Boston, MA -- (SBWIRE) -- 04/01/2013 -- BMI View: Thailand's telecoms market is characterised by a mobile market approaching saturation, a fixed market in decline since 2007 and a very low broadband penetration rate. While growth opportunities exist, particularly in the broadband sector, the heavy degree of state control and ineffectual regulation of the telecoms sector to date, coupled with political uncertainty and the economic fallout from the 2011 floods and weak global economy, do not, in our view, present a favourable investment climate.

Key Data

- Mobile subscriber growth has slowed considerably, although strong competition in the newly opened 3G market appeared to lead to an abnormally high number of net additions in Q412. We foresee 3G/4G cannibalising the existing mobile user base, rather than adding new customers.
- Price competition is exerting downwards pressure on mobile ARPU and, although subscriber mixes are improving, there is a high proportion of prepaid customers, which weighs on ARPU growth.
- The broadband market supports three competitors but requires significant investment in infrastructure if penetration is to beat our current forecast of 7.7% by 2017.
- The fixed-line market is stagnating and we expect it will decline by an average of 3% annually over the forecast period, bringing penetration to 7.6% in 2017.

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Key Trends And Developments

The government and the regulator have shrugged off criticisms that the auction of 3G licences in October 2012 - which saw existing operators True, AIS and DTAC secure new concessions - was compromised by collusion among bidders and unrealistically low starting prices. The auction raised THB41.7bn (US $1.36bn), just 2.8% above the government's reserve price and 30% lower than the regulator had anticipated. The operators are now in possession of their licences and are pressing ahead with plans to launch services later in 2013.

Meanwhile, the regulator is amending aspects of the regulatory system relating to pricing of mobile services and charges associated with the termination of calls on and off the mobile networks. Reduced costs will give the operators more leeway in investing in new infrastructure and developing new locally relevant content, applications and services, which will be crucial in establishing the new 3G networks and encouraging consumers to spend more on non-voice products.

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