Fixed-line operators are turning their attention towards developments in the broadband arena. With theresulting decline in demand for fixed-line services, due to the popularity of cheap mobile services,operators are investing heavily into broadband as a means of offsetting the losses from fixed line. Themajor three operators TOT, True and TT&T are to invest billions of Thai baht over the coming one totwo years largely centred on network deployments and upgrades.
In BMI’s newly expanded fixed-line and broadband section of this report, we take a look at the strategiesof these three operators and their expectations of growth in the market. Demand in broadband is expectedto pick up in 2009, with the sector expanding by 123%, compared to 67% in 2008, as a result of not onlynetwork investments but also the launch of a number of broadband tariffs.
TT&T, owned by Jasmine International, is thought to have kick-started the war in broadband pricing.Offering its, and the market’s, lowest tariff at THB590 per month for access to its 3MB service, theoperator aims to see its broadband subscriber base reach 700,000 by YE09, up from the 400,000subscribers announced at the end of 2008, which fell short of its target of 500,000. Rival operators havealso launched new broadband tariffs in early 2009. True focused on offering higher download connectionspeeds, while TOT announced a promotion running until June 2009, to subscribe to internet speeds of512Kbps/256Kbps at a cost of THB1,880 per month on a national level via satellite link up.
At the end of March 2009, there were around 1.7mn broadband subscribers compared to the estimated1mn reported at the end of 2008. BMI estimates that by the end of 2009, the number of broadbandsubscribers will have reached 2.23mn, which would reflect a penetration rate of just 3.4% offering ampleroom for potential growth in the sector.
Revisions to Thailand’s mobile forecasts have also been made this quarter. At the end of 2008, there werearound 61.819mn subscribers, which was not far off our own expectations of 61.934mn. Penetration ratesreached 96% of the population, and growth is slowing. By 2013, penetration will have reached 148%.Although we see demand for mobile slowing, it still reported growth of 17% in 2008, largely due to thenumber of prepaid promotions flooding the market, as operators sought to gain new subscribers.
Over 2009, the emphasis will increasingly turn towards 3G. The National TelecommunicationsCommission (NTC )has said licences will be awarded in 2009 - although this is still pendingconfirmation and with the deadline shifting. That said, it will enable operators to challenge the fall inARPUs they have experienced as a result of their high prepaid subscriber mixes.
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