2013 Thailand - Telecoms, Mobile, Broadband and Forecasts

Thailand’s telecom sector moves forward as regulator starts managing the mounting challenges

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. Coming into 2012 a range of deregulation issues were still crying out to be confronted. 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 the allocation of 3G spectrum.

Thailand finally got its new regulator, the National Broadcasting and Telecommunications Commission (NBTC), in September 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 has continued to be resolute since last year’s auction and this means that real change is 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 120% by early 2013.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 licences would help stimulate fresh business growth for them. A once all-powerful duopoly - AIS and DTAC – was still dominating the market despite the entry of a number of new players. Number three in the mobile market, True Move, has been the only one to challenge the big two in any fashion, however.

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 only around 24% at end-2012 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, the smartphone and tablet market has been booming. 

Market highlights:

• Thailand’s mobile market had reached 84 million subscribers coming into 2013, for an overall penetration of 120%.
• After more than eight straight years of strong growth, the annual increase in the mobile subscriber numbers had eased substantially in 2009/10 as the national economy slowed.
• For 2011 onwards, mobile subscriber growth was settling at around 10% annually, with the strategic focus shifting to mobile broadband.
• The NBTC, the country’s new telecoms industry regulator, became fully operational in 2012 and has already had a major impact on the telecom industry, finally clearing the way for 3G mobile licences to be issued by auction in October 2012.
• The new regulator has also given notice to the operators that industry standards will be enforced, vigorously promoting the theme of consumer protection in playing its role.
• The broadband internet market in Thailand further strong subscriber growth in 2011, an annual rate of 15%-25% being the pattern.
• There has also been a surge in demand for smartphones, indicating a change in consumer behaviour on the back of increasing availability of mobile data services.
• Overall fixed broadband penetration was still relatively low - 7% in early 2013.
• The fixed-line market was showing no signs of revival, with growth going negative in 2011/2012 and an early return to positive growth seeming unlikely.
• The Thai telecom market continues to be dogged by accusations of corrupt, illegal and/or inappropriate behaviour by various parties in the industry.
• Foreign investors remained concerned by the new government regulations aimed at limiting foreign control of operators.

Thailand: - key telecom parameters – 2011 - 2013

(Source: BuddeComm)

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