5 Oct 2011Thailand Broadband Overview

Thailand’s Telecommunications Act was adopted as law in 2000, but it was not until 2004 that the new telecom regulator was finally set up and working. Since then, despite considerable progress towards liberalisation, both foreign and local companies have been frustrated by delays in reform. In 2011 a range of deregulation issues still needed to be confronted, particularly with respect to defining the roles and the restructuring of state-owned incumbents TOT and CAT. This means that the critical task of concession conversion also continues to be unresolved.

After almost a decade of strong growth in its telecom sector, Thailand was hit by a serious economic downturn in 2009 as a consequence of the global financial crisis. At the same time, the country’s ongoing political problems were having a negative impact on the national economy with a significant downturn in investment. Fixed line development has been extremely slow despite government efforts to promote this, and with mobile penetration reaching 100 per cent by early 2009, there has also been a major slowing down in demand in the mobile sector.

While there has been good growth in the broadband market over the last few years, this has been from a relatively small base. Nevertheless, after a period of heavy dependence on dial-up, Thailand has finally been making a strong push into broadband services. This has been aided by the government’s efforts to promote DSL services. ISPs have also worked to recover their earlier reputation for unreliable performance, and some of the major players have been investing significant capital in their fixed-line infrastructure in support of data communication services. In addition, plans for a FTTH and FTTx network are currently in progress.

One of the biggest setbacks to the development of the broadband market in Thailand has been the failure of the regulator to hold a 3G auction and issue long-awaited telecoms licences. Licences were finally set to be issued in late 2010, but once again there were delays until Q1 2012 at the earliest. This has also stalled the BWA/WiMAX licensing process. One effect of all this has been that foreign investors are remaining cautious about the Thai telecom market. With mobile phones outnumbering fixed-lines by 9 to 1 in early 2011, when wireless licences are finally available, broadband penetration could see a significant surge.