Thailand to increase number of MVNOs

Thailand's telecoms regulator recently outlined several urgent policies that would increase the number of mobile virtual network operators (MVNOs) as an alternative to the three mobile operators in the country.

Sarana Boonbaichaiyapruck, chairman of the National Broadcasting and Telecommunications Commission (NBTC), announced the One Region, One Mobile Virtual Network Operator (MVNO) scheme that would create four more MVNOs by 2026. The goal is to have one MVNO for each region.

Sarana said creating MVNOs for four regions can complement the mobile service provided by True Corporation, Advanced Info Service (AIS) and National Telecom (NT).

The NBTC also revealed plans to implement free access to state digital services nationwide by 2026 to enable Thais to use basic state services without Internet charges on their mobile tariffs.

With the entry of new regional MVNOs in the market, mobile subscribers in Thailand's provincial areas will pay less for their monthly connection. Quoting Sarana, the Bangkok Post reported that mobile tariffs in the rural areas are expected to decline by 20% between now and 2026.

However, questions remain whether the market can sustain the new MVNO entrants as incumbents AIS and True Corporation collectively serve over 96% of Thai mobile subscribers, according to reports.

Building a new MVNO ecosystem

The NBTC believes that a new MVNO ecosystem should create opportunities for new businesses, such as mobile virtual network aggregators and mobile virtual network enablers.

"An MVNO is not required to provide only basic mobile service in the mass market, as they cannot compete with larger rivals given the limits of economy of scale," he told the Bangkok Post.

He added that MVNOs can operate a variety of services based on mobile businesses, such as private applications to serve some business sectors.

Meanwhile, looking back at the history of MVNOs in the last ten years, industry observers cast doubts on the business feasibility of the new entrants. They pointed out that major operators are not keen to lease out their network capacity to MVNOs at a low rental fee – despite the NBTC's regulations that prohibit main operators from turning down these rental requests.

An MVNO does not have its own cellular network. It leases and resells capacity from a third-party mobile network operator at wholesale prices and resells it to consumers at reduced retail prices under its own business brand.

Sarana pointed out that the mobile market in Thailand has evolved and now offers more flexible opportunities for MVNO development.

For one, when the NBTC approved the True-DTAC tie-up as well as the merger between TOT and CAT Telecom that formed NT, it required those involved in these merger deals to reserve some network capacity for MVNOs.

Furthermore, the Thai telecoms regulator plans to limit the share major mobile operators can hold in each of the regional MVNOs to a maximum of 25%.