Publication Date: December 2023
Report Pages: 173
Analyst: Sebastien De Rosbo
Thailand’s telecom sector is relatively mature and hosts a mix of public and private sector players. The mobile market is highly developed and has experienced strong growth over the last seven years. The market returned to growth in 2021 after it contracted in 2020 driven by the Covid-19 pandemic, and a steep decline in inbound tourism. However, it remains highly saturated, owing to overall maturity and the popularity of multiple SIM card use, which has resulted in a particularly high penetration rate.
In general, the sector retains considerable potential given the impetus of 5G, the recent spectrum auctions, and continued network deployments by the country’s network operators. Further auctions of spectrum in the 700MHz band (being repurposed from digital TV broadcasting), and in the 3.6GHz range will further improve network capacity.
The announcement of the planned merger of True and DTAC, the country’s second and third largest mobile network operators, holds the potential to significantly alter the mobile market’s dynamics. Notably, if approved, the new entity would displace the current market leader AIS. Additionally, this could risk establishing an unofficial duopoly in the market (despite the presence of the far smaller National Telecom and other players such as MVNOs) posing a risk to consumer choice and benefits.
In the wireline segment, the decline in fixed-line penetration is expected to continue as subscribers migrate to mobile networks for voice and data services. More recently, the emphasis among operators has been to bolster their fibre footprints in key high-value areas. The transition to fibre from DSL and cable has also been facilitated by changes to the regulatory structure that have removed some barriers to investment. This is supporting the cannibalisation of older copper-based DSL lines by fibre. However, the returns from this investment remain a long-term prospect as consumers still favour entry-level packages.
There is also strong interest from the government, as well as private vendors, in establishing Thailand as a data centre hub to serve the region. Recent developments include Amazon tapping Thailand for a data centre build to support its hyperscale infrastructure in the Asia Pacific region, as well as Telehouse’s facility set for launch in 2023.
The size, capacity and spread of existing data centres in the Greater Mekong Subregion (GMS) outside of Thailand is small. However, Thailand retains some advantages to attract investment, including improved fibre connectivity and international bandwidth. Increasing submarine capacity, such as the SJC2 cable to come online later in 2022, will considerably improve Thailand’s potential as a regional hub.
The outbreak of the Covid-19 pandemic had a significant impact on production and supply chains globally during 2020, impacting electronic device production and operators’ ability to maintain and expand their infrastructure, hampering their 5G network rollouts. On the consumer side, spending on telecoms services and electronic devices was severely weakened over the 2020/2021 period, reflecting the effect of large-scale job losses and the decline in disposable incomes.
However, the Covid-19 pandemic highlighted the crucial nature of telecom services, beyond general communication, as a tool for virtual services such as e-learning, telehealth, e-commerce, and remote working, as well as digitisation in the public sector. This helped to offset pressures on revenues.
During 2021, supply chain bottlenecks eased, enabling the resumption of 5G network expansions and device production. Over the coming years, the uptake of virtual applications and services will continue to trend upwards, supporting demand for mid-range and premium devices as well as digital infrastructure to support high-speed data services and cloud-based solutions, for example.
Although it is challenging to predict and interpret the long-term impacts of the crisis, the industry forecasts reflect a Thai market recovering from the acute impacts of the pandemic, buoyed by a successful vaccine rollout and an ongoing economic recovery lifting consumer purchasing power. The main risk to our outlook stems from external economic factors including the impact of the pandemic on Thailand’s trade partners as well as the ongoing conflict between Ukraine and Russia.
The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, as well as the pursuit of the state’s e-government ambitions.
During 2020 and 2021, the Board of Investment of Thailand also introduced a raft of measures that helped to insulate tech-focused firms from the impact of the Covid-19 pandemic, as well as to attract further investment in the Eastern Economic Corridor development project’s seven special economic zones.
The Thai government continues to pursue its industrial policy, Thailand 4.0, which prioritises the country’s transformation into a digital economy. The strategy has made progress with various schemes underway, including at least 100 smart city projects that are expected to be created over the next two decades.
This report update includes the latest Telecom Maturity Index charts and analyses; an assessment of the global impact of the pandemic on the telecoms sector; the regulator’s market data updates to December 2021; telcos’ operating and financial data to 2021; and other recent market developments.
TOT Corp, CAT Telecom, True Corp, True Move, TT&T, AIS, DTAC, Thaicom, Triple T Broadband, AIS, DTAC, Cable Thai (CTH).
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