Economic Update

As the government sharpens it focus on ICT, a digital drive is taking shape in Thailand, underpinned by plans that include incentives for investors and improved communications infrastructure.

While the push to accelerate ICT development in Thailand remains at an early stage, several key targets have already been announced, including plans to extend internet access to all households and businesses by 2017 and boost storage capacity.

Speaking at a seminar in January, Pridiyathorn Devakula, the deputy prime minister in charge of economic affairs, described the digital economy plan as a key element of the government’s policy agenda. The authorities will provide the tools needed to strengthen Thailand’s ICT backbone, while also improving soft infrastructure, legislation and regulations governing the sector. “Our government is planning to work with the private sector to develop hard infrastructure, such as a national broadband network, spectrum to provide 4G wireless broadband, the establishment of a national government data centre and an increased number of international internet gateway facilities,” he told participants.

Boosting infrastructure provision and doing more to attract investors will lead to greater productivity and provide more equity in terms of opportunities, Devakula added.

Draft legislation paving the way for Thailand’s digital economy policy to be drawn up has already been approved, with a bill due to be passed by the National Legislative Assembly in the spring session. Measures include the establishment of a ministry responsible for promoting digital technology, with initial policy proposals to be handled by an ad hoc committee.

New opportunities

The government is keen to harness private sector investment as part of its digital expansion. In March, an advisor to the committee drafting digital policy, Djitt Laowattana, told reporters that overseas investors teaming up with Thai businesses to establish internet data centres would be offered tax incentives. Estimates suggest the data hubs, needed to boost storage capacity, will require around BT30bn ($920m) of investment, according to Laowattana. “Every industry is moving to use IT services, which will drive our country’s business value,” he said.

The increased focus on ICT is likely to spur sales of hardware and software, creating more opportunities for service providers along the supply chain. Some estimates suggest sales of new devices, including smartphones, PCs and tablets, will expand by around 4% this year, though other analysts expect higher growth on the back of rising demand sparked by the government’s digital drive. Forecasts also anticipate strong sales growth in regions away from major hubs, as connectivity improves and small and medium-sized enterprises look to capitalise on the digital agenda.

Fast-tracking 4G

Long delayed, the auction of 4G spectrum licences will form a cornerstone of Thailand’s drive to boost ICT capacity, expanding the reach of wireless broadband for the internet and supporting high-speed data transfer. The government is keen to fast-track its auction of 4G spectrum licences, though the regulatory agency, the National Broadcasting and Telecommunications Commission (NBTC), has already said that the process is unlikely to be completed before December, 2015.

The military-backed government took a decision to delay the original auction for spectrum in the 1800-MHz bandwidths last year. In early March, the information and communications technology minister, Pornchai Rujiprapa, said he was confident that the auction would be held before the end of summer, echoing forecasts made by Devakula one month earlier. “As far as I know, the NBTC can take six months to launch the auction, since it has already prepared the auction plan,” Rujiprapa said.

On March 9, the NBTC announced plans to extend the proposed auction of bandwidth in the 900-MHz spectrum, offering 20 MHz of bandwidth instead of the 17.5 MHz originally proposed. The increased bandwidth is expected to heighten investor interest in the auction by providing greater capacity to meet wireless internet demand, further strengthening Thailand’s digital drive.