Interview: Suphachai Chearavanont
What is the outlook for mobile penetration in Thailand over the medium term? To what extent is growth in the data services segment outpacing the voice portion of the market?
SUPHACHAI CHEARAVANONT: Mobile phone penetration in Thailand, as measured by the number of active SIM cards in the market, exceeds 100%. This suggests limited room for growth. Similarly, revenue from the mobile voice segment has been increasing at a rate in the low-to-mid single digits, in line with population growth and economic conditions.
Revenue from data, on the other hand, has been growing at a double-digit rate over the past few years, due to rising demand for mobile internet services. Mobile internet usage surged after the launch of commercial 3G services by key players in the market, including TrueMove H, which is a reseller of CAT Telecom’s 3G+ services.
We believe that competition in the data services market is likely to be lower than in the voice market, as subscribers are looking for service quality and superior content, rather than focusing on price. Moreover, new features such as offering a convergence platform could play a bigger role when it comes to competition in the data market. That is, the ability to deliver pay TV, mobile voice, mobile broadband and fixed-line broadband services could be an important factor in meeting the ever-changing needs and demands of both residential and business customers. Offering 3G+ services and a next-generation broadband network also helps to attract more high-value customers.
How has the delay in rolling out 3G and other value-added services affected the telecoms market in Thailand? What is the outlook for further growth in the market for 3G services?
SUPHACHAI: The delay has had an impact on the plans of every operator, and more importantly it has affected the opportunity for consumers and businesses to access high-quality mobile broadband services. This is something that could hamper the country’s economic activity and competitiveness.
That being said, our expansion of TrueMove H’s 3G service is progressing, and we have seen strong demand for our 3G+ non-voice service. This product has been growing at a double-digit rate, and it is expected to continue to do so.
What are the current trends in average revenue per user (ARPU), and do you anticipate significant changes in the future? What can operators do to maintain or increase their ARPU levels?
SUPHACHAI: In the longer term, the level of ARPU will likely decline as businesses penetrate the lower-tier segment of the market. However, one way in which to sustain ARPU levels is to boost non-voice usage and up-sell content, such as applications for iPhones, iPads and other iOS devices.
Meanwhile, increasing adoption of smartphones and smart devices, such as tablets, encourages both existing and new mobile users to subscribe to post-paid data packages to meet their rising demands for data-rich content. This will also help boost the bottom line for telecoms providers.
For a foreign investor considering moving into the Thai telecoms market, what are the potential barriers to entry? Do you expect new entry or significant changes in market share in the future?
SUPHACHAI: The most significant barriers to entry in the telecoms market include the inefficiency in the enforcement of the infrastructure sharing rules, as well as the high regulatory costs, such as the BT1 ($0.03)-per-minute interconnection fee, a high upfront fee for the 3G 2.1-GHz auction and the new universal service obligation fee. Furthermore, an additional challenge for potential entrants is the complex laws and rules that regulate foreign investment in Thailand’s telecoms sector.
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