Thailand to ramp up national broadband services

Increased investment in communications infrastructure aimed at achieving nationwide broadband coverage is under way in Thailand.

In mid-January the government announced plans to invest BT38bn ($1.1bn) in strengthening the country’s broadband backbone, extending access across Thailand and increasing data speeds by more than 400%.

This comes alongside plans to expand 4G services, following spectrum auctions for the 900-MHz and 1.8-GHz bands conducted late last year.

Financing the fibre

According to government officials, BT20bn ($561.6m) of the funding will come directly from the Ministry of ICT (MICT), with the rest to be taken from the universal service obligation budget of the National Broadcasting and Telecommunications Commission (NBTC), a fund reserved for ensuring minimum nationwide ICT standards.

Of the MICT’s share, BT15bn ($425.6m) will be dedicated to improving rural connectivity, which has traditionally suffered from a lack of private sector investment. The remaining BT5bn ($141.9m) will be earmarked to develop the government’s plan to channel internet traffic through a single gateway. The move has already received criticism from groups concerned with undue state control of web traffic and the potential for government restrictions on foreign websites, news or information.

The first phase of the project is expected to begin in March, according to state officials, with the second phase to be inaugurated in 2017.

The MICT plans to source its funding from recent 4G spectrum auctions, which raised a record BT232.7bn ($6.6bn) through the sale of four licences in late 2015.

However, media reports indicate a new 900-MHz auction could be called if one of the bid-winners, Jasmine International, is unable to secure funding for the sale. The telco has until March 21 to make its first payment.

Expanding rural access

Among the project’s goals is extending affordable high-speed broadband service to each of Thailand’s 70,000 villages, with a view to providing full national coverage by next year.

The newly announced programme also aims to improve connection quality and speed in the 27,000 small communities that already have fixed and wireless broadband access.

The plan aims to achieve speeds of at least 30 Mbps, up from 7.4 Mbps at present, as per data from Akamai Technologies, a US-based cloud services provider.

While Thailand currently ranks 6th of the 15 Asian countries surveyed in Akamai’s “State of the Internet 2015” report, if it achieves its target, it could outpace South Korea, which is first in the world, with average broadband speeds of 23.1 Mbps.

By the end of 2016, the initiative aims to add another 300 facilities to the MICT’s 2000 existing community-based ICT centres, which currently provide broadband internet to roughly half of the country’s villages.

4G gains

The simultaneous drive to launch 4G services is expected to create significant carry-through benefits for the Thai economy through increased demand for technology, materials and equipment, with a recent report by the NBTC estimating that the scheme could add nearly BT1trn ($28.1bn) to GDP through to 2020.

While 4G services are already on offer on the 2.1-GHz band, subscribers remain largely concentrated in Bangkok. According to Settapong Malisuwan, vice-chairman of the NBTC, the launch of 4G on the 1.8-GHz band could attract as many as 20m subscribers by the end of 2016.

The NBTC report expects broader 4G services to generate an additional BT119bn ($3.4bn) in revenues for the telecoms sector through to 2020, as well as BT284bn ($8bn) worth of capital markets activity and financial investments.

A further BT109bn ($3.1bn) in mobile transactions, BT50.6bn ($1.4bn) in 4G usage, and more than BT170bn ($4.8bn) in revenues for the entertainment, education, social welfare and public health care sectors are also expected.

Mobile money

The rollout of 4G services and the expansion of broadband access – as well as the increasing affordability of smartphones and handsets – are also forecast to generate a 10-fold jump in online payment transactions, according to the NBTC.

This will be supported by a newly launched national e-payment system, aimed at moving towards a cashless society. Announcing the plan in December, Apisak Tantivorawong, minister of finance, said the plan is expected to save the country BT75bn ($2.1bn) per year.

Korkit Danchaivichit, deputy secretary-general of the NBTC, told local media in January, “This year, we’ll see changes in consumer demographics which will drive the adoption of mobile payment and trends in the utilisation of mobile banking.”

Source: Oxford Business Group. Date: 17 February 2016