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DIGITAL MEDIA ACROSS ASIA

Thailand: Mobile Media Landscape

1. General Information

Among all the traditional mediums, mobile is most used in Thailand and one of the fastest growing in Asia. Mobile penetration far exceeds the Internet's 13% penetration.As of January 2009, around 90% of the 53 million subscribers use pre-paid services. Although the mobile market is huge in Thailand, most users continue to use basic phones.

[Key Data. Asia Pacific Telecom. Asia Pacific Telecom Research Ltd, 2007. 1. 27 May 2008]

[Key Data. Asia Pacific Telecom. Asia Pacific Telecom Research Ltd, 2007. 1. 27 May 2008]

Thailand: Mobile Media Landscape - DIGITAL MEDIA ACROSS ASIA

2. Mobile Phone User Population

[Mobile Telephone Services. Asia Pacific Telecom. Asia Pacific Telecom Research Ltd, 2007. 3-9. 27 May 2008]	The mobile market grows at a rate of 16.9% and the rate of mobile phone diffusion is 67.76%.

[Mobile Telephone Services. Asia Pacific Telecom. Asia Pacific Telecom
Research Ltd, 2007. 3-9. 27 May 2008]

The mobile market grows at a rate of 16.9% and the rate of mobile phone diffusion is 67.76%.

3. Mobile Penetration

Mobile penetration reached 89.5% at June 2008 as Thailand mobile operators are extending their service network into rural parts of the country. Most of this was led by growth in the prepaid market which made up more than 80% of the mobile market. Source: Thailand Telecommuncations Report Q1 2009	Source: Telenor study: Mobile communications contribute 393 billion baht to Thai economy, ThaiPR.Net

Mobile penetration reached 89.5% at June 2008 as Thailand mobile operators are extending their service network into rural parts of the country. Most of this was led by growth in the prepaid market which made up more than 80% of the mobile market.

Source: Thailand Telecommuncations Report Q1 2009

Source: Telenor study: Mobile communications contribute 393 billion baht to Thai economy, ThaiPR.Net

4. 3G Mobile

Only an estimated 1.3%of the mobile phone population subscribe to 3G phones. In fact, Economist Intelligence Unit has described the infrastructure in Thailand as being poor and expensive to maintain and build upon. The Thailand Government has recognized 3G as playing an important role in connectivity, especially when mobile phones will be used for high bandwidth intensive applications. To step up the effort, the government has awarded 3G licenses to some operators. Also, it has set aside $200 million USD for smaller companies providing 3G services. The next step is to set up Wimax areas to increase data transferred and connectivity.

[Thailand Telecommunications Report Q3 2007. Business Monitor International. London: Business Monitor International Limited, 2007. 17. 27 May 2008.]
[EIU IndustryWire - Forecast. Euromoney Institutional Investor Company. Economist Intelligence Unit Limited, The, 2007. 1. 27 May 2008 http://site.securities.com.libproxy.smu.edu.sg/do c.html?pc=TH&doc_id=158143186 ]
[EIU Business - Industry Overview. Euromoney Institutional Investor Company. Economist Intelligence Unit Limited, The, 2007. 2. 27 May 2008 http://site.securities.com.libproxy.smu.edu.sg/doc.html?pc=TH&doc_id=140725264 ]

5. Mobile Advertising Campaigns

	One of the marketing campaigns in 2008 brought across Thailand was for the launch of the blockbuster movie hit: Iron Man. Marketing for the movie included highly visually striking advertisements and also action-packed games for mobile phone users. The MobileLife website enables users to check updates on news, sports, weather, and even sign up for special promotions from their mobile operators.[10]
	In September 2004, Heineken launched a mobile marketing program, using a point collection system whereby consumers would receive points for purchasing Heineken products that have a special embedded code in them. Users had to SMS the product code (which can only be used once) and they were rewarded with points. When enough points were collected, consumers could redeem the points for gifts, discounts on Heineken beer, and qualify for lucky draws. After the 2-month campaign was over, Heineken reported that it received a participation rate in excess of 17%, which was likely to have been the highest measured rate in Thailand at that point of time.[11]

One of the marketing campaigns in 2008 brought across Thailand was for the launch of the blockbuster movie hit: Iron Man. Marketing for the movie included highly visually striking advertisements and also action-packed games for mobile phone users. The MobileLife website enables users to check updates on news, sports, weather, and even sign up for special promotions from their mobile operators.[10]

In September 2004, Heineken launched a mobile marketing program, using a point collection system whereby consumers would receive points for purchasing Heineken products that have a special embedded code in them. Users had to SMS the product code (which can only be used once) and they were rewarded with points. When enough points were collected, consumers could redeem the points for gifts, discounts on Heineken beer, and qualify for lucky draws. After the 2-month campaign was over, Heineken reported that it received a participation rate in excess of 17%, which was likely to have been the highest measured rate in Thailand at that point of time.[11]

6. Regulations & Legality Issues in Thailand

The governmental has created regulatory body, National Telecommunications Commission (NTC) to oversee all mobile telecommunications issues, regulating both telecom and broadcasting. However, there has been some on-going discussion. Not only has the NBC not been formed yet, there is considerable debate if the formation of NBC is beneficial.

Some problems experienced as a result of the lack of a regulatory body are:

Concessions
No scheme in place to deal with interconnection payments between operators
Introduction of an excise tax on operators in lieu of the payments made under the concessions to TOT and CAT

A number of attempts were made from 1995 onwards to introduce a telecommunications law to provide the regulatory framework within which the industry could be liberalized and de-regulated. After a number of delays, the law was enacted in October 2001, and contains the following provisions:

Privatization of State Regulators

Both TOT and CAT to be privatized, thus putting them on a similar footing to other operators. The key features of this provision were: – the two agencies to be made into companies and placed in a new holding company owned by the finance ministry – strategic partners to be offered 25% of shares in the new companies – the general public will be offered 20.1% of shares in the new companies – employees to be allocated 3% to 5% of the shares – the government to retain a maximum of 49.9%.

Establishment of a Regulatory Body

National Telecommunications Commission (NTC) is to be established with seven members chosen from 14 nominees by a 17-member selection committee. Numerous problems have been encountered in establishing the NTC. In February 2002, the Administrative Court ruled that the proposed selection process was unconstitutional and thus invalid. In January 2003 the Supreme Administrative Court ruled against an appeal of that decision. The problems stem from the fact that the main telecom players were using their political influence in trying to gain representation on the selection committee, thus to influence the subsequent membership of the NTC.

Foreign Ownership
The new telecommunications law, Telecommunications Business Act 2001, stated that the level of foreign ownership of telecom companies cannot exceed 25%. The clause was inserted towards the end of the legislative process, shortly before the bill went to parliament. However, it caused an anomaly since a number of the existing telecom companies were already more than 25% foreign-owned. Criticism of this provision also centred on the fact that such a reduction in foreign ownership is contrary to the spirit of industry de-regulation. Subsequently, the limit was raised to 49%. The current 2006 Act does not prohibit indirect foreign control of Thai telecommunication companies.

Source: The National Telecommunications Commission

7. Mobile Consumer Behavior and Trend

The growth of mobile phones has reached a level where most people are expected to own one. Both the sizes and prices of mobile phones have become more affordable. Hence, in Thailand, people of all status from daily-earning labourers upwards can afford a mobile phone. Daily-earning workers are replacing the use of normal lines with prepaid mobile phones, since they are able to control their expenses more effectively.

For consumers, mobile phones serve as both a necessity and a luxury.

An interesting research done by Euromonitor showed that mobile phones have led to emerging social problems amongst teenagers. This has driven them to prostitution or drug peddling as means to finance their phone expenses.

Small groups of young high-income consumers are also finding new ways to differentiate themselves, with the possession of highly priced mobile phones(Ie the launch of the high end Nokia Vertu handphone).

The growth of the telecommunications sector, the usage of mobile phones, the increase in international outgoing calls and increased number of national telephones corresponds with the economic development of the nation. In the period between 1990 and 1995, Thailand was halfway through a robust growth era, so the highest increase was seen during this period. For instance, mobile phone users were estimated to have grown 20 times, or 2,000%, during that 5-year period. All other indicators increased by over 100% in the same period, as an indication of the boom at that time.

8. SWOT Analysis of Mobile Media Landscape in Thailand

Strengths	Weaknesses
The country boasts multiple operators in fixed, mobile and internet subsectors. The formation of NTC has brought much-needed regulation to the telecoms market, albeit slowly. Thailand’s telecoms environment includes such key strategic investors as SingTel, Telenor and Hutchison.	Ownership of the country’s leading mobile operator is in limbo, following the controversial sale of Shin (43% stakeholder in AIS) to Temasek and a subsequent change in government leading to the sale being put in question. Fixed-line growth is static, with no signs of recovery, especially as broadband substitution takes hold.
Opportunities	Threats
The broadband market is very dynamic and shows signs of huge growth opportunities, as True, TOT and TT&T turn to their broadband businesses, ahead of fixed-line telephony. The integration of services from operators such as True is likely to lead to content application synergies and closer tie-ups with content providers. The increase in popularity of non-voice mobile services should also lead to contract opportunities for vendors. 3G telephony could spark off the revitalisation of Thailand's wireless market, with operators increasing revenue streams from non-voice service. Interconnection fees offer operators relief to the aggressive price wars of late.	The fixed-line sector is stagnant. Political risk, and confusion over government amendments to the Foreign Business Act, could put off current efforts.

[(Q2 2007). Thailand Telecommunications Report. London: Business Monitor International Ltd.]

9. Competitive landscape in Thailand

*Note: TOT has 0.2% share but due to rounding up, it is reflected as 0% in the pie chart

The mobile phone industry was the fastest growing of all indicators, with the fiercest competition seen within this industry. Advance Info Service (AIS), the ex-Prime Minister’s (Thaksin Shinawatra) business, is the leading company in the mobile phone arena. The other major players are Total Access Communication Public Company Limited (DTAC), and True Move Telecommunications There have been volatile changes in the promotions by these companies to win customers, as there is still a high potential in this area in future. The number of mobile telephone users increased from 63,000 in 1990 to reach over 48 million users by 2003, an unbelievable change of almost 760 times.

[Mobile Telephone Services. Asia Pacific Telecom. Asia Pacific Telecom Research Ltd, 2007. 3-9. 27 May 2008]

[Regulatory Environment. Asia Pacific Telecom. Asia Pacific Telecom Research Ltd, 2007. 2-7. 27 May 2008]
[Telecommunication Industry. Euromoney Institutional Investor Company. ISI Analytics, 2006. 3-8. 27 May 2008]

References:

1. EIU Business - Industry Overview. Euromoney Institutional Investor Company. Economist Intelligence Unit Limited, The, 2007. 2. 27 May 2008 http://site.securities.com.libproxy.smu.edu.sg/doc.html?pc=TH&doc_id=140725264.
2. EIU IndustryWire - Forecast. Euromoney Institutional Investor Company. Economist Intelligence Unit Limited, The, 2007. 1. 27 May 2008 http://site.securities.com.libproxy.smu.edu.sg/doc.html?pc=TH&doc_id=158143186
3. Thailand Telecommunications Report Q3 2007. Business Monitor International. London: Business Monitor International Limited, 2007. 26. 27 May 2008
4. Thailand Telecommunications Report Q3 2007. Business Monitor International. London: Business Monitor International Limited, 2007. 17. 27 May 2008.
5. Regulatory Environment. Asia Pacific Telecom. Asia Pacific Telecom Research Ltd, 2007. 2-7. 27 May 2008.
6. "Thailand: Demographics." Social Media and PR Across Asia. 27 May 2008 http://comm215.wetpaint.com/page/Thailand%3A+Demographics.
7. Telecommunication Industry. Euromoney Institutional Investor Company. ISI Analytics, 2006. 3-8. 27 May 2008.
8. Key Data. Asia Pacific Telecom. Asia Pacific Telecom Research Ltd, 2007. 1. 27 May 2008.
9. Mobile Telephone Services. Asia Pacific Telecom. Asia Pacific Telecom Research Ltd, 2007. 3-9. 27 May 2008
10. Mobile Advertising Campaign Brings Interactive Ads to Phones across Thailand with... 4 June 2008
[11] Heineken engages Thai mobile users, Adverblog. 3 December 2008

[Regulatory Environment. Asia Pacific Telecom. Asia Pacific Telecom Research Ltd, 2007. 2-7. 27 May 2008]

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