3/3/2011
NBTC
NTCTHAILAND
THAILAND
Session 10
Market and price regulation
development in Thailand
1
NBTC
NTCTHAILAND
THAILAND
Agenda
Telecommunication sector role in Thai economic
Development of Thai telecommunication markets
Price regulation development
Toward convergence sector
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3/3/2011
NBTC
NTCTHAILAND
THAILAND
Telecommunication sector role in
Thai economic
3
NBTC
NTCTHAILAND
THAILAND
Telecoms sector plays vital role in Thais economic
Telecoms service is necessary services
Consumption in Telecoms contributes 0.12% of GDPs
In(GDP) = 12.65 + 0.12ln(Private Telecoms expenditure)
4.16 % of Total expenditure spend in telecoms sector
Telecoms contribution 3.73% of total GDP
4
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3/3/2011
NBTC
NTCTHAILAND
THAILAND
Thais consume Telecoms service more
Ratio of Telecommunications Expenditure to
Total Annual Private Consumption Expenditure
5.0
4.5
4.16
4.0
3.5
3.0
2.5
2.0
1.5
1.89
1.0
0.5
0.0
Growth rate 1993-2009
- Private consumption expenditure: 63.21%
- Post&Telecom expenditure: 268.10%
Average growth per year
- Private consumption expenditure: 3.22%
- Post&Telecom expenditure: 9.02%
Source: NESDB
NBTC
NTCTHAILAND
THAILAND
Market development - Growing
Telecommunication Sector
6
3
3/3/2011
NBTC
NTCTHAILAND
THAILAND
Mandatory Infrastructure couple with 93% coverage
7
NBTC
NTCTHAILAND
THAILAND
Fixed line market status quo
Population penetration
Household penetration
37.83%
40%
35%
30%
25%
20%
15%
10.28%
10%
5%
0%
2003
2004
2005
2006
2007
2008
2009
2010
8
4
3/3/2011
NBTC
NTCTHAILAND
THAILAND
Mobile Penetration has Increased Markedly
Pre-Paid
Post-Paid
10.73%
100%
80%
60%
93.43%
40%
20%
1Q02
2Q02
3Q02
4Q02
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
0%
9
NBTC
NTCTHAILAND
THAILAND
Broadband Market also Expand Rapidly
3'000'000
2'672'573
2'500'000
2'000'000
1'500'000
1'000'000
500'000
-Broadband subscriber @ 2010: 2.7 million subscribers
- Population penetration:3.99%
- Household penetration: 14.70%
3Q10
2Q10
1Q10
4Q09
3Q09
2Q09
1Q09
4Q08
3Q08
2Q08
1Q08
4Q07
3Q07
2Q07
1Q07
4Q06
3Q06
2Q06
1Q06
4Q05
3Q05
2Q05
1Q05
4Q04
3Q04
2Q04
1Q04
4Q03
3Q03
2Q03
1Q03
-
-Growth rate year on year: 28%
10
5
3/3/2011
NBTC
NTCTHAILAND
THAILAND
Huge opportunity in Broadband Market
Broadband subscriber
Fixed subscribers
8'000'000
6'876'852
7'000'000
6'000'000
5'000'000
4'000'000
2'672'573
3'000'000
- Broadband/ Fixed line: 38.86 %
- 62% of Fixed line waiting for new
investment
- Almost 4.2 million number is a room for
xDSL
investment
- Local loop unbundling have been announce
since November 2010
2'000'000
1'000'000
-
2003
2004
2005
2006
2007
2008
2009
2010
Broadband/Fixed lin
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
38.86%
32.67%
25.18%
18.10%
13.09%
8.14%
0.18%
2003
2.53%
2004
2005
2006
2007
2008
2009
2010
11
NBTC
NTCTHAILAND
THAILAND
Well facilities for the future
Domestic Bandwidth
International Bandwidth
800'000
700'000
600'000
500'000
400'000
300'000
200'000
100'000
Rapid Growth in one quarter during 3Q09 – 4Q09
- NIX: 127%
- IIG: 50%
1Q10
3Q09
1Q09
3Q08
1Q08
3Q07
1Q07
3Q06
1Q06
3Q05
1Q05
3Q04
1Q04
3Q03
1Q03
3Q02
1Q02
3Q01
1Q01
3Q00
1Q00
0
Current bandwidth
- NIX: 721 Gbps
- IIG: 158 Gbps
12
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3/3/2011
NBTC
NTCTHAILAND
THAILAND
Non-voice: the new revenue stream
16%
13.58%
14%
12%
10%
8%
Non-voice
revenue
185 m$
10.86%
Non-voice
revenue
152 m$
6%
4%
Voice
revenue
969m$
Voice
revenue
1,012 m$
2%
0%
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
- Non-voice revenue grew 16% in one year
- According to our research, non-voice service trend to be necessary service
13
NBTC
NTCTHAILAND
THAILAND
Thais ready to be information society
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
22'000'000
18'300'000
16'100'000
13'416'000
-
5'000'000
10'000'000
15'000'000
20'000'000
25'000'000
- Almost 35% of Thais is able to access to internet
- During 2000-2010, average internet user growth per year: 30%
- Recent year internet user growth: 20%
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3/3/2011
NBTC
NTCTHAILAND
THAILAND
Thais ready to be information society
Recently, Thais Facebook account is almost 8 million accounts
Mobile internet user is almost 12 million users in recent year
Skyrocket growth in smart phones (230% in last year)
Thailand is in rank 7 of Asia for Tweeter usage
Mobile non-voice revenue is very high growth and trend to be necessary
service in near future
Broadband is one of Thai Government agenda
15
NBTC
NTCTHAILAND
THAILAND
Price regulation development
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8
3/3/2011
Retail price regulation development
Maximum rate notification
Rate of
Return
Discretionary
Price cap
Deregulate
Present
Steps of regulation
(1) Regulate all telecom services
(2) Focus only basic services – Fixed, Mobile, International, Internet
(3) Focus on SMP operators
(4) Begin with ROR regulation to ensure cost-based and fair rates of early stage of regulation
(5) Moving toward price cap and deregulation approach
17
NTC THAILAND
Price trends in Fixed line service
Operators
TOT
Nation wide
Bangkok and Metro
TT&T
Regional
US$ per Month per Users
TRUE
ARPU
11.06
10.96
10.67
10.41
9.92
9.92
9.60
9.92
9.40
9.24
9.34
3Q2010
2Q2010
1Q2010
4Q2009
3Q2009
2Q2009
1Q2009
4Q2008
3Q2008
2Q2008
1Q2008
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3/3/2011
NTC THAILAND
Price trends in Mobile service
Voice services
0.080
Operators
0.060
3G
AIS
TOT
DTAC
i-KooL 3G
TRUE MOVE
365
HUTCH
i-mobile 3G
US$//Minute
2G
0.040
0.020
0.000
1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010
Postpaid
IEC 3G
MOJO 3G
Prepaid
Industry
Non-voice services
0.2
0.15
0.1
0.05
0
1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010
SMS (US$/Message)
MMS (US$/Message)
GPRS/EDGE (US$/Hour)
NTC THAILAND
Price trends in Broadband internet
Average rate
US$/Kbps
0.060
Operators
Narrow band
0.040
0.042 0.041
0.036 0.036 0.034 0.033 0.033
0.030 0.029 0.029 0.029 0.028
0.020
Broadband
0.000
TOT
105 licenses
1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010
TRUE
3BB
Year
Rate per
Month (US$)
2008
19.19
1 Mbps./512Kbps.
2009
19.19
2 Mbps./512Kbps.
2010
19.19
6Mbps./512Kbps.
Speed
10
3/3/2011
Wholesale price regulation development
TT&T
DPC
DTAC
True
move
AIS
CAT
Symmetric regulation
Level playing field
Negotiate based
Non-discrimination
Transparent
Equal treatment
Cost oriented interconnection
charge - LRIC
International best practice
TOT
True
Wholesale price regulation development
NTC
Network owner
Interconnection
seeker
Dispute Resolution
Committee
Submit RIO
LRIC based
NTC approve RIO
(90 days)
not
approve
approve
Announce
approved RIO
Request for
interconnection
Correct RIO
agree
Approve
Interconnection
contract
Negotiate base on
Approved RIO
(90 days)
Cannot agree
Dispute resolution
Submit Interconnection
Contract to NTC within
10 days
11
3/3/2011
Wholesale price regulation development
Interconnection charge ($US)
RIO (2006)
Interim (2010)
% decrease
Fixed
Termination
0.042
0.012
71%
Origination
0.100
0.016
84%
Transit
0.017
0.003
84%
Termination
0.036
0.017
53%
Transit
0.017
0.007
60%
Mobile
Standard LRAIC calculation
Efficient investment
Current cost
Economic asset life times
Annualisation methodology (Tilted annuity)
Suitable Opex and Common costs allowed
Wholesale price regulation development
IC and Access notification
IC
Access (LRIC)
Roaming
MVNO
IC and Access notification
(LRIC)
LLU
IC
Access (LRIC)
Roaming
LLU
Roaming
IC
(LRIC)
MVNO
LLU
Retail
minus
Costbased
MVNO
More specific regulation
Promote competition
Balance between reduce barriers to market entry and encourage investment in network infrastructure
Capture technology development and international best practice of regulation
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3/3/2011
NBTC
NTCTHAILAND
THAILAND
Toward Convergent Regulator
25
NBTC
NTCTHAILAND
THAILAND
Toward convergent regulator
Broadcast
regulator
NTC
Joint
committee
Telecom
regulator
NBC
NBTC
(Convergent regulator)
Spectrum
management
- NBC has not been establish since 2000
- NTC has been establish since 2004
- No new spectrum assignment for 10 years
- Broadcasting sector has not had
independent regulator
- All in one organization
- Spectrum management
- Telecommunication regulator
- Broadcasting regulator
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3/3/2011
NBTC
NTCTHAILAND
THAILAND
Q&A
Welcome to THAILAND
27
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