Mobile internet flourishing in Thailand, but still no 3G
Thailand’s mobile telecom and broadband markets are performing well and showing much potential despite the ongoing issues around 3G technology, according to two separate reports published this month.
Despite the lack of country-wide, public 3G mobile technology, Thais are amongs Asia’s most avid mobile internet users according to a report from research firm Nielsen, published in The Nation.
“Thailand is one of the very few countries that still has no commercial 3G network,” notes Aaron Cross, managing director of Nielsen Consumer division in Thailand. “However, thanks largely to the social media momentum, mobile technology is evolving at a rapid pace and the advent of Smartphones such as the iPhone and Blackberry is making it easier for consumers to access the Internet anywhere, anytime. Thai people’s willingness to embrace new technology, despite the lack of availability of high speed mobile data services, shows real potential in this space.”
However, before anyone suggests that the arrival of 3G might be somewhat inconsequential to Thailand based on this account, there is caution as Business Monitor International (BMI) warns that ARPU (average revenue per user) is set to drop leaving the countries mobile operators struggling to boost revenue – which can have knock-on effects for mobile phone users.
Details of the BMI report come from Developing Telecom:
Perhaps the most pertinent issue in Thailand’s telecoms industry is the ongoing 3G saga, which has not shown significant signs of positive developments…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.
Indeed results from operators suggest that the need for 3G is clearer than ever before
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.
There is more negative news, this time around internet access levels where Thailand is amongst the lowest in the region. More information via The Nation article citing Nielsen’s report:
[Thailand] has one of the lowest levels of overall Internet penetration in SEA. Less than one third of Thailand’s population aged 15+ (31 per cent) use the Internet, seven percentage points lower than the SEA regional average of 38 percent…Internet penetration in Thailand is lowest amongst those aged 50+ where only seven percent of consumers are online.
The country’s digital divide is marked and will be well known to regular readers.
Not only is the hardware required for internet access out of the financial reach of many in the country, but long-term service contracts – which go against a culture of pre-pay billing – and poor infrastructure outside of urban areas are equally as preventative for many rural and semi-rural Thais.
Developing Telecom does report that Thailand’s broadband market is growing, however no figure is listed with BMI claiming that “the number of broadband subscribers… at the end of 2010 exceeded expectations” – which the firm accounts for based on aggressive marketing from ISPs like True.
Essentially the takeaway from both reports is that mobile internet is growing massively in Thailand, while fixed-line internet continues to under-service the country in comparison to its role in neighbouring countries.
While in the short-term 3G hasn’t stopped affluent or urban consumers using mobile internet via smartphones, it has held back the longer term potential of increasing the internet penetration outside of urban areas.
Many developing markets ‘leapfrop’ technology, such as skipping the use of the landline, because newer developments provide better and more convenient options. 3G could enable many Thais to leapfrop fixed-line internet by using wireless or mobile internet on a smartphone, tablet, laptop or PC… but for now that vision remains just that, an unfulfilled promise.
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