Growth and competition strong in Thailand – but 3G auctions are the elephant in the room

Thailand’s strong mobile market presents a complex commercial environment, with its mix of state-owned companies and private operators functioning under a wide variety of corporate and regulatory structures and interfaces. The fixed-line and mobile sectors are examined in new analysis by Research & Markets.

There are three major fixed-line operators - one government-owned and two private. Despite the effort put into this segment of the market, fixed-line services are outnumbered by mobile phone services by a ratio of more than ten to one. Nonetheless, with a teledensity of 10% in 2010, fixed-line services remain an integral part of the telecommunications environment in the country.

Efforts by the Ministry of Information and Communications Technology to promote DSL broadband services, which it initiated in 2004, was to see the start of a potentially enhanced role for the copper network. While reasonably good infrastructure has been put in place to support data communication services, this segment of the market only began to experience significant growth during 2006/07 and coming into 2010 broadband internet penetration was still only around 4%.

In the meantime the mobile segment of the market continues to grow strongly, although not quite at the heady growth rates experienced a few years back. Competition became increasingly vigorous when two new mobile players - TA Orange (later to become True move) and Hutchison CAT - entered the market to challenge the entrenched duopoly of Advanced Info Service and Total Access Communications.

Two other operators, Thai Mobile and CAT Mobile, also entered the market in a confusing fashion and without causing much impact. By contrast, True Move (formerly TA Orange) had grabbed close to 24% of total subscribers by 2010. The local mobile sector has seen a sustained period of high competition involving heavy price-cutting as the battle for market share raged.

There is likely to be a push for consolidation, especially as the market gets closer to saturation. The government's reform of the sector, once finalised, should also have a major impact on the shape and direction of the market. The matter of the government issuing 3G licences has become a prolonged saga causing much angst in the local industry- but the end is in sight.

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