Telecom Market Brief

Market Overview:

Despite the global economic crisis and the uncertain local political situation, telecommunications industry insiders predict minor impacts to the Thai market due to an influx of new technology and the subsequent demand. In 2009, 3G and WIMAX will be the key drivers of the local ICT industry. Currently, telecom service consumption contributes 3 percent of Thailand’s GDP. Once 3G service is available, investment of approximately $ 1.5 billion is projected to flood into the market within the next three years.  The 2007 Thailand Information and Communications Technology Market Survey projected that the market for IT products and services would reach $ 18 billion in 2008, representing 13.1% growth over the prior year. Telecommunications accounted for 72% of the total ICT market, followed by computer hardware, computer software, and services, respectively.

With respect to the telecommunications sector, currently Thailand has a mature 2G market, dominated by GSM technology, with 60 million subscribers or a 95% penetration rate (as of December 2008). The figure is expected to reach 100% by the middle of 2009. In addition, the cellular market value is expected to reach $ 6 billion by the end of this year. Strong competition among telecommunications operators will remain strong in the coming years, highlighting the need to enhance existing networks and to prepare for 3G technology. For example, DTAC, the country’s second-largest mobile operator, has set aside $ 360 million for expanding its existing 2G network in 2009. The company also plans to spend $400-500 million on its third-generation (3G) network this year when the license becomes available.

In terms of the Internet sector, the market was worth more than $322 million in 2008, and the overall Internet penetration rate is expected to reach 15% by the end of 2009. According to the Thailand Internet Service Provider Association, this means that five to ten million Thais will be using the Internet next year. High-speed broadband Internet alone is likely to grow by 30% to 1.3 million subscribers (from 750,000 in 2007) in a market worth $161 million in 2008. Dial-up Internet demand will continue to decline due to more affordable broadband services.

3G Wireless Licenses Status:

In February 2009, the Board of the National Telecommunications Commission (NTC) concluded that 3G spectrum licenses will be granted via an auction, which is considered the most transparent process. In addition, the NTC plans to award 3G licenses on 45 Megahertz of its 2.1 GHz spectrum in the third quarter of this year to boost domestic investment, especially in the area of 3G infrastructure and content.

However, the significant details, including number of licensees and applicant qualifications, have to be finalized. The NTC plans to launch 3G services for commercial use by the middle of 2010. Additionally, only Thai registered company is allowed to obtain 3G license service awarded by NTC.

Doing Business in Thailand:

U.S. exporters are highly encouraged to appoint a local agent to manage issues related to regulations, bureaucratic procedures, local business practices and marketing. To sell telecommunications equipment, foreign suppliers require a distributor to submit a type approval application to the National Telecommunications Commission.  

Government Requirement:

Import licenses and type approvals are required by the NTC prior to importing telecom equipment, including equipment for fixed-line operation, cellular phones, cordless phones, wireless LAN equipment, switching networks and base station equipment, which has not been granted a license for those purposes. Only Thai citizens and companies registered in Thailand may submit requests for type approvals. Foreign suppliers must appoint a local agent or distributor to submit a type approval application to the Commercial Service Section of the Radio Communication Licensing Division of the National Telecommunications Commission.

References: 

• The National Telecommunications Commission

           87 Soi Sailom Phaholyothin Road, Payathai BKK 10400

           Tel: 662-290-5203 

• Ministry of Information and Communications Technology

          89/2 Moo 3 TOT Public Company Limited

          Building 9, ICT 2 Floor, Changwattana Road

          Laksi, Bangkok 10210

          Tel: 662-568-2589

 

Companies interesting in learning about the opportunity in the telecommunication sector in Thailand, please contact: Oraphan  Boonyalug, Commercial Specialist,  at oboonyal@N0SPAM.mail.doc.gov ; phone: 662-205-5090, fax: 662-255-2915 or visit our website: http://www.buyusa.gov/thailand.