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Thailand Telecommunications Report Q1 2011
Business Monitor International, Dec 2010, Pages: 112
The Thailand Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Thailand's telecommunications industry.
There have been only minor changes to some of BMI’s forecasts for the Thai telecommunications this quarter, due to a paucity of new data from the country’s operators. After incorporating the latest figures from the National Telecommunications Commission (NTC), which we believe that has better contact with the smaller operators in the country, we have revised our ARPU forecasts slightly upward, while retaining our forecasts for the mobile, fixed-line and internet sectors. In addition, we have extended all of our forecasts until 2015.
The most significant development in the Thai telecoms market has been the collapse of the 3G auction in September 2010. Thailand remains one of the last Asian markets yet to fully adopt 3G technology, and subscriber growth for mobile operators is expected to be restricted in the short to medium term, as the mobile market approaches saturation. The auction was agonisingly close to commencement before the Thai court issued an injunction, with the consequent suspension of almost all of the NTC’s operations, due to uncertainties surrounding its legal authorities and responsibilities. BMI recognises that the Thai government has been notoriously fickle when it comes to ICT development, often spending several years developing ambitious improvement schemes, only to have those projects neutered or cancelled due to conflicts of interest at the political level. A national broadband network (NBN) scheme, aimed at creating a single broadband platform with uniform access and traffic carriage solutions that would make charging for services more affordable and transparent to consumers. It is a worrying notion that service providers could meet the same fate as the 3G auction if the government is unable to sort out its regulatory framework.
Meanwhile, Hong Kong-based Hutchison Whampoa looks set to remain in Thailand's telecoms industry after it said it will not sell its stake in its joint venture – Hutchison CAT Wireless Multimedia (HCWM) – with CAT Telecom for anything less than US$220mn. It was thought that Hutchison would lower its asking price to expedite its withdrawal from the Thai market after experiencing limited growth opportunities and strong competition. However, CAT is offering only THB4bn – reportedly less than the projected annual revenue of HCWM – instead of the previously agreed THB7.5bn, to gain full control of Hutchison's CDMA network that spans across 26 Thai provinces.
Thailand remains in 16th position in BMI’s latest Business Environment Ratings for the Asia region after there were no changes to the country’s individual scores. Despite political turmoil in the country, Thailand's economy continued to post solid growth in Q210. Real GDP growth beat expectations, coming in at 0.2% q-o-q (seasonally adjusted) and 9.1% y-o-y. That said, although the political situation is improving, we note that uncertainties remain in the long term. The government's decision to impose emergency rule in the country during the height of the political crisis further undermines investor confidence. We believe the risk of further political unrest in the coming years will deter investment in the country. Despite the government's announcement of new tax incentives for the tourism sector, we are concerned that businesses will delay investment decisions until the elections are over.
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