Licensing and regulatory issues for 3G in Thailand should be sorted out within the next couple of years. However, the real disruptive force that will sweep across the Thai telecommunications industry is not 3G or any other technology, but rather, innovative new Google-like business models and convergence, according to Gartner.
Nick Ingelbrecht, the research company's vice president for research, said that over the last 10 years, Thailand has enjoyed a very high level of mobile phone penetration, especially in the context of prevailing income levels. Even the International Telecommunication Union (ITU) has spoken of Thailand as being a showcase of how consumers leapfrogged the fixed line and went straight to mobile.
This is despite the regulatory uncertainty that prevails today. However, Ingelbrecht pointed out that the telecom industry, not just in Thailand, is intensely political and the regulation framework is simply a product of the political and cultural environment. And there are a few old scores to settle between the government and the various vested interests, both foreign and local, he added.
So how does that affect Thailand's roadmap to 3G? Ingelbrecht suggests that perhaps Thailand does not need a 3G network yet, and that waiting for more mature and affordable technology might not be a bad idea.
"What are you hoping to deliver on 3G that you can't already have on 2G?" he pointed out. "If you look at True's third-quarter results, you will see that fully 50 percent of their non-voice revenue is from the caller ringback tone. This is absolutely nothing to do with high-speed data."
If anything, Gartner figures suggest that the demand for data services in Thailand is very low compared to other markets, and the bulk of non-voice revenue is from ringback tones, ringtones and SMS (short messaging service).
Mobile data is still very much a niche market for nomadic business users.
This may be a blessing. The price performance of 3G networks has increased a lot since 2001, and the number of 3G capable handsets today is much greater and prices are falling.
The same logic applies to markets like China, which will only be pushing out 3G this year.
Rather than a real consumer-driven rush to 3G, Ingelbrecht said that the world today is a "land grab" by incumbents looking to reserve spectrum, which has the added benefit of making sure nobody else enters the market.
"One point that is often overlooked is the fact that a pure 3G network is cheaper to operate and maintain than a 2G network," he said. "On a dollar per bit per hertz, a fully-loaded 3G network is cheaper at providing voice."
Operators do not want to have to operate and maintain two separate networks, a situation which many early movers have ended up with, the analyst said.
Rather than introduce 3G in phases, it might be better to wait until the majority of handsets are 3G-ready before making the switch to 3G, he said, adding that low-end 3G handsets will only be available in the market this year.
In 18 months, Ingelbrecht said Thailand will have a big population of 3G phones and the industry will then have a much bigger incentive to switch.
Gartner also does not see Wimax as a competing technology to 3G any time soon.
Ingelbrecht said: "Today, Samsung has some first-generation mobile WiMax terminals, but these are very early days. Nobody has really solved the issues of battery life and processing power [and these are issues] that need to be worked through."
Rather, he noted that WiMax will make its way into PCs and even desktops, as an alternative to broadband, especially in the rural areas of Thailand.
"This side of 2010, you are talking about a very niche market in terms of mobile WiMax take-up," he said.
"3G itself is still evolving. Today we have HSDPA (high-speed downlink packet access) and HSUPA (high-speed uplink packet acess), plus there is this huge industry behind 3G," he added. "On the other hand, support for WiMax is very ambivalent with each company having a different vision. Only Motorola and Alcatel-Lucent see WiMax as a near-term business opportunity as they have some IP (intellectual property) they believe they can leverage."
So what is the next big thing? Ingelbrecht thinks that rather than supplant cellular, VoIP (voice over Internet Protocol) is already starting to become an added service that many telecom operators offer their customers as an option.
"We're already seeing some mobile carriers offer VoIP as an add-on service. It becomes part of the feature set. It's not disruptive," he said. Rather, the Gartner analyst expects to see innovation in business models and the rise of user-generated content as a big driver for the telecommunications industry in the future.
Already, Google has been talking about mobile services being offered for free in exchange for people accepting a certain amount of advertising in the handset in exchange for voice services.
In this area, Ingelbrecht said that True was already leading the world with its converged services. People want to access their services, mobile and fixed-line, seamlessly. They want to download their music, listen to that music on their mobile, put it on their PC, upload it to their portable audio player and use it as their needs require--rather than as the network requires, he said. Ingelbrecht added that he expects other mobile operators to follow True's lead toward convergence in the near future.
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Well first of, 50% of True customers as referred to in the article is only 3 million out of 35 million mobile subscribers in Thailand so under 10% of the total subscriber base.
Secondly the question is not only to look and think about 3G as pure mobile and thinks as Thailand as only Bangkok and tourist areas.
3G would come very handy as a access point to the internet, not only for mobile phones but also for computers in rural areas not covered by landlines.
Sure there is access via GRPS today but at a lousy speed and with the net having a uptime around 60%.
Remember most access to the internet is still via dial up modem today in Thailand not ADSL!
The 3 major telcos gain a lot on Value added service “data” so much that many have shifted focus to that business area within the last year and predicts further revenue on VAS for this and next year.
For most of the telcos VAS account for 10-15% of total revenue. So yes 3G would come in handy in that regard and don’t say the market is low or only callback and SMS. The VAS market – and this is not some Gartner prediction was 450 million baht last year (38 baht to one dollar). Do not forget that Thailand is a developing country and is neighbors already have or will get 3G this year (Cambodia, Laos). The way Thais communicate is a lot different from other cultures in Europe or the US in Thailand we use the mobile phone to communicated indirectly (not talk) and as so a 3G service with video and “broadcasting” would be very handy.
The main telco in Thailand AIS still use WAP wml as their main distribution channel and forces others to do same if they want to distribute to their 16 million customers.
So yes 3G would be a warm welcome in Thailand instead of GPRS 2.5
Posted by anonymous on Monday, February 12 2007 04:31 PM