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Thailand Set for Broadband Surge

Catherine Haslam
News Analysis
Catherine Haslam
10/1/2009
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Thailand's upcoming award of 3G and WiMax licenses will give a boost to Internet connectivity and challenge the country's existing broadband service providers, according to a new report from Pyramid Research .

"Thailand: Political Woes Stunt 3G Development" predicts that the imminent entry of 3G and WiMax players into the Thai telecom market will stimulate demand for broadband services and foster competition.

And the report was published just as the Thai authorities announced plans for a December spectrum auction. (See AsiaWatch: Unicom Preps iPhone Launch.)

The award of such spectrum should help bring more Internet services into the Thai market and relieve the significant pent-up demand for mobile broadband access identified by the report's author, Pyramid Research analyst Tae Hyung Kim.

He predicts that the three incumbent fixed players -- TOT Public Co. Ltd. , True Corp. plc , and TT&T -- will be forced to lower their tariffs and boost network access speeds to compete with the new entrants.

As things stand, the fixed providers are getting an Average Revenue Per Subscriber (ARPS) of about $20 per month, which, the report states, is on par with South Korea, where connections are much faster and GDP per capita considerably higher. Kim states that this has helped push Thai consumers toward mobile Internet services on GPRS and EDGE. He further predicts that 16 percent of mobile subscribers will be regular users of mobile Internet services in 2009, even without 3G.

That would amount to a considerable number of users, as mobile penetration stood at 92 percent of the estimated 67 million population at the end of 2008, and is expected to exceed 100 percent by the end of this year. And according to the report, that trend toward mobile data usage should also make it easier for operators to market mobile broadband services and the 3G devices that enable them.

On the back of the increased competition that 3G and WiMax are expected to bring, the report predicts that fixed broadband penetration will reach 9.6 percent of the population by 2014, up from just 2.2 percent in 2008. In technology terms, the main winner will be ADSL, which will raise its market share from 21 percent in 2009 to 48 percent by 2014. There will, though, also be fiber access broadband services available to some Thai users. (See Thai Telco Plans FTTx Rollout.)

However, fixed broadband services will still only generate about two thirds of the revenues that Pyramid expects mobile data to generate. Indeed, Kim predicts that mobile data service revenues will rise from $882 million in 2009 to more than $2 billion by 2014, driven largely by Infotainment services.

— Catherine Haslam, Asia Editor, Light Reading

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