all 76 Provinces of Thailand by the year 2000.5.2 KSC House Call. Technician to provide installation and training at customer’s home and office.

5. Future Prospects of KSC (continued)

5.3 KSC to Become a Phone Company

when Thailand telecommunications

deregulated.5.4 Complete Ecommerce Services.

(KrungThai - KSC Ecommerce)

5.5 KSC Free Email for Million Users.

5.6 KSC Free Education-on-Demand.

5. Future Prospect of KSC(continued)

5.7 KSC Own Telecommunications Network.

5.8 KSC High-Speed Internet Connection.

5.9 Hard-to-Refuse Offer to Educational

Institutions.

5.10 Grooming Kids to Become Customers.

KSC Projected Profits in 2006Worst : 7 M US$ Best : 40 M US$

67 13194

0.9

257

38 50

183

10.6 30.9 306.80.9 10.6

418

703

1,019

72136

243

6.8 30.9 36

1,478

0

200

400

600

800

1000

1200

1400

1600

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year

Profi

t befo

re T

ax in

million ba

ht

Worst Case

Best Case

6. Concluding Remarks

• KSC is the first

and largest ISP in Thailand.

• KSC will remain the largest ISP in Thailand.

6. Concluding Remarks

With

• Proven Track Record of Profit from Day One,

• Capable Management,

• Dedicated Manpower Resource,

• Excellent Business Models, and

• Promising Prospects,

KSC is now ready and willing to negotiate with potential strategic and/or financial investors for mutual benefits.