2014 Thailand - Telecoms, Mobile, Broadband and Forecasts

Thailand’s military coup creates further challenges for the telecom sector.

The one single feature that characterises the Thai telecom industry has arguably been the stop-start approach to sector reform and re-regulation. An important step was taken with the Telecommunications Act being adopted as law back in 2000, but over the last decade or so successive governments have moved slowly on its implementation.

Then, following a period of serious political instability, in May 2014 there was a military coup that threw the administration of the country into a new phase. The junta that took power signalled a clear intention to take control of the country for a significant ‘transition’ period. During this time they intended to continue the full administration of the country and inevitably this meant certain things would change. This of course was to impact in a major way on the telecom sector.

By 2014 a range of deregulation issues were still crying out to be addressed. But the military coup made for an uncertain future. One of the big structural reform issues – the defining of the roles and the restructuring of TOT and CAT – was demanding urgent attention. In fairness to the industry regulator at the time, the industry over the years has not seen a sustained period of consistent policy direction from government. The market had been waiting a long time for the creation of the promised new regulator as well as for the allocation of 3G spectrum.

Thailand finally got its new regulator, the National Broadcasting and Telecommunications Commission (NBTC), in 2011. With the appointment of the board members, the new commission was able to start operating in its defined role. Things have now started to happen. The commission’s first half year of operation certainly saw a lot of positive action. And most importantly the 3G licence auction took place as scheduled in October 2012. Even more critically was that it took place against considerable opposition. The regulator continued to be resolute meaning that real change was taking place.

Thailand’s mobile market saw growth slow as the national economy turned down in 2009 and by 2012 the annual growth rate in the mobile market was around 6%. With some easing in the expansion anticipated anyway as the market passed the 100% penetration milestone, the demand for service has been negatively affected by the state of the economy. Nevertheless, on a positive note, mobile subscriptions having more than doubled over the past six years and penetration had reached almost 140% by early 2014. The market’s long run of robust expansion, a run that had started in 2000, was probably coming to a close. As growth in the mobile market began to slow, the operators were hoping that their newly launched 3G networks would help stimulate fresh business growth for them. A once all-powerful duopoly - AIS and DTAC – was still dominating the market despite the challenge of the other players. In reality, number three in the mobile market, True Move, was the only one to challenge the big two in any fashion.

The Thai internet market has been continuing on a growth path over the last number of years. The demand for internet and internet-related services finally began to increase, as evidenced by the expanding volume of international bandwidth. Recognising that the surge in services has been occurring from a relatively low base, Thailand still has a lot of development work to do to catch up to some of the other countries in the region. The country’s estimated PC penetration rate, for example, was still less than 25% at end-2013 and, although moving rapidly, the development of high-speed access had really only just started. Operators were looking at a variety of delivery methods to augment internet penetration. The burgeoning mobile market in Thailand ensured that mobile phones, as well as set-top boxes, were high on the list of potential delivery devices. At the same time, the cybercafe in its different forms had already established itself as a key element in the country’s access equation. Most importantly, with 3G and even 4G services being rolled out in a significant way, mobile broadband was booming and the smartphone and tablet market has been running hot.

Data in this report is the latest available at the time of preparation and may not be for the current year.