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(Last updated: 13 July 2007)
Trends and opportunities
The market
Thailand’s information and telecommunication technology industry faces a number of challenges as it enters a further period of liberalisation.
Basic telecommunication services in Thailand are operated by TOT Public Company Limited and the Communications Authority of Thailand (CAT). Initially the monopoly government agencies were responsible for domestic and international services, respectively. The agencies are now corporatised, and will eventually be privatised, and compete in nearly every facet of the industry.
The government has removed regulatory responsibilities from TOT and CAT. That task has been given to the National Telecommunications Commission (NTC). The NTC has struggled with historical, legal and regulatory issues as it has attempted to provide the framework for free and fair competition in the areas of licence fees, tariffs for airwave frequency usage, interconnection charges, number portability and consumer protection.
Under build, transfer, operate schemes private companies develop telecommunication infrastructure and then transfer ownership to the government in return for concessions to operate services while paying a percentage of revenue as a royalty fee.
The historical inequality of royalty fee percentages paid by various private companies is an issue in regard to competition on a level playing field.
Thailand mobile phone penetration rate is anticipated to grow over 50 per cent in 2006 (30+ million mobile phone users) compared with growth of 35 per cent in 2005.
The significant growth in mobile phone use has strained network capacity. TOT and CAT have taken short-terms measures to alleviate the problem but issues will continue to emerge as demand in both wireless voice and non-voice communications increases. It is projected that non-voice communications alone will increase by 30 per cent in the next 12 months.
Thailand’s Internet penetration was about 12 per cent in 2005 (representing around seven million subscribers), a lower percentage with a slower growth rate compared to neighbouring countries.
Overall, market conditions are fluid due to the introduction of new technologies, aggressive activity to secure market share and market position, regulatory review, public private infrastructure development, foreign competition and ownership policy.
Opportunities
High priority needs/opportunities for Thailand’s telecommunications sector include:
1. Fixed line
- Prepaid card technology
- Intelligent Network (IN)
- ISDN terminal equipment
- SDH equipment
- Fibre-optics/cables and technologies
- Call/customer management systems
- Various telecommunications equipment
2. Internet/e-commerce
- Vonvergence technology
- Voice over Internet Protocol (VoIP)
- Software and Internet security
- E-commerce training and consultancy in business-to-business
3. Mobile/wireless
- Intelligent Network
- wireless application protocol technology
- Digital mobile base stations and related equipment
- Paging transmitting and tracking systems
- Convergence technology – 3G
- Transmission networks
- Data/network services and management
- Consultancy and project management
4. Information technology
- Software application
- Business intelligence solutions
- Professional training
- Networking and telecommunication software
Competitive environment
The largest private operators providing mobile phone services are Advanced Info Services (AIS), Total Access Communications (DTAC) and Orange. AIS is the market leader with a 65 per cent market share although the smaller operators, DTAC and TA Orange, are responsible for 70 per cent of new sales.
Aggressive customer acquisition campaigns (nine out of every 10 new customers are acquired from a rival operator) focused on price are affecting margins and profitability.
Thailand’s wireless content and applications market, serviced by hundreds of businesses, is growing at an estimated 30 per cent per annum. The majority of demand is for entertainment and information application services.
Future trends in basic services such as local voice telephone services, telex, telegraph and fax will see significant competition in areas including:
- Database access services
- Online information/data processing services
- Telecommunications equipment sales and consulting services
- Videotext
- Teleconferencing
- The domestic leased lines circuit
The basic services have limits on foreign equity of up to 20 per cent, while for value-added services; the foreign equity can be up to 40 per cent. However, all these commitments are subject to law amendments and approval from the Parliament.
The main competitors in this sector are from the USA, Europe, Japan, Singapore and North East Asian countries.
The number of Internet users in Thailand increased from five million to six million in 2005. As a result, the use of international bandwidth is set to increase substantially.
There is fierce competition between Internet service providers, with most engaged in aggressive promotion campaigns to attract subscribers. The Ministry of Information and Communication Technology has plans to expand the number of high speed broadband Internet ports with the expectation that a rapid take-up of broadband Internet will take place.
Competitive opportunity for Australian suppliers in this sub-sector includes:
- Broadband network and equipment
- Value-added applications for broadband Internet
- Digital contents, web services and multimedia
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