Developing Telecoms | Mobile and broadband performing well in Thailand, but ARPU likely to fall

23 May 2012

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Mobile and broadband performing well in Thailand, but ARPU likely to fall

Wednesday, 06 July 2011 09:41 | James Barton

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Despite its constantly stymied 3G auctions, mobile penetration is high in Thailand, and broadband subscriptions are increasing faster than anticipated, according to new data from BMI.

The number of mobile subscribers in Thailand reached 71.621mn in December 2010, representing a penetration rate in excess of 100%, and muted growth in the industry is expected in light of market saturation. Meanwhile, the number of fixed-line subscribers in the country will likely fall to 6.579mn in 2011 as the fixed-to-mobile service migration accelerates. The number of broadband subscribers in Thailand at the end of 2010 exceeded expectations, which BMI believes was largely due to aggressive marketing campaigns by True Corporation (through TrueOnline) and Triple T Broadband.

Perhaps the most pertinent issue in Thailand’s telecoms industry is the ongoing 3G saga, which has not shown significant signs of positive developments. Although True plans to launch commercial 3G services by the end of 2011 after establishing an agreement with state-owned CAT Telecom, the agreement has attracted a legal suit from rival mobile operator Total Access Communication (DTAC). As the Thai telecoms industry has always been shrouded with legal tussles and regulatory uncertainties due to a complicated and inflexible legal framework, this development is unsurprising. While it remains to be seen if the issue could be resolved amicably and quickly, it is clear that nationwide 3G services could provide a significant boost to operators’ profitability.

Although Advanced Info Service (AIS), DTAC and TrueMove saw their ARPU in Q4 2010 rebound after declining in the first nine months of 2010, this improvement was likely temporary in nature due to seasonality factors. Operators generally experienced stronger ARPU levels in the final quarter of the year in the past few years. Suspicions were confirmed after DTAC released its Q111 results, which saw its blended ARPU continued to trend downwards. Delays in the launch of 3G services would likely apply further downward pressure on ARPU levels.

Thailand’s private consumption growth is expected to reach 5.0% in 2011, and consumer spending is expected to remain robust, which bodes well for the country’s telecoms industry. Data from the Bank of Thailand (BoT) indicated that nominal wages rose by 13.7% y-o-y in November (10.9% in real terms) 2010, and average wages have already pushed passed pre-crisis highs.

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