Thiland-2

Thiland TELECOMS, MOBILE, BROADBAND AND FORECASTS


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Forecasts:

The following provides some background to our scenario forecasting methodology:
 This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.
 The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.
 All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.

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EXECUTIVE SUMMARY

As Thailand’s political problems continue, the government is still struggling to issue 3G licences
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 being a major concern.

Not surprisingly there was a cooling in demand for mobile services in 2009 through 2010 and into 2011. In the meantime, mobile penetration had managed to pass the 100% penetration mark. Growth in the mobile market looked to be picking up again in 2011, although there would be no return to the boom years. Fixed-line development was virtually non-existent, despite the government’s keenness in promoting this. There had been some interesting activity in the broadband internet market; but this was essentially high growth off a relatively small base. The good news was that the surge in broadband that started back in 2007 was continuing into 2011.

In the wider telecom sector, there was a feeling that a loss of direction was creeping into the market. If any one thing characterises the Thai telecom industry it is probably the stop-start approach to sector reform and re-regulation. An important step was taken when a new Telecommunications Act was enacted a decade ago, but the government moved slowly on the implementation of this legislation.

Most critically it was not until 2004 that the National Telecommunications Commission was finally set up and working. Some good work was subsequently done in the regulatory area; but the industry continues to be frustrated by delays in reform; the uncertainty that these delays create has been the big concern. The National Telecommunications Commission has been trying hard for many years but the regulatory environment has not had a sustained period of consistent policy since the commission was established. In the meantime, one of the urgently needed reforms, the long-awaited restructuring of the two state-owned operators, TOT and CAT Telecom, continued to be postponed. This meant that the critical task of concession conversion also continued to be unresolved.

By 2011 the National Telecommunications Commission was effectively a ‘lame duck’ regulator with the government finally moving to create the National Broadcasting and Telecommunications Commission. Although this new authority was not likely to be operational until late 2011 and would take time to ‘get up to speed’ the National Telecommunications Commission was finding it increasingly more difficult to carry out its role.

The biggest setback was the failure of the National Telecommunications Commission to hold the 3G auctions and to issue these long-awaited licences. The situation with respect to 3G was proving to be a national embarrassment for Thailand. There were also serious concerns in some quarters that the new regulator when finally installed would not be a truly independent authority. In any event one effect of all this was that foreign investors were remaining cautious about the Thai telecom market.

Market highlights:
 Thailand’s mobile market had reached 72 million subscribers by early 2011, for an overall penetration of 105%.
 After more than eight straight years of strong growth, the annual increase in the mobile subscriber numbers had eased substantially in 2009/10 as the national economy slowed.
 Modest mobile subscriber growth of around 9% was expected in 2011.
 The efforts by the NTC to issue 3G mobile licences continued to encounter roadblocks; at the start of 2011 it was anticipated that the process would take at least another twelve months to conclude.
 The broadband internet market in Thailand saw another two years of stronger subscriber growth in 2009/10, expansion running at an annual rate of around 30%; all the signs were suggesting that broadband growth would continue.
 Whilst demand for broadband services was finally certainly increasing in Thailand, it was happening from a relatively small base with overall broadband penetration still remaining low (at just over 4% by end-2010).
 The fixed-line market was showing no signs of revival, with growth close to zero; this has been despite a suggestion that the demand for broadband services would provide a fresh momentum in the copper network.
 Whilst the Thailand’s telecom regulator move to reform the internet segment, most notably opening up the internet gateway market, has indeed been positive, much more restructuring needs to be done; progress in this regard was likely to stall whilst the setting up of the proposed new regulator takes place.

Thailand: - key telecom parameters – 2010 - 2011

Peter Evans
April 2011

Data in this report is the latest available at the time of preparation and may not be for the current year.

This report provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in Thailand. Subjects covered include:
 Key statistics;
 Market and industry overviews;
 Regulatory environment;
 Major players (fixed and mobile);
 Infrastructure;
 Mobile voice and data market;
 Internet, including VoIP;
 Broadband;
 Scenario forecasts for fixed-line, mobile and internet subscribers.

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TABLE OF CONTENTS

Chapter number: on page number:

1. KEY STATISTICS ............................................................................................................. 1
2. TELECOMMUNICATIONS MARKET ........................................................................... 3
2.1 Country overview ........................................................................................................ 3
2.1.1 Background
2.1.2 Economy
2.2 Thailand’s telecom market ........................................................................................ 3
2.2.1 Overview
2.2.2 Background
2.2.3 Political turmoil and its impact on the telecom sector
2.2.4 Government intervention
3. REGULATORY ENVIRONMENT .................................................................................. 7
3.1 Regulatory reform ...................................................................................................... 7
3.1.1 Background
3.1.2 Telecommunications Act 2001
3.1.3 Ministry of Information and Communications Technology (MICT)
3.1.4 Regulator
3.1.4.1 National Telecommunications Commission (NTC)
3.1.4.2 National Broadcasting and Telecommunications Commission (NBTC)
3.1.4.3 Five-year Master Plan
3.1.5 Concession conversion
3.1.6 Taxation
3.1.7 Privatisation
3.1.8 Foreign ownership
3.1.9 Interconnection charges
3.1.10 National numbering scheme
3.1.11 Internet gateways
3.1.12 Voice over Internet Protocol (VoIP)
3.2 Regulatory developments ..........................................................................................14
3.2.1 Third generation (3G) mobile licences
3.2.2 WiMAX
3.2.3 Registration of prepaid mobile services
3.3 Regulatory disputes ...................................................................................................16
4. FIXED NETWORK MARKET ........................................................................................17
4.1 Background ...............................................................................................................17
4.2 Statistics .....................................................................................................................17
4.3 Next Generation Network (NGN) .............................................................................18
4.4 Public payphones ......................................................................................................18
5. MAJOR OPERATORS.....................................................................................................20
5.1 Operating environment for operators .......................................................................20
5.1.1 Market overview
5.1.2 Historical background
5.1.3 Mobile market
5.1.4 Operator statistics
5.2 Major operators .........................................................................................................23
5.2.1 Advanced Info Service (AIS)
5.2.1.1 Overview
5.2.1.2 Key drivers
5.2.1.3 Statistics
5.2.1.4 Financials
5.2.1.5 Developments
5.2.1.6 3G strategy
5.2.1.7 AIS/Advance Datanetwork Communications (ADC)
5.2.1.7.1 WiMAX
5.2.2 DTAC
5.2.2.1 Overview
5.2.2.2 Statistics
5.2.2.3 Financials
5.2.2.4 3G strategy
5.2.3 True Corp
5.2.3.1 Background
5.2.3.2 Company structure and financial history
5.2.3.3 Financials
5.2.3.4 Fixed-line services
5.2.3.5 True Move
5.2.3.5.1 Overview
5.2.3.5.2 Statistics
5.2.3.5.3 Financials
5.2.3.5.4 3G strategy
5.2.3.5.5 PCT network
5.2.3.6 True Online
5.2.3.6.1 Overview
5.2.3.6.2 Statistics
5.2.3.6.3 Broadband services
5.2.3.6.4 Broadband developments
5.2.3.6.4.1 WiMAX
5.2.3.6.5 Pricing strategies
5.2.4 Telephone Organization of Thailand Corp (TOT)
5.2.4.1 Overview
5.2.4.2 Statistics
5.2.4.3 Network expansion activity
5.2.4.4 3G strategy
5.2.4.5 Proposed privatisation
5.2.4.6 TOT broadband
5.2.5 Communications Authority of Thailand (CAT)
5.2.5.1 Overview
5.2.5.2 Network and business expansion
5.2.5.3 Proposed privatisation
5.2.5.4 Proposed CAT/TOT merger
5.2.5.5 CAT Telecom mobile
5.2.5.5.1 Overview
5.2.5.5.2 Statistics
5.2.5.5.3 3G strategy
5.2.5.6 Hutchison CAT
5.2.5.6.1 Overview
5.2.5.6.2 Statistics
5.2.5.6.3 Restructuring
5.2.5.6.4 Acquisition plans
5.2.5.7 CAT broadband
5.2.6 Thai Mobile, TOT and CAT
5.2.6.1 TOT/CAT joint venture
5.2.6.2 Statistics
5.2.6.3 Restructuring of Thai Mobile joint Venture
5.2.6.4 Proposed 3G network
5.2.7 Thai Telephone &Telecommunications (TT&T)
5.2.7.1 Overview
5.2.7.2 Business development
5.2.7.3 Company and financial restructuring
5.2.7.4 Financial rehabilitation plan
5.2.7.5 Triple T Broadband/Jasmine
6. TELECOMMUNICATIONS INFRASTRUCTURE ......................................................54
6.1 National telecom network .........................................................................................54
6.1.1 Overview
6.2 International infrastructure .....................................................................................54
6.2.1 Submarine cable networks
6.2.2 Submarine cable systems under construction
6.2.2.1 Thailand-US planned cable link
6.2.2.2 Asia Pacific Gateway (APG)
6.2.2.3 Gulf of Thailand
6.2.3 Submarine cable outages
6.2.4 Satellite networks
6.2.4.1 Overview
6.2.4.2 CAT Telecom’s role
6.2.4.3 History of development
6.2.4.4 Thaicom’s satellite network
6.2.4.4.1 Government interest in Thaicom
6.2.4.5 Satellite TV
7. INTERNET MARKET .....................................................................................................60
7.1 Overview ....................................................................................................................60
7.2 Internet statistics .......................................................................................................61
7.3 ISP market .................................................................................................................62
7.3.1 Overview
7.3.2 Market restructuring
7.3.2.1 Background
7.3.2.2 Restructuring and reform
7.4 Thailand’s internet gateway exchanges ...................................................................64
7.4.1 Overview
7.4.2 Opening up of gateway market
7.4.2.1 True Internet Gateway (TIG)
7.5 Regulatory issues .......................................................................................................66
7.6 Voice over Internet Protocol (VoIP) .........................................................................66
8. BROADBAND MARKET ................................................................................................67
8.1 Overview ....................................................................................................................67
8.2 Broadband statistics ..................................................................................................67
8.3 National Broadband Policy.......................................................................................69
8.4 Digital Subscriber Line (DSL) ..................................................................................69
8.5 Cable modem .............................................................................................................70
8.6 Internet via satellite ...................................................................................................70
8.7 Wireless internet ........................................................................................................70
8.7.1 WiFi
8.7.2 WiMAX
8.7.2.1 Testing
8.7.2.2 Licensing
8.7.2.3 NTC project – 2010
8.8 Fibre-to-the-Home (FttH) .........................................................................................72
9. BROADCASTING MARKET ..........................................................................................74
9.1 Overview ....................................................................................................................74
9.2 Regulatory environment ...........................................................................................74
9.2.1 Proposed National Broadcasting Commission (NBC)
9.2.2 Broadcasting Act 2008
9.2.2.1 National Broadcasting and Telecommunications Commission (NBTC)
9.2.2.2 NBTC Five-Year Master Plan
9.3 Digital TV ..................................................................................................................76
9.4 Internet Protocol Television (IPTV) .........................................................................76
9.4.1 Advanced Datanetwork Communications Ltd (ADC)
9.4.2 True
9.4.2.1 Broadband TV
9.4.3 TT&T
9.4.4 Mass Communications Organization of Thailand (MCOT)
9.5 Free-to-Air (FTA) TV ...............................................................................................77
9.6 Pay TV .......................................................................................................................78
9.6.1 True Visions (formerly United Broadcasting Corporation (UBC))
10. MOBILE COMMUNICATIONS .................................................................................81
10.1 Overview .................................................................................................................81
10.2 Mobile statistics .....................................................................................................81
10.3 Competition ............................................................................................................83
10.4 Regulatory developments .......................................................................................84
10.4.1 Mobile Number Portability (MNP)
10.4.2 Mobile Virtual Network Operator (MVNO)
10.4.2.1 Loxley’s MVNO service
10.4.2.2 AirAsia
10.4.3 Interconnection arrangements
10.4.4 National security
10.5 Mobile technologies ...............................................................................................86
10.5.1 CDMA
10.5.2 PCT service
10.5.3 General Packet Radio Service (GPRS)
10.5.3.1 AIS
10.5.3.2 DTAC
10.5.3.3 True
10.5.4 Enhanced Data for GSM Evolution (EDGE)
10.5.4.1 AIS
10.5.4.2 DTAC
10.5.4.3 True
10.5.5 Third Generation (3G) mobile
10.5.5.1 Analysis: Thailand struggles to put 3G in place – January 2011
10.5.5.2 3G licensing: progress in 2010
10.5.5.3 3G licensing: progress in 2011
10.5.5.4 TOT’s MVNO strategy
10.5.5.4.1 AIS/TOT
10.5.6 LTE
10.5.6.1 Development
10.6 Mobile voice services .............................................................................................91
10.6.1 Prepaid
10.7 Mobile data services ..............................................................................................92
10.7.1 Overview
10.7.2 Short Message Service (SMS)
10.7.3 Multimedia Message Service (MMS)
10.8 Mobile content and applications ...........................................................................92
10.8.1 Overview
10.8.2 Mobile TV
11. FORECASTS ................................................................................................................94
11.1 Forecasts – fixed-line subscribers .........................................................................94
11.1.1 Overview
11.1.2 Forecasts – fixed lines – 2007 - 2008; 2013; 2018
11.2 Forecasts – internet subscribers ...........................................................................95
11.2.1 Overview
11.2.2 Forecasts – internet subscribers – 2007 - 2008; 2013; 2018
11.3 Forecasts – mobile subscribers .............................................................................96
11.3.1 Overview
11.3.2 Forecasts – mobile subscribers – 2007 - 2008; 2013; 2018
12. GLOSSARY OF ABBREVIATIONS ...........................................................................98

LIST OF TABLES

Table number: on page number:
Table 1 – Country statistics Thailand – 2011 ........................................................................... 1
Table 2 – Telephone network statistics – 2010 .......................................................................... 1
Table 3 – Internet user statistics – 2010 ................................................................................... 1
Table 4 – Broadband statistics – September 2010 ..................................................................... 1
Table 5 – Mobile statistics – 2010 ............................................................................................. 1
Table 6 – National telecommunications authorities .................................................................. 2
Table 7 – Fixed lines and teledensity – 1995 - 2011 ................................................................17
Table 8 – Fixed-line subscribers by operator – 2008; 2010 ......................................................17
Table 9 – Fixed-line subscribers – metro vs provincial – 2010 ................................................18
Table 10 – Public payphones in service – 2004 - 2010 .............................................................18
Table 11 – Public payphones by provider – 2009 .....................................................................19
Table 12 – Fixed-line operators and subscribers – 2009 ..........................................................23
Table 13 – Mobile operators, subscribers and annual change – 2010 ......................................23
Table 14 – Mobile operators, subscribers and market share – 2010 .........................................23
Table 15 – ARPU (postpaid, prepaid, blended) for major mobile operators – 2010 .................23
Table 16 – AIS: subscribers and market share – 2004; 2007 - 2010 ........................................24
Table 17 – AIS: mobile subscribers and ARPU (postpaid and prepaid) – 2010 ......................24
Table 18 – AIS: ARPU (postpaid, prepaid and blended) – 2007 - 2010 ..................................25
Table 19 – AIS: proportion of revenue from non-voice – 2008 - 2011 .....................................25
Table 20 – AIS: capital expenditure – 2008 - 2011 ..................................................................25
Table 21 – DTAC: subscribers and market share – 2002 - 2003; 2005 - 2010 ........................28
Table 22 – DTAC: mobile subscribers and ARPU (postpaid and prepaid) – 2010 ..................29
Table 23 – DTAC: ARPU (postpaid, prepaid and blended) – 2008 - 2010 ..............................29
Table 24 – True’s total revenues – 2004 - 2010 .......................................................................31
Table 25 – True Corp: capital expenditure – 2007 - 2011 ........................................................32
Table 26 – True’s fixed-line subscribers – 2004 - 2010 ............................................................32
Table 27 – True’s fixed line ARPU – 2004 - 2010 ...................................................................33
Table 28 – True’s payphone ARPU – 2004 - 2010 ..................................................................33
Table 29 – True Move: subscribers and market share – 2004 - 2010 .......................................34
Table 30 – True Move: mobile subscribers and ARPU (postpaid and prepaid) – 2010 ...........34
Table 31 – True Move: ARPU (postpaid, prepaid and blended) – 2007 - 2010 .......................34
Table 32 – True Move: proportion of revenue from non-voice – 2008 - 2011 ..........................35
Table 33 – True’s PCT subscribers – 2004 - 2010 ...................................................................36
Table 34 – True’s fixed internet subscribers – 2003 - 2010 .....................................................37
Table 35 – True’s broadband subscribers – 2001 - 2002; 2004 - 2012 .....................................37
Table 36 – TOT’s fixed-line subscribers – 2005 - 2010 ...........................................................39
Table 37 – TOT’s total revenues – 2005 - 2010 .......................................................................40
Table 38 – TOT’s payphones – 2005 - 2010 .............................................................................40
Table 39 – TOT’s broadband services – 2007 - 2010 ...............................................................42
Table 40 – TOT’s broadband internet ports in service – 2009 .................................................42
Table 41 – TOT’s broadband subscribers – 2007 - 2010 ..........................................................42
Table 42 – CAT Telecom’s subscriber growth – 2006 - 2009 ..................................................45
Table 43 – Hutchison CAT: subscribers and market share – 2003; 2007 - 2010 .....................46
Table 44 – Thai Mobile Telecom’s subscriber growth – 2002 - 2009 .......................................48
Table 45 – Triple T Broadband’s subscribers – 2004; 2007 - 2009 ..........................................52
Table 46 – Internet users – 1996 - 2011 ...................................................................................61
Table 47 – Internet subscribers – 1997 - 2011 .........................................................................61
Table 48 – International internet bandwidth – 2000 - 2010 ....................................................62
Table 49 – Fixed broadband subscribers and penetration – 2001 - 2011 .................................67
Table 50 – Broadband subscribers and households – September 2010 .....................................68
Table 51 – Major broadband players and subscribers – September 2010 ................................68
Table 52 – DSL subscribers – 2002 - 2010 ...............................................................................68
Table 53 – Key broadcasting statistics – 2010 .........................................................................74
Table 54 – Pay TV subscribers – 1996 - 2002 ..........................................................................78
Table 55 – Pay TV subscribers by platform – 2002 - 2010 ......................................................78
Table 56 – True Visions/UBC - pay TV subscribers – 1998 - 2010 ........................................79
Table 57 – True Visions – total and FTA subscribers – 2007 - 2010 ......................................80
Table 58 – True Visions – pay TV ARPU – 2003 - 2010 ........................................................80
Table 59 – Mobile subscribers – 1999 - 2012 ...........................................................................81
Table 60 – Mobile services revenue and ARPU – 1998 - 2012 ................................................82
Table 61 – Mobile operators, subscribers and annual change – 2010 ......................................82
Table 62 – Other mobile operators, subscribers and annual change – March 2009 ................83
Table 63 – Mobile operators, subscribers and market share – 2010 .........................................83
Table 64 – ARPU (postpaid, prepaid, blended) for major mobile operators – 2009 - 2010 ......83
Table 65 – Mobile subscribers – prepaid and postpaid – 2006 - 2010......................................91
Table 66 – Forecast fixed-line subscribers and penetration rate – 2007 - 2008; 2013; 2018 ...94
Table 67 – Forecast internet subscribers and penetration rate – 2007 - 2008; 2013; 2018 .....96
Table 68 – Forecast mobile subscribers and penetration rate – 2007 - 2008; 2013; 2018 ........96
LIST OF CHARTS
Chart number: on page number:
Chart 1 – AIS financials – 2007 - 2010 ...................................................................................26
Chart 2 – True Move financials – 2007 - 2010 ........................................................................32
Chart 3 – Fixed and mobile subscribers – 1999 - 2010 ............................................................54
Chart 4 – Fixed broadband subscribers – total vs DSL – 2003 - 2010.....................................68
Chart 5 – Mobile subscribers and ARPU – 2002 - 2010 .........................................................82
LIST OF EXHIBITS
Exhibit number: on page number:
Exhibit 1 – Thailand’s Foreign Ownership legislation for telecom sector ...............................12
Exhibit 2 – Major operators by market segment ......................................................................20
Exhibit 3 – True Corp’s major shareholders – March 2010 .....................................................30
Exhibit 4 – Submarine cable networks − 2011 .........................................................................55
Exhibit 5 – Thaicom’s satellite network – 2011 .......................................................................58
Exhibit 6 – Licensed ISPs in Thailand – 2011 .........................................................................62
Exhibit 7 – ISPs operated by telecom companies ......................................................................62
Exhibit 8 – International internet gateway operators in Thailand – 2011 ..............................65
Exhibit 9 – FTA TV Broadcasters ............................................................................................78
Exhibit 10 – Major mobile operators and foreign shareholders – 2010 ....................................83

For a full overview of our information on Asia, see at www.budde.com.au, or other BuddeComm reports on the Asia market:
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For a full overview of our vertical market reports on Asia, see:
 Asian Fixed Broadband and Internet Market;
 Asian Fixed Voice Market
 Asian Telecom Forecasts;
 Asian Mobile Data and the Wireless Broadband Market;
 Asia – Mobile Operators;
 Asian Mobile Voice Market;
 Asian Telecommunications Infrastructure;
 Asia – Mobile, Broadband and Digital Economy Overview Asian Statistical Reports:
 Asia - Internet, Broadband and Convergence Statistics (tables only);
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For a full overview of our Technology Library, see our other BuddeComm reports:
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 Internet Technologies Handbook Volume 1 - Infrastructure;
 Internet Technologies Handbook Volume 2 - Web Development & Audio-Visual Coding;
 Internet Technologies Handbook Volume 3 - IP Techniques;
 Internet Technologies Handbook Volume 4 - IPv6;
 Internet Technologies Handbook Volume 5 - Routing & Addressing Crisis;
 Mobile Communications and Mobile Data Technologies Handbook;
 Telecoms Infrastructure Technologies Handbook - Volume 1 - Last Mile;
 Telecoms Infrastructure Technologies Handbook - Volume 2 - Long Distance & Data;
 Wireless Broadband Technologies Handbook.

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1. KEY STATISTICS

Table 1 – Country statistics Thailand – 2011

Table 2 – Telephone network statistics – 2010

Table 3 – Internet user statistics – 2010

Table 4 – Broadband statistics – September 2010

Table 5 – Mobile statistics – 2010

Table 6 – National telecommunications authorities

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2. TELECOMMUNICATIONS MARKET

2.1 COUNTRY OVERVIEW

2.1.1 Background
Thailand is a country in South East Asia, bordered to the north by Myanmar and Laos, to the east by Laos and Cambodia, to the south by Malaysia. The country has a significant coastline with the Gulf of Thailand to the south and to the west the Andaman Sea.

Thailand has a land mass of approximately 513,000km2 Its population was around 68 million by 2010.
The country’s official language is Thai. Its primary religion is Buddhism.

Thailand’s successful development of its economy between 1985 and 1995 was based on extensive industrialisation, with exports being a major contributor to the economy. At the same time the country has also built up a formidable tourist industry.

2.1.2 Economy
Thailand made a good recovery following the Asian Economic Crisis of the late 1990s and experienced five or so years of solid growth. However, the national economy then spluttered to some extent during 2005, with financial analysts warning about that there were further urgent matters of reform for the government to address.

Then, coming into 2006, the country found itself in the grip of a serious political crisis. The political problems in Thailand have continued to trigger crisis after crisis and the underlying issues were clearly going to take some time to resolve. The political situation was certainly not helping the economy.

By 2009, the creeping impact of the 2008 global financial crisis was starting to take its toll on Thailand.
In a country where business confidence had been seriously hit by four years of political instability, external factors were adding to its woes. GDP growth in 2008 had fallen to around 2.6% and the International Monetary Fund (IMF) had forecast that it would go negative in 2009 (-3%) and it actually came in at -2.2%. Despite a number of key factors weighing down on the economy, 2010 saw a more than creditable GDP growth of 7.8% achieved for the year. The economy was generally considered to be shaky, however. The IMF forecast at the start of 2011 that Thailand’s GDP growth would drop back to 4% in that year.

In the meantime, the country is in desperate need of a stable and effective government. Apart from the threat of ongoing political instability, the lingering aftermath of the global financial crisis remains a huge problem for the Thai economy.

2.2 THAILAND’S TELECOM MARKET

2.2.1 Overview
If any one thing characterises the Thai telecom industry it is probably the stop-start approach to sector reform and re-regulation. An important step was taken with the Telecommunications Act being adopted as law back in 2000, but successive governments have moved slowly on its implementation since then.
Most critically it was not until 2004 that the mooted new telecom regulator, the National Telecommunications Commission (NTC), was finally set up and working.

Since then some good work has been done and important steps taken in the regulatory area; however, both foreign and local companies have been frustrated by the delays in reform and the uncertainty that these delays create has been a headache for all concerned. By 2010 a range of deregulation issues were crying out to be confronted. One of the big structural reform issues – the defining of the roles and the restructuring of TOT and CAT – was still demanding urgent attention. In fairness to the NTC, though, the regulatory environment has not seen a sustained period of consistent direction since the commission was first established.

2.2.2 Background
After the NTC initially commenced operations, it inevitably took time to get up to speed. Naturally, too, it was looking for steady policy direction from the government. But this has not been forthcoming.
First, the military overthrew the Shinawatra government late in 2006; then the interim government that followed was replaced by an elected government in late 2007.

The new Samak government was then dismissed and the ruling People’s Power Party dissolved by decisions of the constitutional court just 12 months later. In early 2009, a replacement government was formed with Mr Abhisit Vejjajiva of the Democrat Party as prime minister. 
(For more information on the political turmoil and its impact on the telecom sector, see chapter 2.2.3, page 5)

Nevertheless the absence of regulatory direction has not stopped Thailand’s telecommunications sector from continuing to be a significant element within overall economy of the country. The restructuring of the Thai economy in the wake of the economic crisis of the late 1990s prompted considerable focus on the telecom sector, in particular. Debt restructuring by telcos was an ongoing process and, as a consequence, the sector had seen a number of foreign companies arrive on the scene.

The mobile duopoly – Advanced Info Service (AIS) and Total Access Communications (trading as DTAC) – progressively came under challenge from newer entrants. The new players, TA Orange (which became True Move) and the restructured Tawan, operating as Hutchison CAT, certainly created increased interest in the booming Thai mobile market, but by 2009 AIS and DTAC still held about 75% of the total subscriber base between them. While competition had no doubt increased in the mobile sector, mobiles were also growing at a much higher rate than their fixed-line counterpart. The total number of mobile subscribers raced past the number of fixed-line connections back in 2001. With a penetration rate having passed 100% in 2009, the mobile market had expanded eightfold in just seven years.

By contrast, the business strategies for the fixed-line operators were more conservative and tending to revolve around increasing subscription rates for value-added services (VAS) among existing client bases in a bid to drive revenue while at the same making it increasingly difficult for subscribers to change service providers in the face of impending industry deregulation. Operators were expected to drive demand through innovative marketing campaigns.

The substantial rollout of Digital Subscriber Line (DSL) broadband services on the back of a government-supported initiative promoting broadband was also expected to have some impact on the demand for fixed-line infrastructure. The uptake of broadband internet services in Thailand had been modest. In 2004 the Ministry of Information and Communications Technology (MICT) started a strong push for cheaper broadband and was supporting TOT in this campaign. This saw the broadband internet segment of the market start to expand significantly in 2004/05. By early 2011 there were an estimated 2.2 million DSL subscribers in the country. This was out of a total fixed broadband subscriber base of 2.7 million. Whilst fixed broadband penetration was still only around 4%, the market was on a distinctly positive growth path.

With increasing competition right across the marketplace and in all market segments, telecom operators were continuing to focus on the balance sheet and driving value for shareholders; they were also continuing to work on positioning themselves for the changes ahead. As debt restructuring efforts were finalised, financiers and shareholders alike were looking to operators to apply greater discipline to the control of spending and investing, the growing of client bases, and developing new product offerings, while increasing, or at least maintaining, their Average Revenue per User (ARPU).

2.2.3 Political turmoil and its impact on the telecom sector
The political climate has certainly been playing an important role in the development of telecommunications in Thailand. The general elections back in 2001 saw a new government elected, as the Thai Rak Thai Party, led by Thaksin Shinawatra took control of the country. The new Prime Minister, a businessman, who, significantly, was also the founder of Shin Corp, the largest telecom conglomerate in the country, set out with an ambitious reform agenda. However, his government became heavily bogged down in a number of key reforms.

Although the government failed in its efforts to privatise the two state-owned telecom operators, TOT and CAT, it did eventually manage to put in place a new telecom regulator, the NTC, which finally become a reality in 2005.

In the meantime, the Shinawatra family sold its stake in Shin Corp. The takeover ultimately provided a trigger for the military to act against the government of Thaksin Shinawatra. With the overthrow of the Shinawatra government in a military coup, the general push for reform in the country’s telecom sector started to take a different path. After the coup, the military-appointed government introduced laws aimed at strengthening restrictions on foreign ownership in the telecommunications sector, forcing the restructuring of the ownership of AIS and DTAC. The government was clear on one issue: it was not going to privatise the two state-owned telcos.

The military kept its promise to hold general elections and following the elections at the end of 2007 a new coalition government was formed under Prime Minister Samak Sundaravej with a new Cabinet – and MICT minister – being sworn-in at the start of 2008. By early 2008 the telecom industry in Thailand was urging the new government to continue backing reform of regulations initiated by the previous government to ensure industry confidence. The major operators also called on the government to push forward and clarify policies and regulations to ‘level the playing field’ in the industry.

The operators became quite vocal in their lobbying of government. DTAC outlined five areas it said the operators hoped the new government would tackle:
 interconnection charges;
 revenue-sharing structures;
 access charges;
 number portability;
 issuing of Third Generation (3G) mobile licences.

Then, in late 2008, the Thai Constitutional Court found Mr Samak Sundaravej guilty of conflict of interest forcing his resignation. Mr Somchai Wongsawat was subsequently elected prime minister by the Thai Parliament. In another equally dramatic move two months later, the Thai Constitutional Court ruled that the ruling People’s Power Party be dissolved and its 37 executive members be banned from politics for five years. In making its decision the Court also ruled that Mr Somchai would no longer be able to hold his position.

Mr Abhisit Vejjajiva, leader of Thailand’s Democrat Party, became prime minister and a new Cabinet was duly sworn-in. When he was forming his coalition government early in 2009, Prime Minister Abhisit made what was generally seen as a poor choice in appointing the Minister for ICT. The subsequent lack of leadership in this key ministry caused serious concern throughout the industry.

By 2010 the government appeared to be diluting its commitment to reform of the telecom sector. The establishment of the National Broadcasting and Telecommunications Commission (NBTC) (likely to happen in 2011) was seen as the formation of a less independent regulator and one that would be more inclined to implement government policy.

In February 2011 the rating agency Fitch announced that while the Thai telecom sector should remain financially robust in 2011, the sector continued to face heightened legal and regulatory risks which could impact the financial performance of the major private telecom operators. In particular, the review of concessions for private telecom operators could lead to substantial monetary claims by the stateowned telecom companies – TOT and CAT Telecom – against their concessionaires, AIS, DTAC and True Move, or possible revocation of concession rights. Other concerns include a tightening of foreign ownership laws, which could affect new investment and shareholder support.

2.2.4 Government intervention
Censorship of media including the internet has been growing more widespread in Thailand. Strict control of political news has been more common under successive governments over the last decade.
Reporters Without Borders (RSF) worldwide press freedom index 2009 ranked Thailand 130th out of 175 countries, having dropped from 59th place in 2004. Whilst censorship not surprisingly became more prevalent under the military-appointed government in 2007, according to RSF it has even worsened during 2009 under what would have been considered the more moderate government of Abhisit Vejjajiva.

It was revealed by the Thai police in 2008 that some 32,000 websites had been blocked to Thai internet users since 2002. The Thai government operated a sophisticated internet filtering system, with two bodies – the Royal Thai Police and CAT Telecom – responsible for implementing internet censorship.

The Thai government blocked access to the popular video sharing site YouTube in 2007 after videos insulting the Thai King Bhumibol Adulyadej were featured on the site. Other restricted sites included foreign news organisations such as the BBC and CNN, both of whom had aired stories regarding deposed Prime Minister Thaksin Shinawatra.

A Computer Crimes Act came into effect in Thailand in 2007. This legislation not surprisingly included provisions to punish people who disseminated pornography, threatened national security or insulted the monarchy. In a dramatic move in 2008 a Thai court ordered 400 websites to be shut down and blocked a further 1,200 for carrying content disrespectful to the royal family.

RSF said in 2008 that it deplored the arrest of one user after authorities claimed to have matched his computer’s internet address to one used to post online messages deemed defamatory to the monarchy.
At the same time, observers had noted a record number of investigations were being conducted into lese majeste cases, which can carry a jail term of up to 15 years.

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3. REGULATORY ENVIRONMENT

3.1 REGULATORY REFORM

3.1.1 Background
As with many developing South East Asian countries, the Thai government has strongly supported a rapid expansion of telecommunications and cable TV/satellite infrastructure as a catalyst for economic growth. As early as 1991 the private sector was invited to participate in the expansion of the telecommunications sector on a build-transfer-operate (BTO) basis, given that the government would not be able to satisfy the huge demand for telecommunications in the country without some assistance.

To match the vision of a strong telecom sector for the country it has also been a key role of successive Thai administrations to pursue constructive reform in the country’s telecom market. At times it has been a real struggle for serious progress to be made, with one of the big disappointments being the time it took to put an independent telecom regulator in place.

Thailand also aspires to be a serious player on the global stage. When the country was granted membership of the World Trade Organization (WTO) in 1995, it committed to fully liberalise its telecom industry in compliance with WTO rules. It had in fact committed to full liberalisation by 2006.
For a long time it has been recognised by the various stakeholders that the Thai telecom sector was in need of fundamental reform.

Successive governments had been struggling with the reform process since 1997. One issue in particular, the need to scrap the revenue-sharing (concession) arrangement, has been high on the agenda for reform. In any event, the concession system needed to be changed in keeping with Thailand’s WTO commitment. The introduction of the private sector into the telecommunications arena had been a constructive move, but the local industry was experiencing both the positives and the negatives of the relationship. It was recognised that reform was needed.

A critical step in the reform process occurred when a key telecommunications bill, one crucial to the legal reform of Thailand’s telecom market in preparation for further liberalisation, received legislative approval. The Telecommunications Act 2001 explicitly outlined an essential framework for establishing the proposed independent regulatory body – the NTC – and laying out the responsibilities and authority of this commission. At the same time associated legislation in the form of the Broadcasting Act also addressed the creation of the National Broadcasting Commission (NBC).

After numerous delays the NTC was finally set up in late 2004 and became operational at the start of 2005. (See chapter 3.1.4.1, page 9).

With the NTC in place, reform of the country’s telecom sector received a much needed boost. But there still remained numerous barriers to the full implementation of the regulatory reform program.

3.1.2 Telecommunications Act 2001
At the time the Telecommunications Act 2001 was being developed and eventually enacted the administration and regulation of the country’s telecom sector involved three telecommunications state enterprises operating under the charter of the Ministry of Transport & Communications (MOTC) up until 2002. These state enterprises and their respective roles were:
 The Telephone Organization of Thailand (TOT), providing domestic telecommunications, international telephony to neighbouring countries and other VAS, controlling the 900MHz and 1900MHz frequency ranges for mobile phones;
 The Communications Authority of Thailand (CAT), providing international telephone services (excluding neighbouring countries) including data communications, radio communications, telegraphy, telex, and mobile telephony, controlling the 1800MHz frequency for mobile phones;
 Posts and Telegraph Department (PTD), providing satellite and radio frequencies and conducting studies of advanced telecommunications technologies.

After a series of delays, the legislation to reform the Thai telecom sector and finally establish an independent telecom regulator was finally passed in 2001. The bill was seen as a key step in deregulating the telecom sector before the industry could be fully liberalised by the 2006 target date.

The main provisions of the Telecommunications Act 2001 were as follows:
 establishment of the Telecommunications Commission as a regulator for the industry. It was to consist of seven members, each of whom may hold office for a period of six years. Other provisions relating to the NTC were to be found in the Broadcasting Act (1999);
 any person wishing to operate a telecoms business must apply to NTC for a licence and submit both an investment plan and its plan to provide telecoms services. The NTC may impose conditions requiring services to be supplied in remote areas or to disadvantaged or special groups, or other conditions;
 the NTC was to have the power to issue three types of licence:
 to an operator without its own network;
 to an operator with or without its own network, who supplies services to a section or sections of the public;
 to an operator with a network, who supplies services to the public as a whole.
 the NTC was to formulate the rules for granting a licence, which must be publicly available;
 the Act set out general qualifications for licence applicants;
 an applicant for the second or third type of licence above:
 should not be a ‘foreigner’ as defined in the Foreign Business Act 1999 (broadly, this means it must not be a foreign individual or company, or a Thai company that is majority owned by foreigners);
 Thai nationals must own at least 75% of the capital of the applicant;
 at least three quarters of the applicant’s directors must be Thai nationals;
 the applicant’s authorised director/s who have power to bind the company, must be Thai nationals.

The selection of the NTC board was to follow the legislation. The commission could then come into effect. As anticipated, the bill also provided guidelines for the NTC to operate as an independent regulator and to change the telecom industry from a revenue-sharing system to a licence-based scheme.

The original regulatory environment, whereby a highly-regulated telecom industry was run via a concession system, under which companies built and paid for their own networks and then transferred ownership to state-run agencies in return for a share in operating profits, was set to change. The system had been a problem for many of the telcos as the operators had to pay a proportion of their gross revenues to the state agencies ranging from 10% to as much as 43%. But some private operators had described the new bill as ambiguous as it was not clear how the existing operators would be given licences.

One of the most controversial issues in the new law was the limiting of foreign ownership in Thai companies to 25% compared with the previous limit of 49%. In 2002, however, the government agreed to amend the telecommunications law and raised the foreign ownership ceiling allowed for Thai telecoms companies from 25% to 49%, thereby reversing the provision incorporated in the 2001 Telecommunications Act.

3.1.3 Ministry of Information and Communications Technology (MICT)
In what was seen as an important strategic move, a new ministry, the Ministry of Information and Communications Technology (MICT), was established in Thailand in 2002. At the same time, any existing body known as the National Electronics Computer Technology Centre (NECTEC) became an agency under the MICT. The government had declared that the ministry would be responsible for delivering ICT skills to people nationwide, offering equal access to national information and communication infrastructure, promoting IT and telecom industries, increasing e-commerce competitiveness and improving government working processes through e-government initiatives. Put simply, the charter of the MICT was to increase the country’s efficiency through Information and Communication Technology.

3.1.4 Regulator

3.1.4.1 National Telecommunications Commission (NTC)
The Telecommunications Act 2001 having finally put in place a framework for restructuring the Thai telecom sector, it was evident that priority needed to be given to establishing the NTC at the earliest possible time. The role and obligations of the NTC were set out in the Act.

No new licences were issued for the whole time the NTC legislation had been under consideration.
Following the passing of this legislation, the way was clear, at least in theory, for two major reforms:
 the proposed conversion of the concession agreements. Concession conversions were expected to help operators such as Thai Telephone & Telecommunication (TT&T) that had been financially hamstrung by the concession system.
 the introduction of interconnection fees between operators. Delays in introducing these fees had been affecting the ability of some operators to offer such services as prepaid mobile because they were required to pay a THB200 monthly transmission fee to TOT for each mobile subscriber.

Obviously, a failure to quickly put the NTC in place would be of concern because, without the new national regulatory body, the bill itself remained useless. But serious delays did occur, providing a major setback to sectoral reform.

With the creation of the NTC finally nearing completion in 2004, the PTD said the NTC would have four urgent tasks after its establishment, including:
 introduction of an interconnect charge;
 allocation of new phone number ranges;
 creation of a fair and competitive telecom market (this included the concession conversion process and involved overseeing the conversion of concession contracts into licences and transferring assets to the new licence holders);
 setting up an administrative process for issuing licences.

The creation of the NTC entered the final stage in 2004 when the Thai senate confirmed the appointment of seven members to sit on the commission. The commission duly elected army General Chuchart Promprasit as its first chairman. Apart from the need to wait for royal assent, the transfer of the PTD into the NTC secretariat was required to complete the setting up of the commission. At the start of 2005 the NTC was up and running.

In one of its early actions, the NTC approved in principle a draft telecom master plan covering the period 2005 to 2010. The master plan was intended to provide regulation guidelines to ensure fair competition, transparency, prevent market monopolies and promote equal service access. The drafting committee was in the process of amending part of the master plan following recommendations from the NTC before submitting it for a public hearing process.

The NTC formally issued its Telecommunication Enterprise Master Plan for the period 2008 to 2010.
The plan confirmed the authority’s focus and emphasis on strengthening the Thai telecoms market by ‘allowing free and fair competition and greater participation by the public’. The regulator specifically mentioned the licensing of WiMAX frequencies.

3.1.4.2 National Broadcasting and Telecommunications Commission (NBTC)
Following the long and complicated process involved in setting up the NTC and with the NBC still not in place, there was growing support for a combined National Broadcasting and Telecommunications Commission (NBTC). The Thai telecom regulator’s attitude to regulatory convergence was attracting criticism. In particular, it was asserted that the NTC had left the nation ill-prepared for the convergence of telecom, broadcasting and media and that the country had already wasted 10 years talking about convergence without doing anything.

It was further suggested that plans for a merged broadcasting and telecoms regulator, the proposed NBTC, might not change the fundamental problems. This was because the NBTC would be divided internally into a telecommunications arm and a broadcasting arm, similar to the past, rather than having an infrastructure division and a content division. As a result, there would be many ‘grey areas’ where nobody would be willing to take responsibility.

In March 2010 Thailand’s House of Representatives approved the final reading of the long-delayed draft bill of a law that was to establish the NBTC as a new regulator to govern frequency allocation, broadcasting and telecommunications. Under the draft bill, an 11-member NBTC was to be established to replace the NTC.

By late 2010 the central question had become ‘Who is regulating the telecom industry?’ The delays in the licensing of 3G services had become just another example of a long series of delays that had dogged the telecom industry in Thailand for more than a decade. Technically speaking the sector was being regulated by the NTC. But the NTC had become a lame-duck authority with the government moving to establish its proposed new regulatory authority, the NBTC. The new entity was finally starting to look like becoming a reality.

Importantly, the NBTC was not expected to act in the usual manner of an independent regulator. The NTC had certainly tried to operate independently, but the NBTC is designed to operate more as an enforcer of central government policy. This was tipped for example to most likely lead to increased 3G licence fees. In the meantime, Thailand’s telecom market was increasingly being seen by foreign investors as a risky one with a high level of uncertainty attached.

By December 2010 the process of establishing the NBTC was finally under way following official publication of the Frequency Allocation Law in the Royal Gazette. The law stipulates the formation of an eleven-member NBTC within 180 days of the royal endorsement. The new regulator will be permitted to allocate 2100MHz 3G mobile licences. This will allow stalled licensing process to proceed after the NTC was found not to possess the authority to issue the frequencies. All responsibilities that belonged to the NTC will be transferred to the NBTC.

3.1.4.3 Five-year Master Plan
By early 2011 it was being reported that the NBTC was already drafting a five-year master plan which was expected to be finished by May 2011. This was despite the fact that the NBTC was still a provisional regulator and was operating without a board. The implementation of the plan was to start within three months of a new eleven-member NBTC board taking office.
The master plan was set to include broadband internet goals such as ensuring 10Mb/s internet services for residents in rural areas, covering at least 50% of the population and ensuring 100Mb/s internet services for urban residents, covering at least 15% of Thailand’s population. Nationwide, the plan would specify that everyone should be delivered access to speeds of at least 2Mb/s within five years.
Furthermore, under the plan basic telecommunications voice services should cover 99% of the population and data services 90%. Voice service fees would be reduced by at least 28% from the current rates while data service charges would fall by 65%.

3.1.5 Concession conversion

Thailand’s highly regulated telecom industry had been run for many years via a complicated concession system, under which companies built and paid for their own networks and then transferred their ownership to one of the two state-run agencies, TOT or CAT, in return for a share of their own operating profits.

Companies have been paying a proportion of their revenues, ranging from 10% to 43%, to TOT and CAT for the right to operate networks the companies themselves had built and paid for. Operators had long complained that the system was unfair as some paid less than others. Moreover, both TOT and CAT had been seen as competitors because they, too, operated mobile and fixed-line phone services.
The Thai government has been trying for several years to resolve unfair competition in the telecom industry caused by differences in the details of the concessions granted to private operators by telecom state enterprises TOT and CAT Telecom. However, differences between the government and private operators on the valuation of the concessions have formed a key obstacle in previous attempts to convert the concessions.

Efforts by the successive governments to convert these concessions to a new licensing arrangement have been ongoing. By late 2009 the matter remained unresolved with the NTC indicating that telecom operators might see their concessions converted in 2010 under the ICT Master Plan that had been approved by the Cabinet in mid-2009.

In a somewhat contradictory statement, the NTC declared that its move to liberalise the market ‘would not affect TOT and CAT Telecom, as there would be no more concessions next year.’ TOT and CAT had been complaining that the awarding of 3G licences would allow the concession holders to move their customers from the concessions to the new licences to save on regulatory fees at the state enterprises’ expense. The regulator was encouraging the two state telecom enterprises to prepare plans to cope with the end to concessions and make the best use of the assets transferred to them by the concession holders.

The effort to convert concessions continued in 2010 with the Ministry of Finance (MoF) announcing plans in June to move ahead with the conversions. The ministry’s State Enterprise Policy Office had been assigned to work on the details of the plan which had been discussed with the relevant ministry and regulator officials, as well as with TOT and CAT Telecom, although not with private operators at that stage. The plan to convert the concessions was to take place in tandem with the proposed 3G auctions. (see chapter 3.2.1, page 14)

However, all this suffered a setback in September 2010 when CAT Telecom took the NTC to court and successfully challenged the right of the regulator to conduct the 3G auctions. The likely outcome of this was that the NBTC, the proposed new regulator, would take over the conduct of the 3G auctions once it had been established. The new regulator was tipped to wind back on all the previous efforts to convert concessions putting the whole strategy in jeopardy.

In December 2010 TOT said it was continuing to push for resolution of the concession dispute. It had established an internal panel to evaluating the alleged damage to the state agency caused by AIS concession amendments. This panel had prepared a submission to the MICT that suggested TOT had lost THB110 billion from the AIS concession amendments.

3.1.6 Taxation
As part of the ongoing reform of the telecom sector, the government had announced back in 2003 that it was abolishing the revenue-sharing agreement between private telecom operators and the state agencies in favour of a new tax regime to be applied right across the telecom sector.

The government proposed a 50% ceiling for the telecom industry which would provide a broad framework designed to give the government flexibility to impose different levels of tax for new participants entering different branches of the sector. Most of the charges, however, were expected to be much less than 50%. It was reported that existing fixed-line operators and mobile phone companies could end up paying between 15% and 20% of their pre-tax revenues, respectively. It was uncertain which phone companies stood to gain most from the system.

The shift from revenue sharing to excise tax was part of the policy of the Thaksin government (2001-2006) to liberalise the telecom sector in line with Thailand’s WTO obligations which the country had committed to achieve by 2006. In subsequently announcing details of the amended tax system, the MICT said that fixed-line and mobile operators would be required to pay tax at 2% and 10% of revenues, respectively.

However, the operators would continue to pay the difference between their revenue-sharing rates and tax to state agencies. The total amount paid by the private telecom companies was not meant to change.
Under the proposed tax arrangement outlined by the ministry, if a mobile operator paid, for example, 25% of revenues to TOT, under the revenue-sharing (concession) system, then under the proposed scheme, the operator would pay tax at 10% of revenue to the government and the remaining 15% to TOT through revenue sharing. The new tax structure had been expected to replace the previous revenue-sharing concession system that operated between private companies and state agencies.

Then in 2006 the military appointed administration headed by Prime Minister Surayud cancelled the Thaksin government’s telecom excise tax policy. The Surayud government’s excise tax cancellation meant that TOT and CAT Telecom would continue to receive their full concession payments. However, TOT and CAT were then forced to increase their dividends to the MoF to account for their increased income. The strategy was modified again in early 2007 when the MICT announced that the 10% excise tax on mobile operators’ revenue would be removed. The excise tax was that previously deducted from mobile phone operators’ revenue and shared with state-owned companies under concession agreements.

The announcement was seen as a concession to state-owned telcos who lost significant revenue as a result of interconnection reforms. The revised interconnection regime proposed taking into consideration the number of minutes per call and the payment of fees only to the respective operators which connected the calls, which mobile operators believed would reflect the real cost of traffic volume among operator networks. Under the previous system, mobile subscribers could use any network without paying interconnection charges so operators with larger networks shouldered higher costs than their smaller rivals.

3.1.7 Privatisation

For information on the proposed privatisation of TOT and CAT, see chapter 5.2.5.3, page 43.

3.1.8 Foreign ownership
In August 2010 the NTC dismissed complaints filed by the European Union (EU) suggesting that a draft regulation aimed at preventing ‘foreign dominance’ of the telecom sector violated Thailand’s commitments to the General Agreement on Trade in Services (GATS) under the World Trade Organisation (WTO). The draft proposed placing curbs on shareholdings and management positions held by foreign nationals, and was intended to apply to existing operators and winners of 3G mobile licences.

The regulator said the EU was mistaken in alleging that the rules violated GATS by contravening the WTO’s Government Procurement Agreement – under which members commit to fairness and transparency in government procurement – firstly as Thailand was not a signatory to that particular agreement and secondly because the rules did not concern public procurement, but instead applied to private sector competition for commercial services using 3G spectrum.

Particularly contentious was a proposal that the nationality of a company’s senior management should be considered in the 3G auction, an issue that could affect most of the bidders, including AIS and DTAC, controlled by Singaporean and Norwegian nationals respectively. The NTC acknowledged that major foreign interest in the auction was unlikely, mainly due to repeated and frequent delays in the process and uncertainty about licensing terms caused by political disputes.

Exhibit 1 – Thailand’s Foreign Ownership legislation for telecom sector

The issue of foreign management in Thai-based telcos continued to be debated in 2010. In August the NTC said it had prepared draft rules which it said were in line with the Foreign Business Act and Telecom Business Act and would ensure that foreign investors had nothing to hide when doing telecom business in Thailand.

The draft defines foreign dominance as the use of nominees and foreign ownership that exceeds the level permissible by law. It also means the foreign shareholders or proxies have the authority to recruit and appoint top executives in the companies and can determine the investment policy. It also covers the recruitment of foreigners connected with foreign shareholders to key policy-making posts. The rules will be applied to both 3G spectrum-licence holders and private telecom concession holders. The NTC will order them to remedy the situation if they are found to breach the rules.

3.1.9 Interconnection charges

With the structure of the Thai telecom sector being heavily reliant on a tangle of concessions between state-owned enterprises and private telecom operators, it is not surprising that regulation of the interconnection charges between networks and operators remains complicated.

There has been much debate about the system and the changes that are needed. Again, it was one of the issues where industry was waiting on the NTC for action. The NTC said the long awaited interconnection charges were to be resolved by the end of 2006, pending the approval of the Reference Interconnection Offer (RIO); the RIO laid out the commercial and technical terms governing the interconnection agreements between telcos.

Following approval, operators were to hold bilateral negotiations to determine their interconnection rates and if any failed to reach agreement, the NTC would act as an arbitrator. The introduction of the regime was designed to lead to the removal of access charges and concession fees that private operators paid the TOT and CAT.

During 2006, the NTC and MICT undertook reforms to the legislation governing the interconnection system. Under the previous system, mobile subscribers could use any network without paying interconnection charges so operators with larger networks would shoulder higher costs than their smaller rivals. The three major mobile operators championed a revised system dubbed ‘interconnection charges’, saying it was fairer to mobile phone companies. The interconnection charge regime proposed taking into consideration the number of minutes per call and the payment of fees only to the respective operators which connect the calls, which the telcos believed would reflect the real cost of traffic volume between operator networks.

The main challenge to implementing the new system was the opposition of TOT, which was seeking to delay the implementation of the new regime as it would cause TOT to lose revenue from the one-way charges it collected from DTAC and True Move for accessing its network. AIS’s contract with TOT did not require it to pay access charges.

TOT said that before it could apply new interconnection rates with existing operators under its concession contracts it needed a directive from the MoF to avoid possible lawsuits. TOT also believed that, due to the concession contracts in place, the rates would be applied only to new telecom operators and not to existing operators. Existing operators under TOT contracts disagreed and made it clear that, once the new interconnection rates were implemented, they would stop paying revenue shares under their concessions. TOT management then blamed the MoF because it had failed to comment on how to handle existing concession contracts.

3.1.10 National numbering scheme

The NTC announced in 2005 that it was expanding the national numbering system from nine digits to 10 digits, to address the then looming shortage of phone numbers in the country. The revised numbering plan was designed to create 100 million mobile numbers with prefix 08, of which 30 million were to be reserved for future use. The new numbering plan was activated in late 2006.

In order to prepare for the new numbering plan, mobile operators were reported to have spent a combined THB400 million (US$10.6 million) upgrading their phone number systems. AIS spent about THB130 million (US$3.5 million), while DTAC and True Move each spent THB100 million (US$2.6 million). Other companies, Hutchison-CAT and Thai Mobile, also spent money on upgrades. The upgrades mainly involved adjustments to billing and IT systems and on campaigns to announce the new number policy. The NTC spent THB30 million (US$796,000) on its publicity campaign to introduce the revised policy.

The long-awaited number portability policy was also set to allow telecom users to keep their phone numbers after switching to different networks. For more information on the Mobile Number Portability (MNP) scheme, see chapter 10.4.1, page 84.

3.1.11 Internet gateways

The NTC set out the rules in early 2006 that were to see ISPs becoming gateway operators. For further information on the opening up of the IIG market, see 7.4.2, page 65.

3.1.12 Voice over Internet Protocol (VoIP)

The NTC issued a ruling in early 2006 that allowed ISPs to offer VoIP services without getting a new licence. For further information on VoIP services in Thailand, see chapter 7.6, page 66.

3.2 REGULATORY DEVELOPMENTS

3.2.1 Third generation (3G) mobile licences

By 2009 the process of awarding of 3G mobile licences was still ongoing and had become a painful and embarrassing saga for Thailand. Critics were noting the majority of the other markets in the region already had 3G up and running; as observed in the media, even ‘tiny Laos’ had 3G services operating.

The NTC rejected a request by telecom operators in 2005 to start trialling 3G services, citing regulatory uncertainty until the status of the NBC/NBTC was clarified. Applications to test World Interoperability for Microwave Access (WiMAX) broadband wireless technologies in Thailand were also declined. The NTC had completed guidelines for testing the new wireless technologies but had yet to give a green light to any applicants.

The NTC subsequently stated in mid-2006 that it was about to release the long awaited regulations on 3G services by year-end and that it would start awarding 3G licences to operators in early 2007. It was being suggested in the industry that continued delays in the licensing process had been degrading the value of 3G concessions, especially with development of 4G technology on the horizon and operators looking at ways to bypass the licensing process.

Delays in the 3G licensing process had been blamed on the government’s failure to establish the NBTC, although the Council of State, the government’s legal advisory body, had ruled in late 2007 that the NTC could assign UMTS frequencies in the absence of the new regulator. This was despite the fact that it was intended that a new regulator would have responsibility for the assignment of spectrum suitable for broadcasting/multimedia applications. The NTC would also be able to monitor the progress in establishing 3G networks once the licences had been awarded.

In the meantime, the NTC indicated that it was preparing to allocate a 45MHz block of spectrum in the 2100MHz band (a 2x15MHz block, in the 1965-1980MHz and 2155-2170MHz ranges, was previously awarded to state-owned Thai Mobile, which had subsequently failed to launch a 3G service). The commission was also seeking public comment on the methods for allocating the frequencies, the number of licences to be awarded to operators, and the conditions of licensing.

The NTC announced in 2008 that it was expecting to award licences for 3G mobile phone services by the second quarter of 2009 and that this would be ‘with or without the presence of a new regulator’. It was proposed that draft rules be completed by the end of 2008. By late 2009 the stalemate on issuing of 3G licences remained, with no firm plan of action in place.

By 2010 the NTC was insisting that the long-awaited 3G-spectrum auction would take place in September of that year. As the assigned auction date approach, all three private mobile operators – AIS, DTAC and True Move – lodged their applications for 3G licences and the THB1.28 billion (US$43 million) deposit required to participate in the auction.

Just days before the auction CAT Telecom launched a legal challenge to stop the auction, charging that only the proposed NBTC was legally entitled to conduct the auction. The Administrative Court upheld the complaint and granted an injunction prohibiting the auction from proceeding; an attempt by the NTC to have the ruling overturned by the Supreme Court failed. After this setback, control of the licensing process looked likely to be shifted to the new NBTC once it was established. This was potentially a setback to efforts to overcome the entrenched concession system.

For more information on the issuing of 3G licences in Thailand, see chapter 10.5.5, page 88.

3.2.2 WiMAX

In 2008 the NTC moved to finalise licensing terms and regulations for WiMAX-based wireless broadband internet services with a view to issuing operating licences in 2009. The NTC said it had given permission to 14 companies to test WiMAX for three months and was waiting news on their test results.

The companies included True Move, True Universal Communications, Nokia Siemens Networks, Ericsson, Loxley, CAT Telecom, TOT, Samart Telcoms-Provincial Electricity Authority, Transpacific Thailand, Triple T Broadband, Shin Satellite and United Communication Industry. Longer-term WiMAX tests were also being conducted by Mae Fah Luang and Rajabhat Maha Sarakham universities. The NTC said the commercial WiMAX bandwidth selected might be in the range of
2.5GHz in preference to 3.5GHz because, based on test results received so far, the latter range interfered with satellite communications.

In May 2010 the NTC said it was considering by-passing the long-delayed plans for 3G licences and jumping straight to LTE/WiMAX licences later in 2010, most likely in September.

The NTC announced in September 2009 that it planned to issue WiMAX licences shortly after the 3G licence auction that was planned for later in 2009. As noted in chapter 3.2.1, the 3G licences were not awarded in 2009; or in 2010. In fact, it was not likely to happen until the NBTC, the new regulator, is established some time in 2011.

For more information on the licensing of WiMAX services in Thailand, see chapter 8.7.2, page 71.

3.2.3 Registration of prepaid mobile services

In 2005 the government announced new rules regarding the registration of prepaid mobile phones.
Under the regulation of goods classified as commodities, all mobile phone users were required to legally register their numbers. The country’s five mobile phone service operators were required to register all their subscribers by end-2005.

3.3 REGULATORY DISPUTES

The telecom market in Thailand is a constant legal battleground, with numerous disputes between the players being resolved in courts or before arbitrators. A number of examples follow:
 2005: the NTC rejected TOT’s claim for compensation of THB13 billion (US$317.9 million) for investments in telecom services in remote areas. The telco had also been negotiating with the NTC to reduce its licence fees to THB1.0 billion (US$25.4 million) a year from over THB5.7 billion (US$144.6 million). Adding to TOT woes was the prospect of facing as many as seven lawsuits from private operators claiming the incumbent had overcharged for carrying their customers’ calls to different networks. The lawsuits had a combined claim value of THB50 billion (US$1.2 billion).
 2006: the Arbitration Court ordered TOT to pay True THB9 billion (US$230 million) plus interest in lost revenues to settle network access charge claims dating from 1990 to 2002; TOT appealed and the Administrative Court subsequently overturned the verdict, leading to a counter-claim from True.
 2007: True Move won its battle with TOT over interconnection fees. TOT was ordered by an arbitration committee to pay THB9 billion to True Corp. TOT planned to appeal, however if the appeal failed TOT would be liable for up THB14 billion.
 2007: Thailand’s Administrative Court ordered TOT to reactivate connections between its fixedline networks and True Move’s mobile network while their dispute was being litigated. TOT had disabled calls from its fixed-line networks to new mobile numbers from True Move and DTAC after both companies stopped paying interconnection fees to TOT. The MICT had previously ordered TOT to reactivate the connections.
 2008: TOT was ordered by an arbitration court to pay its concessionaire TT&T the sum of THB24 billion (US$750 million) in returned revenues, fees and tax backdated to a period to 2005. In addition, TOT was ordered to pay a portion of revenues to TT&T until the expiration of its current revenue-sharing concession. The arbitration panel concluded that TOT had introduced other services in addition to fixed line telephony over infrastructure built and maintained by TT&T at a cost of over THB1 billion per year, but had not offered to share additional revenues with the private operator.
 2009 (February): True Move said that, following a lawsuit it had earlier filed with the Administrative Court against TOT, the court had ordered TOT to pay compensation to True Move. Specifically it ordered TOT to interconnect with True Move’s 1.5 million numbers issued by NTC; pay compensation of THB 1 million; refund the jurisdiction fee in proportion to the award granted to True Move.

For information on regulatory issues in:
 the mobile market, see chapter 10.4, page 84;
 the internet market, see chapter 7.5, page 66;
 the broadcasting market, see chapter 9.2, page 74.

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4. FIXED NETWORK MARKET

4.1 BACKGROUND

State-owned TOT has played a major role over a considerable period in the building of Thailand’s national telecommunications infrastructure. As the early regulator responsible for national telecommunications, TOT set up two concessions under BTO contracts for the development of Thailand’s fixed-line network. TelecomAsia, a company which had local conglomerate, the CP Group, and US-based Verizon Communications as its major shareholders, was awarded the development of the Bangkok Metropolitan Area (BMA), while TT&T was awarded a contract for all provinces outside the BMA. After completing the respective network builds in 1996 both TelecomAsia and TT&T transferred their completed networks to TOT and began the ‘operate’ term of their respective BTO concessions.

The fixed-line telephone concessionaires were required to build out their entire networks at one time rather than a phased-build based upon user demands. This led to high up-front expenditure in the early years for the concessionaires, so they had to focus on driving network utilisation and revenue generated from connected lines.

The biggest challenge for the fixed-line operators became how they could compete or effectively coexist with the mobile operators. Longer term, further growth in the fixed-line voice sector was expected to mostly come from the introduction of new value-added services.

4.2 STATISTICS

Table 7 – Fixed lines and teledensity – 1995 - 2011

Table 8 – Fixed-line subscribers by operator – 2008; 2010

Table 9 – Fixed-line subscribers – metro vs provincial – 2010

4.3 NEXT GENERATION NETWORK (NGN)

There has been a lot of talk in Thailand about upgrading national infrastructure and building an NGN.
The first sign of real action occurred when the NTC launched a trial NGN network in Phuket in 2009.
The main objective of this project was to study and evaluate the impact and benefit of migrating from legacy networks to an NGN. The move was also consistent with another national strategy which had nominated Phuket as one of the ICT centres for priority development.

Prior to this move, the TOT board approved an investment of THB64 billion (US$2 billion) in 2007 aimed at increasing the proportion of broadband revenue to 70% of total earnings by 2010, compared with 30% at the time. The TOT program include expenditure totalling THB16 billion (US$506 million) allocated annually until 2010 to convert its core fixed-line network to an NGN. The operator forecast revenues of between THB50 billion (US$1.5 billion) and THB63 billion (US$1.9 billion) in 2010 once the NGN was complete. Despite the rhetoric about a complete NGN by end-2007 TOT had committed less than 10% of the required amount by that stage. The MICT started developing a national broadband policy in 2010. For information on the policy, see chapter 8.3, page 69.

4.4 PUBLIC PAYPHONES

The public payphone infrastructure has been a feature of the Thai telecom market for many years. By 2009 the total number of payphones in the country was close to 300,000. This was well down from a peak of 370,000 early in 2006, possibly as the payphone market found some equilibrium with the booming mobile market and the operators were more tuned into those payphones that were cost effective. There had in fact been demand for more payphone services but operators were cautious as they faced competition from the payphones that were already installed. For the fixed-line operators, if a payphone could be effectively located, they were sources of high revenue – typically THB2,000-4,000 per phone per month, at least double the revenue generated by a business telephone line.

Thailand has six operators that are licensed to offer payphone services:
 CAT;
 TOT;
 True (TelecomAsia);
 TT&T;
 AIS;
 Lenso DataCom.

TOT has continued to dominate the Thai payphone market.

Table 10 – Public payphones in service – 2004 - 2010

Table 11 – Public payphones by provider – 2009

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5. MAJOR OPERATORS

5.1 OPERATING ENVIRONMENT FOR OPERATORS

5.1.1 Market overview

Bangkok dominates the socio-economic landscape in Thailand with 25% of the nation’s population and 85% of its wealth generation capacity. Not unexpectedly, successive governments have made it a priority to ensure that the rest of the country was not left behind. In this regard, the provisioning and operation of a telecom network that reaches the vast majority of the population has been an important element. The services provided must be both accessible and affordable. Thailand has generally seen to be succeeding in this strategy. Although coverage had not yet reached 100%, the effort was considered commendable and certainly a basic telephone service has become affordable to an increasing
proportion of the population.

With around seven million fixed-line subscribers by end-2010 (for a fixed-line penetration of 10%), the country had three fixed-line operators directly supporting these domestic fixed-line services. The stateowned TOT Corp had the majority of this market with 56%, whilst True Corp (formerly Telecom Asia) was in second place with 27% of the fixed subscribers and TT&T completed the set with 17%. TOT had national coverage including both the Bangkok Metropolitan Area (BMA) and the provinces, while True Corp’s market was confined to the BMA and TT&T’s specifically covered the provinces and was excluded from the BMA.

In the meantime in the other area of so-called ‘fixed’ network activity, international operations, we find two players, both government-owned. CAT had been assigned the sole right to provide international telephony for Thailand with the exception of connectivity to neighbouring countries; connectivity to neighbouring countries came under the jurisdiction of TOT.

Exhibit 2 – Major operators by market segment

5.1.2 Historical background

Thailand’s telecom networks had basically been the responsibility of the two big government enterprises, the Telecommunications Organization of Thailand (TOT) and the Communications Authority of Thailand (CAT). These two organisations have dominated the Thai telecoms market for many years, with both direct and indirect involvement in operational activities. Earlier on these two entities had also been responsible for the country’s regulatory environment. In broad terms CAT was the nation’s international telephony provider while TOT had been providing local and long-distance calls.

As with the other segments of the telecom market, the government came to the realisation that it did not possess the financial or technical resources to successfully develop the nation’s fixed-line telephone network. As a consequence, TOT issued two concessions under Build-Transfer-Operate (BTO) contracts for the development of fixed-line networks. TelecomAsia, a company with the CP Group and US-based Verizon Communications as its major shareholders, was awarded the development of the BMA, while TT&T was awarded a contract for all provinces outside the BMA. Unlike TOT, CAT did not issue concessions for the provision of international telephony and continued to maintain the country’s international switches in its own right.

The explosion in the mobile phone market in Thailand over the last decade has seen the fixed-line operators having to work hard to retain market share and revenues. The number of mobile phones raced past the number of fixed lines in 2001 – despite the TOT’s earlier prediction that this would not occur before 2005!

The market for fixed-line telephones had also been less attractive for consumers because of a THB3,000 (US$78) deposit, payable in advance, in addition to a costly connection fee. Customers on mobile networks were not required to pay deposits, immediately making it a much cheaper option.
However, fixed-line operators, including the TOT, started to fight back with services such as data transmission for the corporate market, and new marketing campaigns. They quickly accepted that when it came to voice services in Thailand, they would not be able to compete so easily with the mobile services.

The two private fixed-line operators, True Corp and TT&T, have continuing to review their respective business models and try to adapt to the changing market conditions. With the surge in demand for broadband internet access from 2004 onwards, the two operators announced that they were considering ways to work together in marketing both fixed-line and broadband internet services.

The companies said that the cooperation would not result in a merger or a joint venture. Indicative of the changing business landscape, True had 1.9 million fixed-line subscribers and 825,000 broadband internet subscribers by 2010, whilst TT&T had 1.2 million fixed-line subscribers and an estimated 50,000 broadband subscribers.

5.1.3 Mobile market

The Thai mobile market has seen the two big established operators, Advanced Info Service (AIS) and Total Access Communications (DTAC), competing vigorously for customers. In 2002/03, they were joined by three new players – TA Orange (later called True Move), Hutchison CAT and Thai Mobile – with mixed impact on the overall market.

By early 2009, the big two operators were still holding 74% of the total market between them, while True Move had managed to grab 24%. The other players had not developed any significant role in the market. Coming into 2009, following the Thai economy’s serious downward dive, there were all the signs of a major slowdown in the country’s mobile market.

As the operators battled for a share of what up until 2008 had been a booming market, mobile customers in Thailand were being offered progressively cheaper tariffs and special deals with the operators competing on price and packages. The total mobile subscriber base went from almost four million subscribers in 2000 to 63 million by early 2009.

DTAC and TA Orange/True Move, in particular, waged aggressive marketing campaigns to attract new subscribers. The Hutchison CAT venture, which had been built on the back of Tawan Mobile, struggled to establish itself in the market after encountering problems with its Code Division Multiple Access (CDMA) service. And Thai Mobile was launched to throw out an interesting, if somewhat confusing, challenge to the market.

In early 2008 the Thai mobile market was being reshaped by events, with the various players being part of the considerable manoeuvring that was going on. The board of TOT announced that it was considering a new proposal to buy CAT Telecom’s 42% stake in their mobile joint venture Thai Mobile.

CAT’s board had already approved selling the shares in a deal that would make TOT the 100% owner of the struggling GSM business with its 60,000 subscribers; however the deal had stalled as the two failed to agree on terms. CAT wanted to focus on its CDMA2000 1x-based mobile services in partnership with Hutchison. TOT wanted to take full control of Thai Mobile to utilise its 1900MHz spectrum to launch the country’s first 3G WCDMA service. CAT had agreed to sell its 42% stake in Thai Mobile to TOT for THB2.4 billion (US$77 million), a price based on a 2004 valuation.

At the same time, TOT signed a Memorandum of Understanding (MoU) with True Corp on a partnership arrangement to share network resources and jointly develop new services. TOT had earlier signed a similar MoU with AIS to jointly develop converged fixed line and mobile services, including the option of WCDMA services on the 900MHz frequency band. Meanwhile, CAT had teamed up with DTAC to trial WCDMA/HSDPA technology in the 850MHz band, in conjunction with technology provider Ericsson. The TOT board had also approved the testing of broadband internet access via power lines, to complement its existing DSL broadband operations.

The long-awaited advent of 3G was causing some tensions in the marketplace. AIS had warned in 2008 that the telecom regulator should be careful about allowing DTAC and True Move to provide broadband mobile services on the 850MHz band because it may breach concession terms and bring about legal disputes.

The comments came after CAT Telecom officially asked the National Telecommunications Commission (NTC) to allow DTAC and True Move to import High-Speed Packet Access (HSPA) equipment to provide 3G services. AIS said that although the 850MHz band was within the 800MHz frequency range owned by CAT Telecom and granted to DTAC to provide mobile service, allocating the unused 850MHz slot to DTAC to provide 3G could breach the terms of its CAT concession, requiring an amendment of the concession terms and cabinet approval under the 1992 joint private public investment law.

AIS said that in the case of True Move the operator provided services on the 1800MHz band and held no rights to the 800MHz band. Therefore it could be a clear breach of the concession terms. AIS said that given the legal concerns, it was reluctant to provide mobile broadband on a major scale on its 900MHz band and had therefore selected only Chiang Mai for a limited commercial launch.

There were technical limitations as well, since HSPA customers were mostly concerned with sending and receiving data, which could create congestion affecting other AIS customers. AIS and other operators were improvising when it came to 3G, all preferring clarity of policy on use of the 2100MHz band, which was the 3G standard favoured by the International Telecommunication Union (ITU).

Despite the vigorous competition there have been moments of cooperation. The country’s three largest mobile operators – AIS, DTAC and True – reported in 2009 that they were working together to block spam SMS messages. The three operators had jointly invested THB30 million in the anti-spam SMS system.

In the meantime, the NTC was drafting the licensing regulations for Mobile Virtual Network Operators (MVNO).

Private mobile operators were looking at alternatives for 3G services after the Central Administrative Court issued an injunction in September 2010 against a planned 3G licence auction to private operators.

In November 2010 the board of CAT Telecom gave in-principle approval to allow two of its concessionaires, DTAC and True, to offer 3G mobile phone services commercially. However, it still needed to study related legal issues before it could give the final green light to the two private companies. DTAC and True had already been offering partial 3G services on a trial basis in Bangkok and key provinces for around two years, using High-Speed Packet Access (HSPA) technology on 850MHz. AIS was also seeking a deal with TOT, its concession granter, to become an MVNO using TOT’s 3G network as well as to migrate some of its customers from its 2G service to that TOT 3G service.

5.1.4 Operator statistics

Table 12 – Fixed-line operators and subscribers – 2009

Table 13 – Mobile operators, subscribers and annual change – 2010

Table 14 – Mobile operators, subscribers and market share – 2010

Table 15 – ARPU (postpaid, prepaid, blended) for major mobile operators – 2010

5.2 MAJOR OPERATORS

5.2.1 Advanced Info Service (AIS)

5.2.1.1 Overview
AIS is Thailand’s leading mobile operator with around 43% of the country’s total mobile subscriber base by end-2010. Significantly the operator’s share of the market revenue was even higher, being reported at around 50%.

The major shareholders in AIS were Shin Corp with a 42.55% stake and SingTel with 21.28% as of November 2010.

Originally established in 1986, AIS leased and maintained computer systems. Then, in 1990 AIS successfully acquired a 20-year build-transfer-operate (BTO) concession for a mobile network from TOT. It began offering mobile services using NMT 900 technology. That concession was later extended to 25 years. Conditions of the concession extension were that AIS would introduce a digital mobile telephone service by 1994 and that TOT could introduce another mobile provider to the market.

AIS has maintained its position as the leading mobile operator in Thailand, under some stiff competition from rival operators. A reduction in handset costs and the success of its prepaid services have seen the company continue to meet its ambitious forecasts. The operator’s market share has been declining but still remains robust as AIS kept its focus on expanding to meet demand.

After launching Apple’s iPhone 4 in September 2010, the company reported around 50,000 customers for the device.

Prepaid net additions in the September 2010 quarter reached 467,000, substantially higher than the 296,000 added in the September quarter of 2009, this rise being attributed to Thailand’s economic recovery and the growth of pre-paid internet SIM data packages, although the growth figure was slightly down from 478,000 net pre-paid additions in the June 2010 quarter. Postpaid net additions reached 27,000 in the third quarter of 2010, up from 20,000 in the previous quarter but down from 84,000 in the corresponding three months of 2009.

However, the operator, along with the rest of the sector, was expecting to face slow growth after plans for the introduction of 3G mobile licences were blocked, as most growth was potentially in non-voice areas. This was despite what should have been an improved market with better economic conditions prevailing after the poor year experienced in 2009.

5.2.1.2 Key drivers
AIS noted that by 2008 its key growth drivers were:
 higher penetration in rural areas;
 improving voice revenue in a stable price environment;
 strong 15%-20% growth in non-voice services;
 a higher contribution from the International Direct Dialling (IDD) business.

The operator said in 2010 that the key market drivers shifted to:
 a continuing developing trend in online/mobile social networking;
 limited availability of landline internet access;
 a continued reduction in device costs;
 a higher use of smartphones.

5.2.1.3 Statistics

Table 16 – AIS: subscribers and market share – 2004; 2007 - 2010

Table 17 – AIS: mobile subscribers and ARPU (postpaid and prepaid) – 2010

Table 18 – AIS: ARPU (postpaid, prepaid and blended) – 2007 - 2010

5.2.1.4 Financials
The number of data users had increased to 5.7 million by March 2010, up from 5.3 million at the end of 2009 and 4.7 million in March 2009. Data service revenue rose 37% year on year-with the contribution from mobile internet rising to 34%, up from 24.5% a year earlier. The company said social-networking and news alert subscriptions were becoming more familiar to Thai consumers.

A further jump in non-voice saw almost eight million using non-voice services by June 2010, AIS having just over 30 million subscribers by that stage.

Table 19 – AIS: proportion of revenue from non-voice – 2008 - 2011

AIS reported its capital expenditure for 2010 at THB5.0 billion, well down from THB9.9 billion in 2009. The company said it was waiting on a clearer timeline for the issuance of 3G licences before committing to substantially increase capex.

Table 20 – AIS: capital expenditure – 2008 - 2011

Chart 1 – AIS financials – 2007 - 2010

5.2.1.5 Developments
In February 2011 it was reported that China Mobile and Japan’s NTT DoCoMo had expressed an interest in proposing business models to financially support the operations of AIS. AIS was facing the possibility of being hit by a compensation bill of THB74 billion (US$2.4 billion) stemming from past changes to contracts with state agencies, with the knock-on risk of defaulting on the large damages payment. It was understood that the two telecom giants had met the MICT and TOT, the issuer of the AIS network concession, to discuss a future role for the foreign companies. SK Telecom of South Korea has also been kept abreast of developments by the Thai government. The MICT was waiting for final calculations of compensation claims from TOT and sister operator CAT Telecom as well as private operators serving on a committee overseeing the talks on the damages case.

5.2.1.6 3G strategy
AIS has committed to a 3G mobile rollout having indicated in early 2009 that it would spend a THB20 billion on 3G in each of the following three years, but that the investment would begin only when the licences were granted.

As far back as 2005 a request by AIS to start trial 3G services had been rejected by the NTC, citing regulatory uncertainty until the status of the proposed National Broadcasting Commission was clarified. AIS reported at the time that it had set aside US$400 million for network improvements during 2006, half of which was for the rollout of a 3G network.

The company launched a 3G mobile service in Chiang Mai in 2008, with coverage initially limited to a 30-base station 900MHz network upgraded with WCDMA/HSDPA technology. It said the Chiang Mai venture was just a trial due to its limited bandwidth and the fact that only a handful of handsets were 3G-capable. It subsequently indicated that it would be postponing any further trials as the NTC continued to run behind schedule in approving equipment imports.

AIS updated its 3G rollout plans in 2008, announcing that it intended to invest THB20 billion (US$610 million) in developing 3G voice and data services in the 2100MHz spectrum band. The plan called for deploying 3G base stations nationwide, focusing on Bangkok and those provinces with high population density and high demand for mobile broadband services. AIS said that the upgraded 900MHz network would be used for voice-based traffic instead of data when the NTC eventually issued the promised 2100MHz UMTS operating licences. AIS also still needed NTC approval to import equipment for 900MHz 3G services in Bangkok and another 20 major provinces.

AIS subsequently provided more detail around its 3G roll-out plans saying that it would invest THB25 billion (US$735 million) each year from 2009 to 2011 if it were granted a licence for 3G services ‘in the second quarter of 2009 as expected.’ Of the THB25 billion capex, around 80%-90% was earmarked specifically for 3G infrastructure and operations. Once 3G expenditure was completed, the company expected annual investment spending to fall to about THB10 billion from 2012. It also confirmed a plan to expand commercial 3G services to Bangkok and other major cities. The NTC finally gave permission in 2008 for AIS to import 3G/3.5G equipment for a UMTS-900 network rollout that included Bangkok.

Late in 2008 AIS was moving to scale back spending on infrastructure for its proposed 3G network.
The company had reduced its 3G budget for 2009 to US$150 million, just a quarter of the US$600 million it had originally allocated. It also cut the planned size of the network, reducing the number of provinces to initially be covered from 20 to 10. The budget for developing 3G services by mid-2009 included the rollout of a maximum of 300 base stations in 10 provinces. The company said that sparse demand and the global economic situation had prompted the budget cuts. As with the other operators, AIS was waiting on the government to issue the 3G licences.

In August 2010 TOT agreed to allow AIS customers to roam on the TOT 3G network for data services in exchange for voice roaming by its customers on the AIS nationwide 2G network. Under the deal TOT would allow 50,000 AIS mobile numbers to roam on TOT’s 3G network for data services, while AIS would let 200,000 TOT mobile numbers access its voice services on its nationwide 2G network.
The roaming service was on a six-month trial basis. During the trial period, TOT would conduct detailed technical testing to determine whether the roaming affected customers of its MVNOs.

By October 2010 AIS was seriously looking at 3G alternatives, after the NTC’s 3G auction plans collapsed in September. The operator was considering a deal with TOT to become an MVNO using the TOT network. In addition AIS was also seeking to expand its roaming arrangement exchanging roaming on its less advanced 2G service for roaming on TOT’s 3G service.

5.2.1.7 AIS/Advance Datanetwork Communications (ADC)
Thai mobile operator AIS said in late 2004 that it was launching a broadband internet service. It was set to do so in its joint venture data business with TOT. The joint venture was called Advanced Datanetwork Communication Ltd (ADC), with AIS owning 51%, while TOT held a 49% stake.

ADC awarded Siemens a contract in early 2005 to provide, install and maintain its proposed nationwide Ethernet-based broadband network. While targeting an initial 200,000 broadband subscribers, the ISP said it was preparing to provide high-speed internet access bundled with a variety of online services. The company’s bundled broadband service was branded Buddy Broadband.

The DSL-based Buddy Broadband was launched in 2005. As well as providing the service via personal computers, ADC said it was also to be offered through traditional television sets. It was looking at offering customers high-speed internet access through television, television reception over the internet and VoD, turning the television into a complete home entertainment and communications centre. With Thailand’s television penetration rate at almost 100%, ADC said it believed business opportunities were attractive and that it was keen to move on to the next level, which was to expand its service offerings to include online gaming as well as VoIP and video telephony.

Equipment supplier Siemens selected Amino, a leading IPTV set-top box supplier, in 2006 to deploy Thailand’s first IPTV system for ADC. The system, which was to be offered over ADC’s broadband service, had already been rolled out to a significant number of homes over a period of several months.
The company said it was adding on-demand and broadcast television channels to its broadband service offering.

By end-2006, ADC had signed up 7,500 broadband subscribers, far short of its sales target of 80,000 customers by the end of 2005.

It has been difficult to obtain up-to-date subscriber numbers for ADC. However, based on the overall size of the Thai market and the subscriber numbers declared by the larger players, it was estimated that ADC had around 30,000 broadband subscribers by 2010.

5.2.1.7.1 WiMAX
AIS let it be known in early 2005 that it was applying for a licence to start operating both WiMAX and WiFi services. It was pointed out at the time that AIS had 3.3 million customers with multimediaenabled handsets, of which 2.4 million (70%) were active data service users.

The mobile operator outlined plans in 2008 to spend THB1.5 billion (US$48 million) on the first phase deployment of a WiMAX network. The operator said it would install between 350 and 450 base stations in suburban areas and major cities, as well as areas where there was no fixed-line network. AIS was among the 12 companies to have received a WiMAX trial licence. In 2010 the company was still waiting for the government to issue full WiMAX licences.

5.2.2 DTAC

5.2.2.1 Overview
Total Access Communications (TAC), which later moved to trading under the DTAC brand, has been successfully operating in the Thai mobile market establishing itself as the country’s second-ranked player in terms of both subscribers and revenue. By 2010 the operator, with almost 22 million mobile subscribers, had slightly more than 30% of the total subscriber base.

The company was founded in 1989 and secured its 15-year BTO concession from CAT in 1990. Its concession, which had been extended twice since the initial signing, remains valid until 2018. Initially it was licensed to provide mobile wireless telecom services in 800 MHz and 1800 MHz frequency bands.

TAC was able to introduce an experienced foreign partner to its business when its parent company UCOM successfully completed a debt-restructuring plan back in 2000 that saw Norway’s Telenor secure 30% of TAC stock. This move provided a real boost to TAC, the company subsequently embarking on an aggressive marketing campaign, branding its mobile service DTAC. At the time, UCOM held a 42% stake in TAC, with Telenor possessing a 25% stake in UCOM. By 2009 the Total Access Communication PCL’s share register indicated that Telenor’s stake had risen to 33.96%.

5.2.2.2 Statistics

Table 21 – DTAC: subscribers and market share – 2002 - 2003; 2005 - 2010

Table 22 – DTAC: mobile subscribers and ARPU (postpaid and prepaid) – 2010

Table 23 – DTAC: ARPU (postpaid, prepaid and blended) – 2008 - 2010

5.2.2.3 Financials
For the 2009 year, DTAC had aimed to sign up between 1.4 million and 1.6 million new subscribers. 
However, because of the domestic economic downturn, DTAC said it had shifted its direction to focus on customer retention, cost efficiency and conservative capital expenditure. Revenues in the June 2009 quarter slipped 5% to THB16 billion, down from THB16.9 billion achieved in the same quarter in 2008. The company said it was slashing its 2009 marketing budget by 20% in an effort to control costs.
It expected that the strong growth in data services would help offset falling roaming revenues. 
DTAC turned to a positive net cash position by September 2010, aided by strong cash flow generation. In late 2010 DTAC said that, without any progress on 3G mobile licensing, capital expenditure was likely to be between THB4 billion to THB5 billion in 2011, a similar level to 2010.

5.2.2.4 3G strategy
As part of its ongoing development, DTAC has committed to moving into a full scale 3G service on the 2100MHz spectrum once the licensing process is finalised by the regulator.

The operator had commenced talks with CAT in 2008 to form a joint venture company to provide 3G services on its 850MHz frequency. The company seemed keen to rapidly move into the 3G business following rival AIS launching a commercial 3G services in Chiang Mai. DTAC said it expected to roll out limited commercial 3G services by the end of 2008. The plan was to upgrade its analogue 850MHz frequency to High Speed Packet Access (HSPA) once it received approval from CAT Telecom.

CAT Telecom gave approval in mid-2008 for both DTAC and True Move to start developing 3G mobile services in the 850MHz frequency band. In return for its approval of WCDMA/HSPA services in the 850MHz band, CAT required both mobile operators to co-brand with CAT while also reverting to ‘mainly’ using CAT’s international voice gateway instead of their own facilities. In the meantime, the NTC gave approval for DTAC to import HSPA equipment for a commercial 3.5G deployment using the 800MHz-850MHz band. DTAC started a trial of a 3G mobile service in Bangkok in 2009.

DTAC had been anticipating that the NTC would issue the UMTS 3G concessions outside of the BTO licence framework by the end of 2008, paving the way for full scale commercial 3G/3.5G networks to be rolled out. However these licences did not eventuate.

In 2010 DTAC petitioned the Thai government to intervene in what it described as unfair treatment by CAT Telecom in approving the expansion of its non-commercial 3G trial service. DTAC had been offering partial 3G services on a trial basis in Bangkok and key provinces for around two years, using an HSPA platform. However, it claimed CAT Telecom had only provided the company with 36 sites for the HSPA trial service while at the same time True, another CAT Telecom concessionaire, had more than 600 sites.

In the meantime, DTAC was still waiting for the 3G licences to be issued by the government.

5.2.3 True Corp

5.2.3.1 Background
Established in 1992, TelecomAsia, which re-branded itself as True Corporation in 2004, has become one of the largest providers of telecom services in Thailand including fixed-line telephone, mobile telephone, cable TV, multimedia, internet and wireless communications. As one of the two concessions awarded by the TOT under BTO arrangement for the development of fixed-line networks, TelecomAsia was assigned the joint operations and joint investment contract for the Bangkok Metropolitan Area (BMA).

The company moved quickly to roll out the required network and started providing a range of additional telecom services over its 2.6 million line fixed network which covering greater Bangkok and vicinities (including Nonthaburi, Samutprakarn, Patumthani).

When the company re-branded itself as True in 2004, all its subsidiaries and products subsequently included True in their names. The mobile unit become True Move; Asia Infonet, the company’s ISP, became known as True Internet and subsequently as True Online.

5.2.3.2 Company structure and financial history

Exhibit 3 – True Corp’s major shareholders – March 2010

The company had undergone numerous changes in shareholdings to get to the point set out in Exhibit 2 above. The giant Thai conglomerate, the Charoen Pokphand (CP) Group long held a substantial stake in TelecomAsia, while at one stage Germany’s KfW owned 18.9% of the company. TelecomAsia and the CP Group were also been part of a series of mergers and acquisitions that saw the establishment of a mobile operator, TA-Orange, in which France Telecom’s mobile arm, Orange SA, held a 49% stake and the remaining 51% was held jointly by TelecomAsia and the CP Group.

US-based Verizon communications had also been a stakeholder with 13.8% of the company, but sold its shares in 2003. Verizon’s exit was seen at the time to have considerably undermined investor confidence in the Thai fixed-line sector as the US operator sold its stake at far below market value. It sold to the CP Group, which consequently lifted its stake to 47%. Verizon said its withdrawal from Thailand was part of a strategy to focus on the US market.

For a long period the corporation has struggled with a significant debt burden. Following the Asian economic crisis of the late 1990s, the then TelecomAsia was hit by sharp foreign exchange losses and after the Thai baht was devalued in 1997 it saw its debt level blow out. The operator has worked steadily at getting its debt under control.

By 2003 it was able to announce that it would reduce its debt to about THB40 billion (US$930 million), thereby removing some of the debt that had been a major drag on the company since the Asian crisis. Telecom Asia had sold about THB22 billion in bonds to refinance foreign debt over this period. After a THB2.4 billion (US$60 million) amortising of secured seven-year debentures in 2004, the proceeds were used to refinance True’s last tranche of dollar-denominated debt, US$52 million from KfW. This was a significant move as it effectively eliminated the company’s US dollar denominated foreign exchange risk.

True Corp’s financial results for 2004 were an important milestone for the company because the net profit it declared for that year represented the first profitable full year since the 1997/98 Asian economic crisis. As an indication of the company’s possible future direction, the results were also boosted by the increasing popularity of True’s broadband internet service, a sign of things to come.

In early 2004 TelecomAsia sold a package of shares to the International Finance Corporation, its creditors and specific investors through private placement with the aim of raising fresh capital for business expansion.

TelecomAsia continued to argue against its concession conditions. In 2003 it was saying it should not have to pay more than a 5% revenue share if its concession was converted under the proposed excise tax framework announced by the government. If the company was forced to pay more, it believed a tax rebate should be offered in fairness to the company’s shareholders and creditors.

On the strategic front, True Corp has maintained that it is still strongly committed to investing in 3G mobile broadband opportunities.

5.2.3.3 Financials
Despite improved financial results the company continued to struggle with its debt. Debt levels had reached THB110 billion by 2008; with debt payments of THB5 billion due in 2009 and a further THB10 billion in 2010. The company reported debt repayments of THB5.7 billion in 2010. This left a consolidated debt of THB67 billion by year end.

Table 24 – True’s total revenues – 2004 - 2010

In November 2010 True Corp said it expected revenue growth of 5%-6% in 2011, driven by its broadband, mobile and pay television businesses. Broadband revenue was expected to see growth in 2011 at around 15%. True Corp reported total revenues of THB62 billion (US$2 billion) in 2010.
Revenue grew by only 1% in the year, due, among other things, to a decline in fixed-line income.

Table 25 – True Corp: capital expenditure – 2007 - 2011

Chart 2 – True Move financials – 2007 - 2010

5.2.3.4 Fixed-line services
True’s fixed-line business is part of the True Online subsidiary. This unit also includes its fixed broadband capability. The fixed line business has a relatively static subscriber base, together with a declining ARPU. The once lucrative payphone business is now also in decline, a victim of the wide acceptance and application of mobile services throughout the market.

Table 26 – True’s fixed-line subscribers – 2004 - 2010

Table 27 – True’s fixed line ARPU – 2004 - 2010

Table 28 – True’s payphone ARPU – 2004 - 2010

5.2.3.5 True Move

5.2.3.5.1 Overview
True Move, the mobile unit of the True Corporation, has grown out of an interesting series of alliances and partnerships.

A mobile subsidiary, TA Orange, was established in 2001 as an alliance between TelecomAsia and French operator Orange SA. When TA Orange launched into the Thai mobile market in 2002 it was a relative latecomer, the two big mobile players, AIS and DTAC, having already become well established by then. The new operator moved strongly into the market, however, rolling out a US$800 million GSM 1800 network which also incorporated GPRS. Orange subsequently left the partnership, selling its stake in 2003. The Orange brand was retained until the unit was rebranded True Move in 2006.

True Move has proved to be both innovative and competitive in the local market. By early 2011 it had grown significantly to pass the 17 million subscriber milestone, a subscriber base representing around 24% market share. Its revenue share was estimated to be running at about 16% at the time. In a slowing market, True seemed keen to maintain its subscriber growth momentum and was looking to pursue a major 3G roll-out.

In 2009 True Move started selling the iPhone. Continuing to leverage significant advantage from its broad telecom portfolio, True Move provided iPhone 3G customers with access to True Online’s WiFi network with connectivity via 16,000 hotspots nationwide. True Move subsequently started selling the 8GB model of the 3G iPhone, as well as announcing the launch of the 16GB and 32G.

True Move confirmed In November 2010 that it was in negotiations to take over Hutchison CAT Wireless Multimedia (Hutch), the country’s CDMA2000 mobile operator. True had resumed negotiating with Hutchison Telecom International Limited (HTIL) as a possible alternative model for its 3G business plan.

The acquisition could be a shortcut for True to provide 3G mobile broadband services in the absence of UMTS licensing, after the auction process had been suspended until 2011 following legal disputes.
Hutch’s remaining five-year marketing contract was the major attraction, allowing it to offer services over 850MHz. Furthermore, the contract could be renewed after it expired because it was a marketing agreement rather than a concession.

True Move closed a deal with HTIL at the end of 2010 to acquire the business. In March 2011 following the acquisition TrueMove rebranded the service as ‘TrueMove H’. The company said it planned to launch commercial 3G services on existing 850MHz spectrum in conjunction with the launch of the new brand.

5.2.3.5.2 Statistics

Table 29 – True Move: subscribers and market share – 2004 - 2010

Table 30 – True Move: mobile subscribers and ARPU (postpaid and prepaid) – 2010

Table 31 – True Move: ARPU (postpaid, prepaid and blended) – 2007 - 2010

5.2.3.5.3 Financials
True indicated that its capital investment in the mobile business in 2009 was to be maintained at a similar level to 2008. At the same time True Corp said that it would probably need additional funds to help finance its bid for a 3G licence and was intending to raise up to THB19.5 billion via a rights offering. The company subsequently indicated that it would invest THB8 billion to expand its mobile network in 2009. Of the total investment budget, THB5 billion had been earmarked for the company’s 3G network and THB3 billion for its 2G network.

The company’s mobile unit True Move posted twelve-month service revenue (excluding interconnection charges) of THB23.6 billion, representing about 38% of total service revenues. The result was up slightly on 2009, supported by growth in both postpaid (9%) and non-voice (13%). Rising mobile internet and smartphone usage drove the strong growth in non-voice revenue, with mobile internet revenue almost doubling. However, prepaid revenue declined by 7%.

Of the THB9 billion True Corp has earmarked for network expansion in 2011, THB5 billion was being used for rolling out 1,200 2G base stations and THB4 billion for the roll-out of HSPA base stations.

Table 32 – True Move: proportion of revenue from non-voice – 2008 - 2011

5.2.3.5.4 3G strategy
In the same frame of mind as its rivals, True Move has committed to a rollout of 3G services, but was keen to have the regulatory and licensing issues sorted out first before heavily dedicating resources.
Apart from the question of when the NTC would finally issue 3G licences, True Move also needed to work around the conditions of its concession with CAT and how they might affect the company’s 3G business structure.

CAT Telecom gave its approval to True Move (and DTAC) in 2008 to begin developing 3G mobile services in the 800MHz frequency band. In exchange for the approval of WCDMA/HSPA services in the 800MHz band, CAT was demanding that both mobile operators co-brand their service and revert to ‘mainly’ using CAT’s international voice gateway instead of their own facilities.

The NTC rejected CAT Telecom’s initial request to be allowed to import 3.5G HSPA equipment to upgrade existing 2.5G base stations. The NTC said CAT was seeking permission for True Move to install HSPA equipment at 650 base stations. The regulator said it needed more information from CAT on the reallocation of frequencies involved. The NTC also wanted to know whether CAT had attached any conditions that might affect the NTC’s endorsement of the request.

Later in 2008 True announced that it had initially allocated THB5 billion (US$150 million) to roll out a 3G mobile network using the 850MHz spectrum after CAT Telecom had agreed to allocate it 5MHz of bandwidth in that frequency band. True Move was planning to deploy HSPA technology to roll out a network with capacity for 1.5 million subscribers. It said it expected that commercial 3G services would be launched by the end of 2008. True Move subsequently announced plans to roll out at least 600 3G base stations making use of the 800MHz-850MHz spectrum, at a cost of over THB1 billion.

Under a contract with CAT Telecom, True committed to a total investment of THB13 billion to build 4,500 3G base stations over a three year period with 3,000 sites using CDMA technology and 1,500 sites using HSPA technology. TrueMove said it would focus on providing 2G services and conduct HSPA mobile broadband trials on 600 base stations until its concession expires in 2013. The company plans to then shift all of its customers to subsidiary Real Move, which has a 14-year contract with CAT.

As with the rest of the telecom industry in Thailand, True continued to wait on the government to announce its decision on 3G licensing.

5.2.3.5.5 PCT network
During 2000, TelecomAsia (later to become True Corp) successfully launched its PCT service in Bangkok. Based on Japan’s Personal Handy Service (PHS) standard, the network became the second largest installed base of subscribers outside Japan. The company had over 350,000 subscribers on its PCT network in 2003. True Corp said in 2004 that the monthly ARPU of the PCT service was running at THB250-300.

During 2006 the PCT service started to decline. From a high point of 440,000 subscribers, it had fallen to around 290,000 by 2007. The company responded by cutting prices. By that stage True Corp was also working on bundling its PCT service with the GSM service of its subsidiary True Move and planned to introduce a dual-mode PCT/GSM handset. The company was further considering renovating its PCT network infrastructure to provide WiFi and WiMAX services in metropolitan areas.

In early 2008 the PCT service was bundled with True Move’s mobile service. The bundling required the customer to acquire a dual-mode handset that worked on both PCT and GSM mobile systems.
Almost all PCT customers, 40% of whom were pre-teens, were based in Bangkok.

True announced in 2008 that it was aiming to maintain its PCT subscriber base at 400,000 with a monthly ARPU of THB210 (US$6.5) giving a total revenue of THB800 million, up from THB700 million in 2007. The company also aimed to upgrade its PCT network to provide WiFi and WiMAX services in 2009/10, once the NTC had issued the relevant licences. By late 2010 these licences had not been issued.

By the end of 2010 the number of PCT subscribers had dropped to just under 90,000; ARPU was running at THB160.

Table 33 – True’s PCT subscribers – 2004 - 2010

5.2.3.6 True Online

5.2.3.6.1 Overview
True has become the leading ISP in Thailand. It has especially proved to be a market leader in the provision of broadband internet access and can probably take a large slice of the credit for the rapid growth in broadband services in Thailand, particularly over the 2007-2009 period.

Originally operating as Asia Infonet and marketing under the name Asianet, the ISP was a joint venture between Telecom Holding Co Ltd and CAT. Telecom Holding was a subsidiary of the then TelecomAsia. As part of its corporate rebranding, Asia Infonet became True Internet and, after consolidating the management of all its internet-related businesses, it became True Online in 2005.

The ability of True to offer internet services was greatly improved in 2006 when Sky Office, a subsidiary of True Corp, secured a licence to offer international gateway services. Sky Office was also commissioned to use a submarine cable and to lease circuits to other service providers.

True noted in 2008 that the number of dial-up internet subscribers in the wider market had been declining steadily as broadband became cheaper and more widely available. Dial-up subscribers in the market totalled about 800,000, down 20% on 2007 figures. True reported that it had 560,000 dial-up subscribers at the time. Despite a disadvantage in speed, the company believed that dial-up potential still remained, thanks to its inexpensive access costs and wide availability of telephone lines in households. This pattern of contraction in the narrowband internet market was expected to continue; however, it was also noted that the growth of broadband access network development was limited, given constraints on service areas and high access costs.

Still maintaining its position as the country’s largest ISP in terms of subscribers, True had an estimated total fixed internet subscriber base of around 1.5 million, including broadband subscribers, coming into 2011.

5.2.3.6.2 Statistics

Table 34 – True’s fixed internet subscribers – 2003 - 2010

Table 35 – True’s broadband subscribers – 2001 - 2002; 2004 - 2012

5.2.3.6.3 Broadband services
True has continued to be a significant player in the Thai broadband internet market, with roughly a 40% share of the national broadband market. More than half of True Online’s broadband subscribers were located in the Bangkok area, with the operator claiming its broadband network covered more than 90% of Bangkok.

Having been one of the early movers into broadband in Thailand, Telecom Asia launched a broadband internet service via DSL in 2000. It also had a cable modem service on offer. By 2003 the dominance of DSL had become evident, both for Telecom Asia and across the Thai market in general.

Telecom Asia began working with a group of companies in 2003 to expand its delivery of broadband internet services. The joint venture partners comprised True Internet Data Centre (True IDC), and Telecom Asia’s ISP, Asianet, together with DACOM and its subsidiary, Korea Internet Data Centre (KIDC). KIDC was the largest internet data centre operator in Asia at the time. Asianet held a 70% share in the joint venture.

Coming into 2005 True was preparing to face expected competition from Shin Corp, which had said it would start marketing its broadband service more aggressively. In order to maintain its market share at around the 90% level, True said it was looking at a number of strategies including launching a prepaid high-speed service. It also planned to expand its broadband internet offering to the provinces where it had only 2,000 subscribers (or just 1% of its total broadband subscriber base) in major provincial cities.
By 2010 the AIS broadband internet subsidiary, Advanced Datanetwork Communication Ltd (ADC) had not started to provide any serious challenge to True’s strong market position.

True reported in 2006 that most of its 400,000 fixed-line broadband internet users and 20,000 WiFi customers at that time were white-collar employees and university students.

True Online launched a revised broadband internet plan in 2009 with speeds of up to 12Mb/s.

5.2.3.6.4 Broadband developments
True selected Alcatel-Lucent’s IP/MPLS solution in February 2010 to support a converged network transformation, covering Bangkok’s metropolitan area, supporting both 3G IP mobile services provided by mobile unit True Move as well as fixed broadband services from True Online.

In December 2010 True Corp reported that it had successfully tested 100Gb/s Ethernet (100GE) traffic over its converged IP/MPLS network.

A fibre-optic/Metro Ethernet service offering bandwidths of up to 10Gb/s for corporate customers was introduced by True in March 2011, with the operator expanding its fibre-optic broadband network into more corporate buildings in Bangkok. The company claimed to be Thailand’s second largest provider of fibre/Ethernet/LAN services behind TOT. In the meantime, True launched a high-speed internet package for residential users, with a maximum speed of 100Mb/s. It also announced an investment of over THB5 billion (US$165 million) in its broadband business for 2011.

5.2.3.6.4.1 WiMAX
True Online joined with South Korea’s Posdata Flyvo in 2008 to test WiMAX wireless broadband access. True had received approval from the NTC earlier in the year for tests in central Bangkok using the 2.3GHz and 2.5GHz frequencies. Further testing beyond Bangkok was planned. The operator was moving forward in a fashion that anticipated receiving early approval for a full WiMAX licence, based on advice from the NTC. True saw mobile WiMAX as potentially better suited than mobile networks for use in outside offices and in remote provinces or where large-scale data transmission was needed.

Alcatel-Lucent, working in conjunction with True, was trialing wireless broadband services in Thailand in 2008 using 802.16e mobile WiMAX technology in the 2.5GHz frequency band. The testing included WiMAX CPEs and wireless cards for laptop computers aimed at delivering mobile broadband internet access. The trial was conducted on the outskirts of Bangkok. True hoped to further drive the concept of convergence with the addition of WiMAX broadband to its portfolio of services.

5.2.3.6.5 Pricing strategies
A significant element in True Online’s effort to maintain a strong market position has been the company’s approach to pricing and bundling its services. It progressively introduced attractive packages, especially addressing the low-price end of the market. However the company was not impressed when in 2009 the MICT called on broadband providers to halve their prices to boost the uptake of broadband. True said it could not afford to cut its prices at that stage. It added that halving broadband prices would not help bring broadband internet to rural areas.

5.2.4 Telephone Organization of Thailand Corp (TOT)

5.2.4.1 Overview
TOT was established in 1954 as the exclusive provider of the country’s domestic fixed-line telephone network. Apart from operating the national domestic telephone network, it provided international connectivity to neighbouring countries. It also had control of the 900MHz and 1900MHz frequency range for mobile phones and has been offering many value-added services such as data communications.

TOT has been very much a part of Thailand’s highly regulated telecom industry which has been run via a complicated concession system, under which companies built and paid for their own networks and then transferred their ownership to one or other of the state-owned agencies, TOT or CAT, in return for a share of the operating profits. TOT has had a monopoly on all domestic lines. The concession business model saw TOT steadily expand into a large number of joint ventures with the private sector.
As part of an ongoing role to expand its national telecommunications system and provide a variety of technology-based services, TOT was working with a large number of private companies by 2010. By that stage there were 32 businesses involving TOT that were structured in a number of ways: BTO, joint investment, joint operation, licences to operate, and lease of equipment.

Private companies were jointly active with TOT in the following service areas:
 Fixed-line (2);
 Mobile service (1);
 Network transmission (2);
 Data communications (3);
 Network (3);
 Audiotex (8);
 Public phone (9);
 Other services (4).

TOT continued to see a steady decline in revenue as part of a longer-term trend resulting from regulatory changes and the gradual restructuring of the telecom sector in Thailand. According to the company, the fall in revenues over the 2008/09 period was compounded by the global economic downturn. Falling concession revenues and revised interconnection charges continued to impact on the business into 2011. TOT was the first operator in Thailand to offer VoIP services, launching this service back in 2000.

As the dominant provider of public phones in Thailand, TOT had about 250,000 payphones of the 300,000 across the country by 2009, with more than 30,000 of TOT’s phones card-operated. The number of TOT payphones was in steady decline; the operator had in excess of 300,000 payphones in 2005.

The much-discussed plan to privatise TOT has been repeatedly delayed, with the most consistent reason for the delay being the government saying that it wanted to first complete the reform of the telecommunications industry.

5.2.4.2 Statistics

Table 36 – TOT’s fixed-line subscribers – 2005 - 2010

Table 37 – TOT’s total revenues – 2005 - 2010

Table 38 – TOT’s payphones – 2005 - 2010

5.2.4.3 Network expansion activity
TOT has followed up the BOT concession period with it own network expansion strategies, all directed at establishing a strong ongoing role for itself in the Thai telecom market. Most of these strategies have been focussed on its role as a fixed network operator, although there have also been some significant ventures into mobile services. These efforts by TOT have been plagued by problems with tendering processes and delays in contract implementation.

In November 2010 the MICT told TOT to put on hold major network investment plans until a full mapping of locations had been completed as part of the national broadband policy. The ministry said it intended to promote the practice of sharing network infrastructure and reducing redundant investment among private and state-owned companies.

Into 2011 TOT continued to be plagued by accusations of questionable administrative procedures and decisions. In February Thailand’s Office of the Auditor-General (OAG) requested clarification from TOT on its 3G expansion deals, in particular expressing concern that they may have violated the Trade Competition Act.

The OAG had asked TOT and the MICT to explain why TOT’s specifications for a nationwide 3G network expansion seemed to have been designed for only a certain bidder. It was suggested that the preliminary screening process prior to the bidding for the contract lacked transparency. Both Ericsson and ZTE complained that they were banned from entering the final stage of the auction, which was won by a consortium of Samart, fellow Thai group Loxley, Finland-based Nokia Siemens Networks and Huawei Technologies.

If the process was found to have violated the Trade Competition Act and if any irregularities that damaged the government were identified the OAG would forward the case to the National Anti-Corruption Commission for further scrutiny.

5.2.4.4 3G strategy
For details of TOT’s 3G strategy, see chapter 5.2.6.4, page 49.

5.2.4.5 Proposed privatisation
TOT was corporatised by the government in 2002 in what was meant to be a first step towards privatisation. Since then progress along the privatisation path has been very much stop-start in nature, with a string of excuses being found not to proceed. The process has also become mixed up with another strategy to merge TOT with its sister operator CAT, further complicating an already complex situation.

It was under Thaksin Shinawatra’s government that the privatisation plan started to gain some momentum with plans being prepared for an Initial Public Offering (IPO) on the Stock Exchange of Thailand (SET). In fact, TOT originally announced plans for the IPO back in 2001. However, this did not proceed because the government wanted to have the NTC, the new regulator, in place before proceeding. Then unfavourable market conditions became the reason for not proceeding, with the proposed IPO being delayed until 2003 and then into 2004. By early 2005 TOT was intending to complete an IPO and list on the SET by year-end; however, this date was duly postponed until early 2006.

By this stage the IPO appeared to have been postponed indefinitely, pending the issuing of new telecom regulations by the government. The proposed new regulations were expected to address the issue of concession agreements and would therefore include a new tax regime for telecom companies, in which private operators would pay taxes instead of sharing their revenues with TOT and CAT.
In an important decision, the Supreme Administrative Court accepted a petition filed by employees of TOT in 2006 to revoke the plan to privatise the company and change its status back to a state enterprise. As a result of the hearing, TOT was required to halt its privatisation process. Shortly after the decision, TOT’s board sacked the company’s president after he failed to pass 15 performance indicators out of a total of 31. The failures the board listed included poor financial results, the company’s failure to list on the SET and the delay in the launch of 3G technology.

The planned privatisation of TOT was finally cancelled after the Shinawatra government was overthrown by a coup in late 2006. Shortly after this, the military-backed interim government announced fresh plans to merge TOT with CAT.

The endless saga of the planned restructuring continued when TOT announced in 2007 that its IPO would be delayed until 2008. At the beginning of 2008, however, a newly elected government under Prime Minister Samak revived plans to merge TOT and CAT, and list the combined entity on the stock market. Just 12 months after its election, however, this government was dismissed. With a replacement government taking office under Abhisit Vejjajiva in 2009, the whole matter seemed to have been put aside for the time being.

5.2.4.6 TOT broadband
Despite being well positioned in terms of infrastructure, TOT has moved slowly into broadband internet services. The company’s estimated 500,000 broadband subscribers by end-2010 put it well behind broadband market leader True. Its subscriber base was estimated at around 20% of the total broadband market. It is noted that TOT does not report broadband subscribers; rather, it reports number of broadband ports in service. The majority of its subscribers were located outside of Bangkok. In a clear indication of its intention to focus on broadband, TOT reported in 2009 that it was investing THB3.4 billion over the coming 12 months to improve its broadband service.

TOT initially moved into broadband internet in 2004 with a low-cost broadband service offering speeds of 256Kb/s for THB500 (US$13) a month. The service was the cheapest broadband internet access available in the local market at the time. The entry point DSL-based service was priced at THB1,000 (US$26) a month plus a one-time cost of up to THB5,000 for a modem. Initially the service was being made available in Bangkok, as well as Phuket and Chiang Mai.

South Korea’s KT Corp won a contract to install its broadband technology in Thailand in a joint project with TOT. KT Corp launched its service in 2004. The service was called the Information and Communication Technology City Project. As a first step, KT installed 5,500 high-speed internet connections in Bangkok and Phuket.

TOT then teamed up with AIS in early 2005 to offer a data service branded ‘Buddy Broadband’; but problems with infrastructure and strong competition hampered take-up. AIS ended the partnership prematurely.

Choosing Ericsson to provide an Ethernet DSL Access solution in 2006, TOT continued to pursue a broadband strategy. The Ethernet solution was capable of broadband connections up to 24Mb/s.
Alcatel-Lucent was contracted in 2009 to supply an optical network for TOT’s IP broadband project. In the meantime, TOT launched a 12Mb/s plan as well as an 8Mb/s plan, which were priced at THB1,500 per month and THB1,000 per month, respectively.

Table 39 – TOT’s broadband services – 2007 - 2010

Table 40 – TOT’s broadband internet ports in service – 2009

Table 41 – TOT’s broadband subscribers – 2007 - 2010

5.2.5 Communications Authority of Thailand (CAT)

5.2.5.1 Overview
Established in 1977, CAT is a state-owned enterprise which began operating under the Ministry of Transport and Communications (MOTC). Its charter was ‘to operate and promote postal and telecom services and other related services for the benefit of the public and the state’.

CAT has been sharing authority over Thailand’s telecommunications sector with the other state agency, TOT. Its assigned charter was to oversee all international telephone services except for those with countries sharing a border with Thailand, this jurisdiction falling under TOT. As well as international services, CAT also controls the internet and the 1800MHz frequency for mobile telephony. It utilises the domestic network of TOT for the termination of its in-country traffic, paying a percentage of revenue to TOT as compensation.

CAT has been intimately involved in telecommunications through Thailand’s complicated concession system, under which companies build and pay for their own networks and then transfer their ownership to either CAT or TOT in return for a share of the operating profits.

In a key move that was set to impact on CAT’s business, the NTC issued a ruling in 2006 ending the CAT monopoly over local and international internet exchange gateway services. The NTC did not, however, decide to open up the international call-service market, pending a further study on the matter.
This followed CAT’s approach to AIS seeking an alliance to ensure its continued dominance in the overseas call business following market liberalisation.

CAT had been relying entirely on other telecom operators’ subscribers to make calls through its international network. Once the market was liberalised it would no longer have a captive market. AIS was providing service to a huge mobile subscriber base, representing around 40% of the combined fixed-line and mobile-phone users in Thailand. An international call joint venture with AIS would obviously give CAT a strong customer base.

In a story closely connected to TOT’s, CAT has also been the subject of an ongoing privatisation plan.
The plan experienced many postponements, with again the main reason given by the government being that it wanted to first complete the reform of the telecommunications industry. See chapter 5.2.5.3, page 43 for further information on the privatisation of CAT.

5.2.5.2 Network and business expansion
CAT Telecom’s business strategy has been plagued by uncertainty, with this inevitably flowing into its network investment plans. Its challenge has been to find a new flagship business to offset dwindling revenues from its core international call business. The search for a new flagship business saw the company flirt with plans to revive its national CDMA-based mobile project, considering investing THB12 billion (US$300 million) to build up the network and market the service.

As CAT continued to look for opportunities to restructure its business, early in 2009 the board approved the expenditure of THB6 billion (US$198 million) on an optical fibre cable project. CAT said at the time it was planning to make fibre optic services its flagship business into the future. The company said it was intending to invest more than THB12 billion on three communications networks over three years to develop broadband internet, mobile and submarine cable networks.

Then later in 2009 CAT Telecom indicated it was looking for a partner to help it bid for a 3G licence and for the network rollout thereafter. The company said that the partner could be either a local or a foreign operator. It had previously indicated that it was seeking a foreign strategic partner to operate and deliver the network’s planned 3G service. It was also moving to take over Hutchison’s CDMA network in the central provinces and integrate it into a single national CDMA network.

CAT’s plan to buy Hutchison’s Thai assets was put on hold in October 2010 as Hutchison rejected CAT’s offering price of THB4 billion while standing by its intention to sell at between THB7.2 billion and THB7.5 billion. Instead True Move acquired the Hutchison assets and CAT missed the opportunity.

In November 2010 the MICT told CAT to put on hold major network investment plans until a full mapping of locations had been completed as part of the national broadband policy. The ministry said it intended to promote the practice of sharing network infrastructure and reducing redundant investment among private and state-owned companies.

5.2.5.3 Proposed privatisation
As with TOT, CAT has been the subject of serious plans for privatisation and also as with TOT CAT has suffered delay upon delay in this process. The operator had been scheduled to sell a minority of its shares in an IPO as far back as 2002. However, again, the government said it wanted to at least have the NTC up and running first. The government’s plan was to split the state agency into two companies,

CAT Telecom and Thailand Post, with the former initially having THB2 billion in registered capital and the latter THB750 million.

In 2003 the CAT privatisation plan was approved by the State Corporatisation Committee. Under the plan tabled at the time CAT was to become CAT Telecom and its postal unit would become Thai Postal Co. It was also announced that CAT Telecom was to list on the SET by the last quarter of 2003 or the first quarter of 2004. CAT Telecom would focus on providing Code Division Multiple Access (CDMA)-based mobile phone services after privatisation.

CAT Telecom announced in 2004 that it was to list on the SET by the following year, with the extension of its mobile network as a particular motivation for the timing of the listing. However, with the concession conversion reforms still outstanding, CAT’s planned IPO was delayed once again, this time until 2006.

Following the removal of the Shinawatra government in late 2006, the new ICT minister stated that he no longer believed privatisation of CAT was necessary, adding that the focus should be on merging CAT and TOT. To confuse matters even further CAT announced in early 2007 that its IPO would be delayed until 2008. However, at the start of 2008, a newly elected government under Prime Minister Samak said it was keen to merge TOT and CAT. It would then list 30% of the combined entity on the stock market. Samak government was dismissed within 12 months, however. Since Abhisit Vejjajiva’s government took office in 2009, the restructuring of CAT appears to have been put on hold indefinitely.

5.2.5.4 Proposed CAT/TOT merger
There has been much speculation and discussion over the years about a possible merger between Thailand’s two government-owned telcos, CAT and TOT The MICT announced in 2003 that it was taking a look at a merger plan between the two operators, adding that a CAT/TOT merger could help create a stronger, more competitive organisation as well as generate major cost savings.
In 2004 the government restated its intention to merge TOT and CAT, saying that it would happen that year; but the Finance Ministry, the sole shareholder in TOT and CAT, said the listings would not happen until 2005.

In the meantime, consideration of a merger between the two operators was being made more complicated by the parallel plans to privatise the companies. The government having approved new regulations governing the privatisation of state enterprises in 2004, a holding company was expected to be set up to oversight the two entities, with the Finance Ministry remaining the major shareholder in the holding company. Revenue-sharing streams for the two would stay in place, as would concession agreements. The listing of the two agencies still depended on:
 a decision on whether to merge TOT and CAT before listing;
 the ending of concession contracts between the two agencies and private telecom operators;
 the development of a competitive post-privatisation business plan for the two agencies.

In the absence of any firm action by the government the saga continued into 2006 and by mid-year the Thai media was publicising plans for the merger.

The situation became more confused after the military coup in 2006. The newly-appointed Minister of ICT stated that he wanted to fully restore the state-enterprise status of TOT and CAT. However, he also stated he was unlikely to succeed at achieving this goal.

In 2008 Thailand’s then newly elected government revived the plan to merge the two state telecom enterprises and list the combined entity on the stock market. TOT executives opposed the plan, however, arguing that TOT and CAT should increase their market value before listing because the companies ‘had been weakened and would attract little interest’.

The plan to merge CAT and TOT continued to languish in 2009 and well into 2010.

In August 2010 a government panel looking into the future of TOT and CAT Telecom concluded that they should split their business into two and become network operators. The new plan had the advantage that it contained a definite structure.

Under the proposal, the state-owned operators would be separated into Network Companies (NetCo) and Operating Companies (OpCo). The OpCos would operate the existing 2G and 3G networks and other services, while the NetCos would operate mobile towers and fibre-optic networks, as well as submarine cable networks. The companies would lease their networks to mobile operators and small retail telecommunications service providers, which would help reduce redundant network investment.
The plan would eventually see the companies become network companies as TOT’s OpCo would be merged with its NetCo unit to become TOT NetCo and CAT Telecom would become CAT NetCo. The plan needed to be approved by cabinet before it could be implemented.

5.2.5.5 CAT Telecom mobile

5.2.5.5.1 Overview
At the start of 2007 CAT announced that it was preparing to relaunch its wholly-owned CDMA-based mobile service. Subscribers to CAT’s CDMA services numbered only around 10,000 customers at the end of 2006. In the meantime Huawei Technology completed a THB7.2 billion (US$228 million) expansion of the CDMA system in 2007, thereby allowing CAT to offer nationwide coverage.

Following a deal with HTIL, CAT Telecom announced in 2007 that its CDMA network would be jointly marketed with Hutchison’s CDMA network, under the slogan ‘Nationwide CDMA’. Both networks were to have the same service rates and promotional packages. CAT executives ruled out a further incorporation of the two ventures, stating that each company would control its own network, work force and the collection of service fees. By that time, CAT claimed 15,000 subscribers, but other sources had indicated a much lower figure.

However, later in 2008, following CAT’s agreement to sell all of its stake in Thai Mobile to TOT, the company decided it would spend THB800 million (US$25 million) to expand the coverage and data transmission capacity of its CDMA2000 1x network in 51 provinces. The expansion was to focus on northern and rural areas not covered by fixed-line broadband services. CAT had not yet reached a final agreement with HTIL, its joint venture partner in Hutchison CAT, on a planned nationwide integration of their respective 1x EV-DO networks. In the meantime, CAT CDMA was consistently falling short of its subscriber targets.

Note: Apart from its own CDMA network, CAT had been involved in the Hutch CDMA service in 25 central provinces including Bangkok in a joint venture with Hutchison. (See chapter 5.2.5.6, page 46).

5.2.5.5.2 Statistics

Table 42 – CAT Telecom’s subscriber growth – 2006 - 2009

5.2.5.5.3 3G strategy
The delays in the issuing of 3G licences in Thailand presented CAT with an opportunity to arrange joint ventures with the private operators to establish advanced networks using CAT’s frequency spectrum. CAT started working with True on one such plan. However, things did not go smoothly. In May 2010, CAT Telecom told True Move to stop offering its trial services, on the grounds that it had breached its BTO concession agreement with CAT. True had been sent formal notification to stop 
marketing its WiFi-plus-3G packages which included free trial usage of HSPA services using CATs frequency spectrum. CAT said it had detected violations of the trial service conditions. For example, True was alleged to have installed more HSPA equipment than permitted. All equipment used for the trial service must be transferred to CAT under the BTO agreement. CAT gave True Move permission to install up to 543 sites in Bangkok and surrounding provinces, 22 in Chiang Mai, 42 in Chon Buri, 35 in Phuket and 35 in Maha Sarakham. But True Move had been seeking approval to install another 750 sites.

With the dispute still simmering, in June 2010 CAT Telecom again warned TrueMove to stop its trial of 3G services. True said it believed the installation of the additional base stations was within the scope of the agreement and the dispute was a misunderstanding. True Move was starting its own investigation into whether it violated the agreement.

CAT Telecom said in November 2010 that it had agreed in principle to plans by DTAC and True Move other mobile networks to use their existing networks to offer 3G services. The two private operators planned to offer 3G services in the 850MHz band following the collapse of the country’s planned 3G licence auction in September 2010. Both private operators would be required to cooperate with the state-owned operator and pay a commission to it for access to its 2G network. However, DTAC called the plan unfair as True had already begun a test run and had installed several hundred base stations, while DTAC had only received approval for around 30 base stations.

Meanwhile, CAT was ordered by the MICT to suspend a planned THB3.8 billion investment in its CDMA network.

5.2.5.6 Hutchison CAT

5.2.5.6.1 Overview
Hutchison Telecom and CAT Telecom entered into a joint venture in 2000 to establish Hutchison CAT Wireless MultiMedia Ltd, otherwise known as Hutchison CAT, as a vehicle to provide exclusive marketing services for CAT Telecom’s CDMA mobile service. Hutchison CAT proceeded to install its network in the Bangkok metropolitan area and in 25 provinces located in the central, east coast and west coast regions of Thailand. The Hutchison CAT mobile service, launched in 2003 under the Hutch brand, offered a high speed voice and data wireless service to its customers based on the CDMA2000 1x platform. (Note: CAT Telecom was also operating its own CDMA2000 1xEV-DO network in Thailand’s 51 other provinces.

Hutchison CAT’s subscriber base grew to just over one million by March 2009, a significantly high 38% of the subscribers being postpaid.

5.2.5.6.2 Statistics

Table 43 – Hutchison CAT: subscribers and market share – 2003; 2007 - 2010

5.2.5.6.3 Restructuring
The partnership between Hutchison and CAT had started to develop some concerning cracks by 2007 and steps were taken to negotiate a revised structure for the joint venture. The big issues centred on: 
 the existence side by side of the two CDMA networks – the Hutchison CAT joint venture network and CAT Telecom’s separate CDMA’s network;
 CAT Telecom’s strong desire to ultimately expand its network and capability nationwide.

CAT Telecom indicated in 2008 that it was set to spend THB800 million (US$25 million) to expand its CDMA network in 51 provinces. The ‘CAT CDMA’ branded provincial service, which offered 1x EVDO high-speed wireless data coverage in selected areas, had only 40,000 voice and data subscribers at the time. CAT was still looking to negotiate a final agreement with Hutchison Telecom International Ltd (HTIL), its joint venture partner in Hutchison CAT, on a planned nationwide integration of their respective CDMA 1x EV-DO networks. CAT announced that it was negotiating to buy out HTIL to complete its nationwide CDMA footprint.

In April 2010 the government approved CAT’s plan to buy Hutchison-CAT’s assets. In the meantime CAT Telecom/Hutch had just under 1.1 million subscribers by March 2010 giving it a market share of just 1.6%.

Hutchison CAT signed a long-delayed network interconnection agreement with AIS and DTAC in August 2010. The move complied with regulations issued by the NTC imposing an interconnect rate of THB0.50 (US$0.016) per minute on Hutch. However, Hutch was yet to agree to interconnect terms with True Move, which refused to accept the THB0.50 rate as it said it was too low and did not reflect actual costs.

5.2.5.6.4 Acquisition plans
By September 2010 the MICT was urging CAT Telecom to acquire Hutchison’s CDMA network for around THB4.0 billion, thereby renegotiating its original bid. CAT had earlier said it would pay THB7.2 billion for the assets and business but the ministry said the price was too high.
CAT’s efforts to acquire the Hutchison assets ended in failure in late 2010 when True Move closed a deal with HTIL for the CDMA business in Thailand.

5.2.5.7 CAT broadband
CAT’s presence in Thailand’s internet market has long been a complex and controversial one as it continued to hold minority stakes in virtually all the country’s licensed ISPs. This situation has not prevented the government-owned operator from itself becoming an ISP and getting involved in the rollout of broadband services.

In 2003 CAT Telecom launched a relatively cheap broadband internet service. CAT’s entry into the broadband market saw capital expenditure of THB10 billion to set up the service. CAT’s move into the market was helped by the MICT’s broadband support strategy. The ministry was providing broadband modems for 80% less than the market price, with the price of  modems dropping to around THB1,000, down from about THB5,000.

As with TOT, by 2009 CAT was being forced to address its future role in the telecom market. It needed to establish significant new roles if it was going to survive as a business entity. Part of its strategy to counter the loss of International Direct Dial (IDD) revenue saw CAT roll out a broadband internet access service under the Hi-Net brand. The operator was aiming to increase the proportion of its data revenue to around 40% in the short term; this compared with 25% during 2006.

CAT Telecom was continuing its focus on mobile services and optical fibre broadband services as its flagship operations. In 2009 a plan to invest THB6 billion to roll out an optical fibre network was approved. CAT said it would invest more than THB12 billion on three separate communications networks as part of the government’s financial stimulus program. The company would invest the funds over three years to develop broadband internet, mobile services and a submarine cable network.

5.2.6 Thai Mobile, TOT and CAT

5.2.6.1 TOT/CAT joint venture
(TOT launched the ACT mobile project in 1999 as a low-cost alternative mobile service for the general public. TOT’s proposed US$300 million investment was seen as an attempt to enter the lucrative mobile market before the industry was deregulated.

The newly established mobile venture, with TOT as its major shareholder (55%), entered into a MoU with CAT and Aeronautical Radio of Thailand (ART) to set up a new mobile network. Both CAT and ART invested money to obtain a 45% and 10% respective shareholding in the venture which proposed to build a network utilising the 1900MHz frequency band.

The National Frequency Management Board granted free of charge 3G spectrum (2000MHz) jointly to TOT and CAT in 2000. However ACT Mobile was still giving priority to developing the 1900MHz service, with the 3G services planned for launch two years after the first service launch.

Both the issuing of the 3G spectrum and the issuing of the original 1900MHz spectrum to ACT Mobile had come under fire from all sides as under the new telecom policy of the country and under legislation passed in 2000, no new spectrum or licences were to be issued before the introduction of the NTC. In the meantime, TOT was trying to keep the 1900MHz mobile project going, promoting a new funding plan to the then Ministry of Transport and Communications (MOTC).

However, the Council of State promptly announced that ACT Mobile had in fact been established in contravention of the law and thus had no licence to provide mobile services. The ruling still did not discourage TOT as it began planning the launch of a new mobile operator to take over from the defunct ACT Mobile. The move by TOT appeared to be an attempt to circumvent the legislation by using a different frequency band from the original ACT Mobile project. TOT prepared to launch a GSM 1900 
service it was referring to as Thai Mobile.

The Samart Corp and its partner, International Engineering Plc (IEC), announced in 2002 that they were joining with a local mobile phone distributor to operate marketing and billing services for TOT’s Thai Mobile service. TOT planned to roam its network with AIS to expand coverage.
TOT finally launched its 1900MHz Thai Mobile service in 2002.

5.2.6.2 Statistics

Table 44 – Thai Mobile Telecom’s subscriber growth – 2002 - 2009

5.2.6.3 Restructuring of Thai Mobile joint Venture
In 2004 TOT said that it had been in talks with CAT Telecom over plans to buy more shares in Thai Mobile, to raise its holding to 80%. Finally TOT agreed in 2005 to pay CAT an amount of THB4 billion (US$96 million) for its 42% stake in the operator, taking full ownership of its 1900MHz concession and all assets of the company. TOT had already merged the remains of its ACT operation with Thai Mobile.

It was reported in 2006 that the TOT board was considering shutting down Thai Mobile. It remained Thailand’s smallest digital mobile service and had never been profitable, with accumulated losses of THB3 billion (US$73 million) since 2002. And of course, TOT had suffered a major setback when the NTC recalled the 3G spectrum held by Thai Mobile. The launch of 3G services had long been a key element in TOT’s customer acquisition strategy for Thai Mobile.

After having agreed to sell its 42% stake to TOT in 2005, CAT reneged on the deal in 2007. It had been suggested that CAT wanted to delay Thai Mobile from launching a 3G service, which would compete with CAT mobile’s CDMA service.

CAT Telecom rejected a fresh offer by TOT in 2007 to take over its 42% stake in Thai Mobile for THB2.4 billion (US$76 million). The TOT board had been informed by CAT that it still wanted to participate in the running of Thai Mobile, noting that it possessed the only assigned UMTS 3G frequencies in the country at that time.

CAT and TOT signed a long-awaited agreement in 2008 under which TOT was to purchase its sister company’s 42% stake in their joint venture Thai Mobile for THB2.4 billion (US$72 million), plus assume over THB6 billion in debt. Under the MoU they signed, TOT was to raise its stake in the failed mobile operator to 100% and pay THB480 million a year to CAT for five years. The settlement between TOT and CAT was facilitated by the MICT, the ministry having responsibility for overseeing both agencies.

5.2.6.4 Proposed 3G network
Having assumed 100% ownership of Thai Mobile in mid-2008, TOT moved quickly to cement its
network expansion and business development plans. It announced that it would use Thai Mobile’s
1900MHz wireless spectrum to launch 3G services via a new subsidiary under the TOT Mobile brand,
saying that it intended to invest THB30 billion in rolling out a Next Generation Network (NGN) ready
for commercial use within one year. Initially, the plan would see TOT investing THB2-3 billion to
upgrade Thai Mobile’s existing 500 GSM base stations in Bangkok and provinces to a 3G platform and
then transferring existing subscribers to the new system. TOT aimed to offer wholesale 3G network
services to private sector mobile operators AIS, DTAC and True, as well as fixed-line operator TT&T.

TOT estimated that TOT Mobile would account for no more than 20% of 3G traffic over the proposed
network with its direct service, while the bulk of the business would be generated by the private 3G
operators renting its infrastructure.

The government gave in-principle approval to TOT’s 3G business plan in 2008. Through its subsidiary
ACT Mobile – the parent of failed operator Thai Mobile – TOT planned to invest THB29 billion
(US$870 million) in a 3G WCDMA network roll-out in two stages over the 2009-2011 period. The
operator confirmed its intention to rebrand Thai Mobile as TOT Mobile. TOT had a licence to operate
its service in the 1900MHz frequency range, which was capable of supporting 3G. This right followed
from the share transfer agreement reached with CAT. The TOT plan still required endorsement from
the National Economic and Social Development Board and the Public Debt Management Office.

In a blow to TOT’s plans, Thailand’s Economic Development Subcommittee recommended in 2008
that the government rescind its plan to build a national 3G network using TOT as the vehicle. The
committee doubted the project’s commercial viability, as well as TOT’s ability to market the network.
Operators True Move and DTAC had both told the committee it would probably be more cost-effective
for them to build their own 3G networks. Cabinet had already approved the project.

TOT started looking for a back up plan for its 3G network from outside debt sources in case the
government refused to act as a loan guarantor. TOT had already been forced to modify its plans for 3G
deployment after the State Enterprise Policy Office (SEPO) had asked for more details. The SEPO
considered that TOT should implement the 3G project, both its feasibility study and commercial
operations, on its own. In the meantime, the office advised the Finance Ministry not to guarantee the
THB24 billion loans for the project.

In the meantime TOT approved an upgrade project for the company’s 500 base stations in Bangkok.
The upgrade project was slated to cost THB1.7 billion with the company saying it was part of its
investment strategy to offer 3G services. TOT confirmed in 2009 that it was on track to launch 3G
mobile services in Bangkok by year end.

Having launched its 3G network on a limited scale in Greater Bangkok in December 2009, TOT sought
government approval for its plan to roll out a nationwide network. In November 2010 the government
directed TOT to complete the rollout of 3G services by April 2011.

5.2.7 Thai Telephone &Telecommunications (TT&T)

5.2.7.1 Overview
TT&T was formed in 1992 to operate a 25-year concession granted by the TOT. The concession
involved the installation and maintenance of 1.5 million telephone lines in the provinces outside the
BMA. The company’s largest foreign investor was Japan’s NTT Group with a 12% stake. TT&T
needed additional investment to fund its expansion as well as access to foreign technology.

TT&T quickly signed up more than 1.3 million subscribers to its fixed-line network. However, the
company was soon complaining that it had been financially crippled by its 43% revenue sharing
agreement with TOT. By contrast, TelecomAsia with its Bangkok concession was paying only about
one third of this rate. The company has been trying ever since to negotiate with the government for a
change in the terms of its revenue-sharing arrangement with TOT.

The telecom law passed in 2001 limited foreign shareholding to 25% and therefore limited TT&T’s
choice of potential investors. The government’s subsequent decision to change the foreign shareholding
limit from 25% to 49% came as some relief to TT&T.

In an effort to reduce its dependence on fixed-line revenue and to improve its financial situation, TT&T
attempted to diversify and reshape its business.

5.2.7.2 Business development
In expanding its core traditional fixed line services in provincial areas, TT&T Subscriber Services, was
granted a facilities-based Type 1 internet licence in 2005. It had already been providing Maxnet DSL
broadband internet access services, while TT&T indirectly served additional DSL subscribers via other
units including Triple T Broadband. Another unit, Triple T Global Net was granted an internet Type 2
licence in late 2006, allowing it to launch International Internet Gateway (IIG) and National Internet
eXchange (NIX) services in 2007. The group also received a Type 3 (non-facilities based) telecom
licence late in 2007 under which Triple T Global Net launched an International Long-Distance (ILD)
call service in the same year. It had also been granted further Type 3 concessions for various additional
telecom services which it intended to use to expand its product range.

In a key move in 2005 TT&T established three new operating subsidiaries to supply services in the
newly liberalised Thai fixed-line market:
 Triple T Broadband;
 Triple T Telecom;
 Triple T Global.

These units were set up to operate broadband internet, fixed line telephony services and international
gateway concessions. Triple T Broadband (see chapter 5.2.7.5, page 52) was planning to roll out
services nationwide. The operator had earmarked around THB3.5 billion (US$85 million) to build a
broadband and data network.

5.2.7.3 Company and financial restructuring
TT&T indicated in 2005 that it was seeking a foreign partner with whom it could diversify into 3G
mobile phone services. At the same time, despite its substantial debt and mounting losses, TT&T
moved to invest over THB3 billion (US$73 million) in expanding ADSL and broadband internet
services. By the end of 2005, TT&T had THB23 billion (US$558 million) in debt.
As part of TT&T’s debt restructuring program, Thai telco Jasmine International took equity in the
struggling operator. Japan’s NTT West Corp announced in 2005 that it was selling its 6.19% stake in
TT&T.

At the end of 2007 TT&T started restructuring the company, including plans for IPOs for three of its
subsidiaries. TT&T planned to list Triple T Broadband, TT&T Subscriber Services and Triple T Global
Net on the SET and the MAI (a separate exchange from the SET where smaller fast growing companies
were listed), with the aim of raising capital of at least THB2 billion (US$65 million).

The company froze all investment in core provincial fixed line operations to focus on services that
incurred lower licence costs. This was a reaction to the continuing high concession fees it was required
to pay TOT. Subsidiaries under the TT&T umbrella offering fixed and wireless broadband, VoIP,
IPTV, International Internet Gateway (IIG), IDD and data communications services were paying only
7% of their annual revenues (a 3% licensing fee and a 4% universal service obligation fee), under
licences issued by the NTC. The revised strategy was aimed at increasing the group’s revenue by 20%
to THB8.7 billion in 2008 and helping the parent company earn a net profit in 2009. The company had
been booking losses since 2003.

However, TT&T was forced to suspend its THB50 billion (US$1.5 billion) investment plan in 2008,
claiming it had been derailed by the global financial crisis. The company said it was postponing
indefinitely 3G and other new business areas that required high investments, because of the difficulty in
obtaining funds due to the crisis. TT&T said it would still be applying for a 3G licence. The company
also said it would continue to seek prospective foreign partners. TT&T confirmed that it was moving
forward with its initial THB800 million investment plan in fixed-line network maintenance.

Late in 2008 Jasmine moved to increase its shareholding in TT&T from 30% to 40% as part of TT&T’s
ongoing debt restructuring and corporate rehabilitation program.

By 2009 TT&T was in serious financial trouble. Despite having overcome numerous financial setbacks
over the years, it found itself struggling under huge debt with no relief in sight. Efforts to renegotiate its
concessionary structure had come to nothing.

5.2.7.4 Financial rehabilitation plan
TT&T had been struggling with financial problems for almost all of its corporate history. As already
noted in chapter 5.2.7.3, by 2009 TT&T was in serious financial trouble. Despite having overcome
numerous financial setbacks over the years, it found itself struggling under huge debt with no relief in
sight.

In 2008 the company had received court approval to begin a business rehabilitation plan in a bid to
avoid bankruptcy. The Central Bankruptcy Court approved the proposal and gave TT&T 45 days to
prepare a plan and submit it to creditors for a vote. TT&T had already reduced debt over the previous
eight years from THB44 billion. But it was still THB21 billion (US$600 million) in the red, of which
55% was owed to foreign creditors.

TT&T had already fallen behind on repayments for 2008. Following this move the company abandoned
its THB50 billion (US$1.4 billion) 3G investment plan, saying that it no longer intended to expand into
3G mobile services. It also said its planned ‘aggressive’ business expansion would be put on hold until
2009, although TT&T’s subsidiaries and associated companies, including Triple T Broadband, would
be free to expand according to initial business plans. Its parent company, Jasmine International,
dropped its 3G investment plan due to concerns over the profitability of the technology for the
provincial provider. Jasmine decided diversification was not the right move considering corporate and
economic circumstances and said that the company was not in a position to compete with AIS and
DTAC at the time.

5.2.7.5 Triple T Broadband/Jasmine
TT&T started offering high-speed internet access to individuals in 2004 as part of this strategy to boost
revenue. Broadband internet access was being provided by TT&T to both its domestic and corporate
customers. The company’s move into broadband was also in line with the government’s policy to
increase broadband subscribers. The company noted that its broadband revenue was rapidly increasing
and accounted for up to 5% of its total revenue in the 2004 fiscal year. The ARPU for broadband
services was running at about THB1,000 per month at the time. In the meantime, TT&T was looking to
cooperate with fellow private fixed-line operator True Corp in marketing their fixed-line and
broadband internet services.

After the liberalisation of the market in 2005, Triple T Broadband, Triple T Telecom and Triple T
Global were to operate broadband internet, fixed-line telephony services and international gateway
concessions respectively. As part of its plan for Triple T Broadband the telco earmarked around
THB3.5 billion (US$85 million) to build a nationwide broadband and data network by 2007.

Triple T Broadband received a Type 3 licence in 2006 enabling it to provide broadband internet and
fixed-line telephone services nationwide. As a condition of the licence, the company was required to
pay a licence fee of 3% of its annual revenue. It was also required to pay a universal service obligation
fee of 4% of its revenue, collected by the NTC to ensure that rural areas had reasonable access to the
telecom services equivalent to that enjoyed by the rest of the country. After being awarded the licence,
Triple T signed a contract with equipment suppliers to install broadband network infrastructure in
Bangkok. The contract was part of company’s planned nationwide NGN. At the same time, Jasmine
International increased its holding in the broadband business from 26.58% to 30%.

Triple T Global was subsequently granted a Type 2 licence by the NTC to operate an IIG service. The
company estimated it would spend less than THB100 million developing the gateway service. It was
also noted that Triple T Global might consider switching from a Type 2 licence to a Type 3 licence,
which would allow it to directly connect with overseas service providers instead of having to rely on
TOT or CAT as required by the Type 2 licence.

On the back of a growing broadband market presence, TT&T launched an IPTV service in 2007.
TT&T entered the second phase of its THB3.5 billion (US$108 million) broadband network expansion
in 2007. This was set to create capacity for an addition 600,000 subscribers. It was noted TT&T had
generally been falling well short of its announced broadband targets.

Table 45 – Triple T Broadband’s subscribers – 2004; 2007 - 2009

By 2007 TT&T had achieved a broadband subscriber market share of 16% putting it in third in
subscriber numbers behind True and TOT. Based on ITU figures for the total market this would have
meant TT&T had around 150,000 subscribers, substantially less than the operator was reporting at the
time.

TT&T launched a broadband internet package in 2008 that offered a minimum speed of 2Mb/s over
ADSL connections for THB590 (US$18) per month, in place of its previous 1Mb/s service charged at
the same price. The upgraded package was available in all provinces as well as some areas of Bangkok.
TT&T was in pursuit of True, the market leader having earlier launched a 2Mb/s package for a monthly
fee of THB890.

In the meantime, minority shareholder Jasmine had lifted its equity in Triple T Broadband to 91%,
leaving TT&T with only 9%. This meant that Triple T Broadband was developing independently of
TT&T.

The company’s pattern of declaring ambitious subscriber targets continued, with Jasmine International
reporting in 2009 that its broadband subsidiary Triple T Broadband would target more than one million
subscribers in 2010.

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6. TELECOMMUNICATIONS INFRASTRUCTURE

6.1 NATIONAL TELECOM NETWORK

6.1.1 Overview

The telecom industry in Thailand continued to be almost overwhelmed by pervasive regulatory
uncertainty in 2010, with a whole range of issues being affected as a consequence. Not least among this
was the serious impact the uncertainty and absence of decision making was having on investing in and
building of infrastructure in the telecom sector.

The regular postponement of the awarding of 3G licences was a case in point; put plainly, operators
were not prepared to start investing until the licences had been issued and the rules were known.

By late 2010 the government was moving to formally establish the National Broadcasting and
Telecommunications Commission (NBTC), the proposed replacement regulatory body for the NTC.
Although the NBTC was not expected to be properly in place until late 2011, this at least offered some
hope that regulatory uncertainty will be reduced once the new commission is in place. This in turn
should see telecom operators starting to look more positively again at investing in infrastructure.

Chart 3 – Fixed and mobile subscribers – 1999 - 2010

6.2 INTERNATIONAL INFRASTRUCTURE

For a considerable period of time the state-owned CAT had been operating with the sole right to
provide international telephony and data services for Thailand with the exception of connectivity to
neighbouring countries. International services to the neighbouring countries fell under the jurisdiction
of the TOT.

For its International Direct Dial (IDD) services, CAT maintains three international switching centres -
in Bangkok, Nonthaburi and Sri Racha. Connectivity has been provided utilising both satellite,
submarine and terrestrial cable networks.

Satellite communications have been provided using the services of:
 Intelsat;
 Inmarsat;
 Thaicom.

CAT’s submarine cable connectivity has been provided through:
 Thailand-Vietnam-Hong Kong (TVH) cable;
 SEA-ME-WE 3;
 CSC;
 APCN;
 FLAG.

Although the roles of CAT Telecom and TOT as international operators appeared to have been clearly
defined, there has been ongoing tension over the management of cross-border telephone traffic. In a
positive move, CAT agreed to cooperate with TOT on the launch of an international call service in
2004 by offering circuits as part of the deal. (The service used the access code 001.)

TOT had suggested the service to the MICT, which had called on the two state agencies to cooperate in
its provision. CAT Telecom said that the rates it planned to offer to TOT Corp would be cheaper than
those quoted by Malaysian operators. In other words, it was prepared to be competitive on rates. TOT
had earlier leased international circuits from five operators in Malaysia, a right it claimed under its
‘neighbour’ role.

In the meantime the impact of the major operators moving to international services based on Voice
over Internet Protocol (VoIP) was also occurring. CAT Telecom began offering an internet-based
service called eFone service that could be used on fixed-line and mobile phones. CAT reduced rates by
between 11% and 53% on its internet-based international calls in 2004. internet-based rates were
between 10% and 25% lower than IDD rates. Another service was CAT’s PhoneNET, a prepaid card
service for internet-based international calls.

The NTC issued an important ruling in early 2006 that saw the opening up the local and international
internet exchange gateway market. Licensed operators were to be allowed to build and operate their
own gateways, ending CAT’s monopoly on this part of the market. Prior to this announcement, Internet
Service Providers (ISPs) were complaining that their ability to expand customer bases was being
undermined by CAT’s monopoly.

Among other problems, sending their traffic through CAT’s single gateway was dramatically slowing
connections with overseas websites. Although the internet gateway market had been opened up as a
result of this move by NTC, CAT was to continue to play a central role in the international gateway
market and of course continued to play its traditional role in the IDD market.

6.2.1 Submarine cable networks

In addition to its extensive use of satellites for providing international connectivity, Thailand had also
been utilising a range of submarine and/or terrestrial cable networks. There are four landing points for
submarine cables in Thailand; they are located at Satun, Songhkhla, Petchaburi and Chonburi.

Exhibit 4 – Submarine cable networks − 2011

6.2.2 Submarine cable systems under construction

6.2.2.1 Thailand-US planned cable link
True Internet Gateway (TIG) announced plans in 2008 to invest THB1.4 billion (US$41 million) on a
proposed joint project to build a submarine cable link between Thailand and the US; such a link would
end the monopoly held by CAT Telecom in the submarine cable market. The company said at the time
that it was in preliminary talks with CAT and its sister telco TOT, mobile operators AIS and DTAC,
and Jasmine International over the joint venture proposal.

TIG became the only Thai gateway provider able to offer both terrestrial and submarine connectivity to
Thailand after it became the first private operator to be granted a licence for submarine cable landing
rights by the NTC in late 2009.

In the meantime, True said that cable-laying work on the planned Thai-US cable would take between
18 months and two years. The cable was designed to interconnect directly with a US cable network, at
the same time doubling Thailand’s international internet bandwidth capacity. The company claimed
that this would reduce wholesale gateway fees by around 30% and allowing faster end user speeds.
For more information on Thailand’s international internet gateway market, see chapter 7.4, page 64.
6.2.2.2 Asia Pacific Gateway (APG)

CAT Telecom joined a consortium comprising major telcos that was planning and developing another
cable system, known as the Asia-Pacific Gateway (APG), which was set to have a landing point in
Thailand. Plans for the project announced in mid-2009 indicated that the 8,000km cable was to link
eight countries in Asia. Apart from the Thailand, the countries involved were Malaysia, Singapore,
Vietnam, Hong Kong, the Philippines, Taiwan, Mainland China, Japan and Korea. Importantly, as well
as upgrading regional connectivity, it was also providing diversity to existing submarine cable systems
such as APCN2 and AAG. In the event of cable damage resulting from an accident or a natural disaster,
the APG was set to minimise the impact of service disruption in international links provided by these
cable systems.

6.2.2.3 Gulf of Thailand
In January 2011 the government approved a CAT Telecom proposal for investing THB2.7 billion
(US$90 million) in a fibre-optic cable project in the Gulf of Thailand. The network will link two
submarine fibre-optic stations in Songkhla and Chon Buri with DWDM-based infrastructure to support
transmission at speeds of over 160Gb/s. The project is aimed specifically at supporting the energy
sector, mainly supporting communications between offshore petroleum rigs and onshore factories. The
project is expected to be completed by 2013.

6.2.3 Submarine cable outages

Thailand’s heavy dependence on a limited number of major cable systems and the consequential
vulnerability was reinforced when a further series of outages again seriously affected internet traffic in
2009. Meanwhile there were a number of new regional cable systems being built along new undersea
routes that aimed to bypass earthquake prone areas and reduce the risk of outages caused by ‘natural
disasters.’
Earlier on, in 2006, Thailand experienced a major telecom traffic and data jam, following damage to
the Asian submarine cable network caused by a strong earthquake off Taiwan. The drama carried on
into 2007 with the situation taking around two weeks to return to normal, some difficulties continuing
even beyond that period. CAT reported that six out of nine submarine cable links to Thailand were
damaged by the earthquake.

6.2.4 Satellite networks

6.2.4.1 Overview
Thaicom (formerly known as Shin Satellite) is the dominant satellite service operator in Thailand. At
the same time CAT Telecom has continued to play a significant role in the country’s satellite segment
as it owns and operates much of the infrastructure used in both domestic and international satellite
communications.

6.2.4.2 CAT Telecom’s role
In addition to the international satellite communications, CAT maintains responsibility for domestic
satellite services. In fact, the Thaicom satellite system was initially used mainly for domestic purposes.
With a master station at Nonthaburi and approximately 30 domestic satellite earth stations all around
the country, CAT has been supporting basic data and voice circuit, high-speed data communications,
TV distribution and broadcasting services. The operator has a 30,000km fibre network across Thailand,
which is linked into the global communications network via four cable landing stations (Petchaburi,
Songkhla, Chonburi and Satun), and three satellite earth stations (Sri Racha, Ubon Ratchathani and
Nonthaburi). CAT has also been utilising Thaicom satellites, as well as Intelsat satellites, to provide
Very Small Aperture Terminal (VSAT) applications across the country.

6.2.4.3 History of development
Shin Corp’s subsidiary, Shin Satellite, was awarded a licence in 1991 to operate Thailand’s domestic
satellite system and also launch satellites under a 30-year concession from the then Ministry of
Transport and Communications. The agreement was a BTO concession. It was offered exclusive rights
under the concession to operate the network without competition for eight years forcing all companies
in Thailand that wished to use satellite links to contract through Shin Satellite. This exclusive period
came to end in 1999.

Satellite companies wishing to offer services in Thailand were subsequently permitted to do so, subject
to certain government enforced conditions. First, the offering company was required to have a
registered branch office in Thailand and, secondly, the operator’s nation of origin must allow similar
competition in their country. All satellite operating companies in Thailand were expected to pay fees to
the Thai government based on revenue generated.

An interesting sideline to the regulation of the Thai satellite market was the prospect of a free trade
agreement being negotiated between Thailand and US. Such a deal has the potential to allow US
satellite providers direct access to the Thai market.

Thailand has continued to make significant investments in satellite systems over a long period of time.
These have included:
 Member of International Telecommunications Satellite Organisation (Intelsat) in 1966;
 First international satellite earth station in Thailand at Sri Racha in 1968;
 CAT built two more earth stations - at Nonthaburi and Ubon Ratchathani;
 Joined the International Mobile Satellite Organisation (Inmarsat) in 1994;
 CAT started providing global mobile satellite communications through Inmarsat.

In 2008 Shin Satellite Plc changed its name to Thaicom Public Company Limited (Thaicom) in 2008.

6.2.4.4 Thaicom’s satellite network
Thaicom has launched five communications satellites in geosynchronous orbit. By 2010 there were
four satellites in service. The Thaicom fleet also includes iPSTAR which was claimed to be the world’s
first broadband satellite utilising an Internet Protocol (IP) platform.

Exhibit 5 – Thaicom’s satellite network – 2011

6.2.4.4.1 Government interest in Thaicom
In June 2010 the Thai government confirmed that it was seeking to buy a substantial stake in Thaicom
from Temasek Holdings. The government is keen to recover full ownership of the satellite business and
its three orbital slots. Temasek’s stake in Thaicom had 11 years remaining on its concession to operate
satellites. Temasek was open to the possibilities.

The government said it needed to resolve several legal issues before it could conclude a deal. These
included:
 amendments to the concession contract that might not be legitimate;
 a dispute over a US$6 million compensation for damages to one of the satellites;
 the launch of the iPSTAR satellite that may have breached the concession contract.

In February 2011 the MICT asked Thaicom to launch a new back-up satellite for its decommissioned
Thaicom 3 satellite. The ministry noted that Thaicom’s iPSTAR broadband satellite was a different
type of satellite and therefore could not be counted as a back-up as claimed by Thaicom. The ministry
was also seeking US$6.7 million compensation from Thaicom for physical damage to Thaicom 3.

Furthermore, it required Thaicom’s parent Shin Corp PCL to return to 51% ownership as indicated in
its original concession contract. A state-backed panel had found that previous amendments of
concession contracts that allowed Shin to reduce its shareholding in Thaicom from 51% to 40% failed
to comply with the law as it lacked Cabinet approval. In the meantime, Shin Corp had become 96.1%-
owned by units of Singapore’s state-owned investment company Temasek Holdings Pte.

6.2.4.5 Satellite TV
Although the government planned to open satellite services to competition after the monopoly of Shin
Satellite expired in 1999, it subsequently decided that it wanted to allow the monopoly to continue
because it considered that Shinawatra was not yet ready to compete with foreign operators. As a
consequence the satellite market in Thailand continued to be dominated by Shin Satellite (later to be
known as Thaicom) to the extent that national pay TV operators were obliged to use Thai satellites for
their communications. The concession for services via satellite was due to expire in 2014.

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7. INTERNET MARKET

7.1 OVERVIEW

The Thai internet market is continuing on its growth path of the last number of years. The demand for
internet and internet-related services has finally begun to increase as evidenced by the expanding
volume of international bandwidth. Recognising that the surge in services has been occurring from a
relatively low base, Thailand still has a lot of development work to do to catch up to some of the other
countries in the region.

The country’s estimated PC penetration rate, for example, was still only around 16% at end-2010 and
the development of high-speed access had really only just started. Operators were looking at a variety
of delivery methods to augment internet penetration. The burgeoning mobile market in Thailand
ensured that mobile phones, as well as set-top boxes, were high on the list of potential delivery devices.
At the same time, the cybercafe in its different forms had already established itself as a key element in
the country’s access equation.

The development of local content in the local language was continuing to be important in the support of
Thailand’s internet growth. For a considerable time, many of the websites and portals had been focused
on the expatriate and English-speaking communities. This had changed dramatically, however, even
though it can be argued that the majority of internet users in Thailand were able to speak and read
English. A survey undertaken by IDC Asia Pacific indicated that of the Thais that were not yet
accessing the internet, more than 63% of them would be more inclined to surf Thai language sites
before looking at English content.

Internet access speeds have provided a major challenge for Thailand. Operators had researched the
merits of both Digital Subscriber Line (DSL) and cable modem technologies as a means of delivering
high-speed access. These same operators had been waiting for the formation of the National
Telecommunications Commission (NTC) as a way of airing their case for deregulation of international
connectivity. In the meantime, the Telephone Organization of Thailand (TOT), somewhat surprisingly,
initially passed up the opportunity to provide high-speed access itself, preferring to licence other
providers to offer this service.

The two government-owned telcos, the Telephone Organization of Thailand (TOT) and the
Communications Authority of Thailand (CAT) had been arguing for many years over who had the right
to deliver international bandwidth to Internet Service Providers (ISPs). CAT’s argument was that it
owned the monopoly on international connectivity; therefore ISPs must purchase the bandwidth from
them. TOT’s argument was that it controlled the monopoly on neighbouring country international
connections; therefore it should be able to offer circuits to ISPs that connected with, say, Malaysia.
This would allow, in effect, ISPs to carry IP traffic back to the US or Japan without the need for CAT’s
involvement. In the limited cases this had been tried, CAT, using its shareholder voting rights in each
of the ISPs, had tried to stop the practice at board level. Despite this TOT managed to get directly
involved in carrying international internet traffic. The issue was effectively sidelined, however, when
the NTC officially ended CAT’s monopoly over local and international internet exchange gateways in
2006.

By 2008 competition in the local broadband segment was heating up as the three fixed-line telephone
providers, TOT, True and TT&T, with a combined seven million fixed-line subscribers between them,
began to aggressively promote their broadband offerings in the market. The Internet Service Providers
Association (ISPA) expected penetration of broadband substantially, with five to 10 million subscribers
by 2009. But this forecast was overly optimistic going forward. There were still only around three
million broadband subscribers by end of 2010. In the meantime, according to the ISPA, dial-up internet
demand was continuing to decline due to more affordable broadband services becoming available.

7.2 INTERNET STATISTICS

In a market where internet statistics are not reliably reported the best estimate of internet user
penetration in Thailand at the end of 2009 was 21%. It is noted that according to the International
Telecommunication Union (ITU) statistics the estimated number of internet users in Thailand fell in
2008. It was not clear if this was a statistical aberration or that the usage levels have actually fallen.
The last official figure published by the ITU for internet subscribers in Thailand was 2005. Estimates
based on industry information have been provided for subsequent years in Table 47 below.

Note: For statistics on broadband internet services, see chapter 8.2, page 67.

Table 46 – Internet users – 1996 - 2011

Note: Internet users are those accessing the internet from school, university or work, as well as from
individual household or business accounts. Subscribers are individuals who pay for internet access
accounts. For example, a work account is just one subscription can have many users within that one
subscription.

Table 47 – Internet subscribers – 1997 - 2011

Table 48 – International internet bandwidth – 2000 - 2010

7.3 ISP MARKET

7.3.1 Overview

Thailand had 20 licensed commercial ISPs by 2010. Of these, 19 were reported to be operational,
ranging widely in both size and capability.

The ISP market has undergone significant restructuring, with further changes likely into the future.
After a long period of debate about the role of CAT in the ISP market, the NTC finally started
introducing a changed licensing arrangement in 2005 (when the CAT concessions expired). Then in
another key move the NTC opened up the internet gateway market in 2006.

Exhibit 6 – Licensed ISPs in Thailand – 2011

Exhibit 7 – ISPs operated by telecom companies

7.3.2 Market restructuring

7.3.2.1 Background
Initially every ISP in Thailand operated under a concession issued by CAT. In exchange for being
granted a concession, the ISP was required to assign CAT a shareholding in the company free of
charge. This shareholding was typically 35%, of which 2%-3% was slated for CAT employees. The
exceptions to the rule were Internet Thailand, CS Communications and JI Net of which CAT held 33%,
49% and 30% respectively.

The arrangement whereby CAT had equity in every ISP in the country effectively limited the
investment that ISPs were able and prepared to make in their operations due to the investment laws
surrounding CAT. Although the authority’s holding was given free of charge, the government had a
law that stated that CAT’s investment in any company must be equal to or below a nominated figure.
So therefore as the CAT shareholding percentage was required to remain the same as was originally
given to it and the shareholding could not exceed a predetermined limit, ISPs were limited in their
capital raising abilities. This situation had also caused much needed merger and acquisition activity to
slow down.

CAT had continued to defend its equity participation in ISPs, saying that the investment model was not
its fault. CAT argued that when the first concession holder KSC initially applied for an ISP licence that
KSC suggested the model and so CAT believed it only fair to apply the same model to each new
player.

Thai ISPs had been struggling with a range of financial difficulties, initially as the online advertising
slump impacted on the market, and then as competitive pricing in the sector became more intense.
Subscription fees started to fall, potentially making the service more accessible and allowing subscriber
numbers to be increased. At the same time, however, language barriers and low computer literacy
restricted the market in dial-up users.

The pressure had been mounting within the sector for consolidation, but government regulations and
vested interests in the monopolised industry continued to block any such moves. The industry had
remained tightly controlled by CAT with its shareholding in every ISP and its monopoly on
international internet bandwidth. The ISPs had been unsuccessfully negotiating plans with CAT to buy
back their shares since 2001. At the same time, the issuing of any further licences became bogged
down over the period spent waiting for the NTC to be established.

7.3.2.2 Restructuring and reform
In a push to reduce operating costs and become profitable, two big ISPs – CS Communications
Loxinfo’s Point Asia Dot Com – merged in 2003, creating the country’s biggest ISP with an estimated
combined market share of more than 40%. Post the merger, 70% of the traffic on Thailand’s 17 ISPs
was dominated by just four operators. Although it was anticipated that such a move would push smaller
operators to seek to join forces for survival, this did not happen. Internet Thailand was the secondranked
ISP in the country at the time with about a 20% market share.

With the pressure building for the restructuring of the ISP market, the opportunity for change came
when the long proposed NTC was finally set up in late 2004. Whilst this move potentially heralded
significant change in the internet market, it was going to be some time before the newly created
regulator was able to develop and implement the expected policy changes. Moreover, possible changes
in the ISP market were in turn linked to even more complicated issues such as the future of CAT.

Following the setting up of the NTC, Thailand’s ISPs filed an appeal with the new regulator in 2005 in
which they sought the issuing of new internet licences before they expired later in 2005. The regulator
had been delaying the allocation of new internet licences, pending the government finalising the
drafting of a new internet licensing policy.

The NTC earlier had met with ISPs to discuss a set of broad internet guidelines that focused on the
types of ISPs eligible for the new licences and the contentious issue of fair market competition. True
Corp had argued that the NTC should focus on how to liberalise its international bandwidth policy.

CAT Telecom was in a monopoly position to purchase international bandwidth from foreign carriers
for sale to local ISPs. CS Loxinfo agreed with a suggestion that the NTC should force all telecom
operators to allow ISPs to use the local loop. Some telecom operators had not been allowing ISPs
access to their local loops.

In the meantime the NTC announced that it planned to issue free licences to all ISPs once it had
guidelines for issuing permanent concessions in place. With the ISP licences due to expire, in 2005 the
NTC took action under its newly drawn up regulatory structure. It awarded the first Internet Service
Provision licence to ISP KSC, thereby signalling the start of a new licensing regime for ISPs in
Thailand. KSC’s original licence, granted by CAT, had already expired by that stage.

The NTC took another important step towards opening up the country’s internet market when in 2006 it
broke up CAT’s monopoly on local and international internet exchange gateways. Following this
decision, the NTC awarded gateway licences to a number of ISPs.

Progress along the reform path was looking increasingly uncertain by early 2011 as the government
prepared to replace the NTC with a new regulator, the National Broadcasting and Telecommunications
Commission (NBTC). This was slated for launch sometime in the second half of 2011. The new
structure was expected to be considerably more conservative than the NTC in pursuing market reforms.

7.4 THAILAND’S INTERNET GATEWAY EXCHANGES

7.4.1 Overview

As part of its long-term monopoly role of providing international internet access for the country, CAT
has been operating the Thailand Internet Exchange (THIX). All ISPs in the country were required to
use the CAT gateways. The THIX provided a facility whereby ISPs were able to connect to the
international internet backbone, at the same time being able to exchange data with domestic ISPs.
Before the THIX was established, ISPs had to rent an International Private Leased Circuit (IPLC) in
order to connect to the international internet backbone and, in particular, the US, with its massive
content. And when Thai ISPs connected with each other, they sent and received data via the IPLC to
the US. This resulted in low efficiency and high cost.

The THIX consisted of two gateway services:
 International Internet Gateway (IIG) – delivered information between internet networks in
Thailand and the internet network throughout the world. ISPs could use the IIG to connect to the
internet network worldwide.
 National Internet Gateway – provided a data exchange among domestic ISPs by connecting ISP
networks using domestic links. The links were within the country. It was not necessary to connect
to the foreign internet network.

The performance of the internet gateway facilities under CAT’s management has drawn considerable
criticism over the years, being far less reliable than would normally be expected. For example, during
2006 total outages of CAT’s single IIG in Thailand added up to 230 hours over the year, up from 138
hours in 2005 and 63 hours in 2004, far exceeding the international standard rate of eight hours per
year.

7.4.2 Opening up of gateway market
The NTC issued an important ruling in 2006 that was to see the opening up of the domestic and
international internet exchange gateway monopolies. The regulator set out the rules for ISPs to become
gateway operators, announcing that it would charge ISPs an upfront fee to obtain an internet gateway
licence and that the operators would then be required to pay an ongoing licence fee equal to 3% of
annual revenue. Up to that time CAT and the National Electronics and Computer Technology Centre
(NECTEC) had been the only domestic internet exchange operators. ISPs had long been complaining
that their ability to expand their customer base was being undermined by CAT’s monopoly over
international gateway access. Sending their traffic through CAT’s single gateway, they argued, had
been dramatically slowing connections with overseas websites.

Following the decision to open up the International Internet Gateway (IIG) market, the NTC awarded
gateway licences to:
 CS Loxinfo;
 Sky Office (a subsidiary of True);
 Advanced Datanetwork Communication.

An IIG licence was also awarded to a company named Sip that planned to offer VoIP services.
As a reaction to an influx of new competition, CAT Telecom immediately cut its fees for IIG services
by up to 63%. The cost reduction included an average 30% cut in IIG costs for ISPs.

The opening up of the international internet gateway market coincided with a large expansion in
assigned international bandwidth. Total IIG traffic in Thailand increased significantly to around
100Gb/s by end-2009, up from around 55Gb/s in 2008 and 22Gb/s in 2007, fuelled mainly by the
liberalisation of the IIG sector. The overall value of the IIG market increased from around THB3
billion in 2008 to around THB5 billion in 2009. The new arrangement was to charge ISPs an upfront
fee to obtain an internet gateway licence and the operators would then be required to pay an ongoing
licence fee equal to 3% of annual revenue. This effectively ended CAT’s monopoly over the
international internet gateway access.

Exhibit 8 – International internet gateway operators in Thailand – 2011

7.4.2.1 True Internet Gateway (TIG)
True Corp’s subsidiary True Internet Gateway abandoned negotiations to connect with CAT Telecom’s
IIG in early 2007, after it accused CAT of violating NTC regulations. Instead, the company announced
it planned to negotiate direct links with overseas providers in Malaysia and Singapore. CAT had
reportedly been charging TIG THB24,000 each month, compared with an average of THB15,000 for a
direct link with an international provider.

TIG subsequently noted that the country’s broadband internet boom would see double-digit business
growth consistent with the industry average. But the company acknowledged that revenue would not
rise along with the projected growth due to intense competition from more operators resulting in a
sharp drop in bandwidth charges. The company said that total traffic via the international gateway had
risen to 27Gb/s in 2008, up from 17.3Gb/s at end-2007 and 7.6Gb/s in 2006. TIG experienced doubledigit
traffic growth in 2008, with its bandwidth allocation running at 6.4Gb/s, representing a 20%
market share.

True’s TIG unit spent THB50 million in 2008 on the expansion of its gateway to Europe; this followed
the investment of THB300 million installing infrastructure in major cities in Asia and US. The internet
gateway division was also working on more peering partners in order to create faster service speeds and
improved transit arrangements, as well as expanding its domestic internet exchange to provide IP-based
transit services.

7.5 REGULATORY ISSUES

After many years of lobbying the government by the service providers and the industry, the ISP market
in Thailand finally began to benefit from the structural reform after the establishment of the NTC in
2004. An early indication of the NTC’s intention came when in principle approval was given to a draft
telecom master plan covering the period 2005 to 2010. This was followed by a series of important
decisions:
 issuing of new Internet Service Provision licences (initiated in 2005 when the CAT concessions
started expiring);
 allowing ISPs to offer VoIP services without getting a new licence;
 opening up the local and international internet exchange gateways.

The NTC also formally issued a Telecommunication Enterprise Master Plan for the period 2008 to
2010. The plan confirmed the authority’s focus and emphasis on strengthening the Thai telecoms
market by ‘allowing free and fair competition and greater participation by the public.’ The regulator
specifically mentioned the licensing of WiMAX frequencies.

By end-2010 this steady progress on reform looked like it was about to suffer a setback, faced with the
government’s plan to replace the NTC with a more conservative NBTC.

7.6 VOICE OVER INTERNET PROTOCOL (VOIP)

VoIP became a reality in Thailand in the late 1990s, with many illegal operators offering cheap
international calls by utilising by-pass networks. This was the so-called ‘grey market’. Although the
operations were illegal in Thailand, in most instances the local companies were supported by big
international businesses and the phenomenon quickly changed both the international and national voice
markets in Thailand. As a consequence call prices started to rapidly fall.

CAT began offering what it called ‘CAT PhoneNet’ discounted international calls in 2003 using a
VoIP platform. The rates were between 20% and 40% lower than for conventional calls. TOT then
introduced a VoIP-based international call services in 2006 in response to a request from the MICT to
bring down the cost of International Direct Dial (IDD) calls.

NTC issued a key ruling in 2006 that was to allow ISPs to offer VoIP services without getting a new
licence. The regulator, however, was set to charge an entry fee for either the domestic or internet
gateway licence, while exchange operators had to pay 3% of annual revenue as a licence fee. Included
in the NTC’s ruling was a decision to open up the local and international internet exchange gateways.
The NTC did not, however, decide to open up the international call-service market, pending a further
study on the matter.

At the same time, the NTC set up new licence conditions and interconnection charges to combat the
country’s still-flourishing unlicensed VoIP industry.

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8. BROADBAND MARKET

8.1 OVERVIEW

The Thai broadband internet market has finally begun to move forward in a consistent fashion. The
number of broadband subscribers having increased sharply in 2005, strong growth has continued
through into 2011. Despite the growth, Thailand’s broadband penetration remains relatively low at
around 4% in 2010.

There are numerous challenges to the achievement of ongoing growth. Thailand has low PC
penetration rates (estimated at 16%), low Average Revenue per User (ARPU) for broadband services,
expensive international bandwidth and powerful incumbents that do not have any strong incentive to
move forward and open up their network.

In a somewhat desperate effort to stimulate the market, the Ministry of Information and
Communications Technology (MICT) called on operators to reduce their broadband tariffs by 50% in
order to make internet access more affordable. The big operators were quick to dismiss the idea.
The expansion of broadband internet in Thailand has seen the increasingly widespread adoption of
Digital Subscriber Line (DSL) services, together with some significantly lesser deployment of the cable
modem option, as well as some broadband wireless access. The transition to these other technology
platforms had previously been inhibited by the Thai regulatory environment which saw ISPs unwilling
to invest heavily in the necessary infrastructure.

Interestingly, the attraction of a cheap unit fee charge for the use of a fixed-line to access a dial-up
account was for a long time a compelling reason why users were not in any hurry to migrate to
broadband. True Corp (previously Telecom Asia, rebranding itself in 2004) has become the major
provider of broadband internet services in Thailand, pushing its DSL service in particular, but also
getting involved in wireless as a broadband platform.

By end-2010 it was estimated that True held about 40% of the 2.8 million broadband subscribers in the
country. Although True was a clear ‘first mover’, the government’s regulatory changes in this area
have also seen other operators starting to be more active in the broadband market.

8.2 BROADBAND STATISTICS

Table 49 – Fixed broadband subscribers and penetration – 2001 - 2011

Table 50 – Broadband subscribers and households – September 2010

Table 51 – Major broadband players and subscribers – September 2010

Table 52 – DSL subscribers – 2002 - 2010

Chart 4 – Fixed broadband subscribers – total vs DSL – 2003 - 2010

8.3 NATIONAL BROADBAND POLICY

In October 2010 the MICT presented a draft national broadband policy to Cabinet. The government
proposed extending broadband coverage across the nation within a two year period using the services
of TOT and CAT Telecom. The ministry subsequently told TOT and CAT Telecom to put on hold
major network investment plans until a full mapping of locations had been completed as part of the
proposed national broadband policy. The ministry said it intended to promote the practice of sharing
network infrastructure and reducing redundant investment among private and state-owned companies.
TOT was targeting expenditure of THB13 billion for the deployment of an NGN as part of its support
for a national broadband strategy.

In the meantime, the Thai government told the TOT and CAT to support a national broadband project.
The government said it was aiming to make broadband available for as little as THB150 to 200 per
month to boost the uptake of broadband. The minister said that all parties involved in planning for 3G
should shift their focus to a single broadband network and that 3G is only part of the national
broadband project.

The national plan was designed to expand broadband coverage to 80% of the population by 2015 and to
95% in 2020. The policy would also ensure that economically important provinces have access to
100Mb/s connections by 2020. The policy also includes linking up 30,000 schools and 15,000 hospitals
to the internet by 2015. Monthly subscriptions would be no more than 2% of average income (making
the subscription rate around THB150 to THB200, as already noted; this compared with fees as of 2010
of around THB599 per month. The MICT’s master plan included a proposed Broadband Committee
headed by the Prime Minister, Abhisit Vejjajiva. Cabinet approved the investment of THB 20 billion
over five years by TOT and CAT Telecom on the network.

In November 2010 six Thai operators signed a government proposal for the national broadband project,
despite complaints from the telecom industry that the plan was far too light on details. TOT and CAT
Telecom and private players AIS, DTAC, True Move and Digital Phone signed a Memorandum of
Understanding (MoU) to share broadband network resources. Details of each company's participation
were to be decided by a joint industry panel.

A range of different strategies have been adopted to encourage broadband adoption in Thailand, with
mixed success. One of the most significant moves was the opening up of the international internet
gateway market.

8.4 DIGITAL SUBSCRIBER LINE (DSL)

By 2009 DSL was holding its own as the dominant broadband internet access platform in Thailand.
Although it was difficult to get any precise figures, DSL technology was supporting about 95% of the
fixed broadband internet services in the country by that stage. The leading ISP in terms of DSL
subscribers was True Online.

The initial rollout of DSL services in Thailand had taken place over a relatively short period of time in
2000/01. Market leader True first launched a DSL service called TA Express in mid-2001. (The
company was still flagged as fixed-line operator Telecom Asia at the time.) The TA Express service
was offered in the Bangkok region where Telecom Asia had its 2.5 million access lines available for
DSL deployment.

TOT involvement in DSL proved interesting. Even though TOT could easily have offered DSL over its
fixed-line network, it chose not to get directly involved and instead it continued to play its ‘concession’
role. It formed joint ventures with two companies that it licensed to offer DSL-based services. The two
operators were United Broadcasting Technology (UBT) and Lenso DataCom. UBT was the first
granted a concession by TOT, in 2000, followed by Lenso. The concession gave both companies access
to TOT’s 1.5 million fixed lines in Bangkok.

UBT contracted Nokia in 2000 to install DSL broadband IP access network equipment. Launched later
that year, the service was based on DSL Access Multiplexers (DSLAMs) that supported both ADSL
and Symmetric DSL (SDSL) product offerings. The service, however, proved disappointing, with
speeds limited to 128Kb/s and access sold by the hour. UBT’s DSL subscribers paid THB5,500 for a
modem, THB500 per month for the DSL service itself and approximately THB35 per hour for internet
access.

8.5 CABLE MODEM

Despite what appeared an excellent opportunity to use infrastructure already in place, the deployment
of cable-modem based broadband internet had had only limited success in Thailand by 2009. In
Bangkok alone it was estimated that the cable TV infrastructure presented a potential market for highspeed
cable modem internet service of over 800,000 households. This had not been exploited by the
relevant operators.

True, then operating as Telecom Asia, started trialing high-speed internet access via cable modem a
decade ago. It subsequently offered a commercial cable modem service, with two speeds – 256Kb/s
and 1Mb/s. The company first offered its cable TV service in Bangkok through a joint venture with
United Broadcasting Corporation (UBC). True subsequently restructured its diverse portfolio and
Thailand’s largest cable TV provider was rebranded as TrueVisions. This saw its ISP unit TrueOnline
working with its cable TV unit TrueVisions to offer cable modem broadband internet services, usually
bundled with cable TV services.

Following its launch in 2007 True’s bundled service package, including broadband, mobile, and pay
TV services, called ‘Super Hi-speed Package’, had managed to attract a total of 254,000 subscribers by
the end of that year. It was estimated that by end-2008 it had signed up a total of 295,000 subscribers
for this Super Hi-speed Package. In the meantime, by 2008, True had increased its offered speeds up to
2Mb/s.

8.6 INTERNET VIA SATELLITE

The satellite market in Thailand is dominated by Thaicom (previously known as Shin Satellite or
ShinSat). Satellite-based internet services have been provided by the Thaicom 3 satellite utilising Kuband
transponders. The company’s IP-based satellite platform, iPSTAR-1, which was designed to offer
50Gb/s capacity, was successfully launched in 2005. The company claimed it to be the first purposebuilt
internet satellite system in the world. (Note: The iPSTAR satellite was also being referred to as
Thaicom 4.)

A number of years prior to the launch of the satellite itself, the iPSTAR’s first generation earth station
was brought into service. The company initially launched its broadband offering in Thailand using
ground stations linked to satellites already in orbit. As well as high-speed internet access, the service
offered Virtual Private Networks (VPNs), VoIP and video conferencing.

In 2008 Aces Regional Services, the handheld mobile satellite terminal distribution arm owned by
JINET, moved into the broadband satellite market to capitalise on the growing demand for high-speed
internet access. The company began marketing the Inmarsat Bgan Sabre terminal, priced at around
THB80,000 (US$2,500). Customers were being charged THB1,000 (US$32) as a monthly fee plus U$1
a minute for voice services. Mobile phones could also be linked with the terminal through Bluetooth
technology for both voice and data services. The company claimed the terminal operated at speeds of
up to 384Mb/s.

8.7 WIRELESS INTERNET

Wireless internet in its various forms has started to appear across the Thai market. The early offerings
were fairly basic and did not attract much customer interest. Subsequent initiatives by operators, most
notably True, saw the rollout of WiFi hotspots across the country, followed by the marketing of WiFi
subscriptions. Inevitably, however, the focus has been shifting to the World Interoperability for
Microwave Access (WiMAX) platform. Earlier, there had been a number of pilot WiMAX networks
launched. By 2009 the market was keenly awaiting on the NTC to initiate the licensing of the allimportant
WiMAX frequencies.

8.7.1 WiFi

The development of WiFi in Thailand has been taking place over a number of years and it has been
somewhat fragmented. Not surprisingly, True Online, with an already extensive broadband reach, was
the main player in the WiFi market. It started with 300 WiFi hotspots in Bangkok in 2004. By the start
of 2009 the operator was claiming over 16,000 WiFi hotspots around the country in locations such as
coffee shops, restaurants, hotels, hospitals, department stores, movie theatres, convention centres and
office buildings. At the same time it was reporting a WiFi subscriber base totalling approximately
109,000; this was up sharply from 31,500 at the end of 2007

In late 2010 TOT partnered with the city of Phuket to provide the public with free WiFi broadband
internet access in the tourist resort under the banner ‘Phuket Free Wi-Fi’.

8.7.2 WiMAX

For some years telcos and ISPs in Thailand have been positioning themselves for the much-anticipated
allocation of WiMAX frequencies by the regulator. In the meantime, the NTC was resisting pressure to
speed up the licensing process. Reports were emerging towards the end of 2008 that the NTC was
expecting to finalise licensing terms and regulations for WiMAX wireless broadband services and to
issue operating licences before the end of 2009. Then, in September 2009 the NTC said it planned to
issue WiMAX licences shortly after the 3G licence auction that was planned for later in 2009. The
licensing process suffered delay after delay, however, and was looking likely to be pushed well into
2011.

There was also the issue of the relationship between WiMAX and 3G/3.5G platforms. The president of
TT&T predicted that a WiMAX data network was likely to become ‘a formidable rival’ to mobile
phones unless operators were able to ‘diversify to 3G within five years’. The increasing market interest
in the platform saw the NTC having to reject a request by carriers to start testing WiMAX broadband
wireless technologies. The NTC had by that stage completed guidelines for testing the wireless
technologies but had not given a green light to any applicants.

8.7.2.1 Testing
By 2008 the regulator, having given permission to 14 companies to test WiMAX over a three month
period, announced that it was waiting on the test results.

The NTC gave approval in principle in late 2006 to an application from Shin Satellite to test a WiMAX
wireless broadband internet access service to see if it jammed its Thaicom 5 satellite. ShinSat planned
to share some of the satellite’s 3.5GHz spectrum with a proposed WiMAX service. Previously, the
NTC had decided that telecom service providers operating between 2.5GHz and 3.5GHz could apply to
conduct WiMAX tests ahead of offering the service commercially. ShinSat held the 3.5GHz spectrum,
True’s pay TV operator UBC True had 2.5GHz and TOT was at 2.4GHz. The frequencies had been
assigned by the defunct frequency-allocation committee. The NTC had been postponing the allocation
of bandwidth for WiMAX and other services such as 3G mobile, pending the establishment of the
National Broadcasting Commission (NBC). The telecom law stipulated that the NTC and NBC must
work jointly to create a frequency table, manage frequency use and prescribe frequency-utilisation
regulations.

8.7.2.2 Licensing
The NTC initiated the licensing process when in late 2006 it invited companies to apply for WiMAX
frequencies to provide wireless broadband internet. The regulator said that licensees would be
permitted to provide WiMAX services on the 2.5GHz and 3.5GHz spectrum bands.
The 5GHz spectrum, which is commonly used for WiMAX in other countries, was not to be made
available at this stage. Shin Satellite, True Move and TOT stood to be the first telecom operators to
develop WiMAX as they already owned the available spectrum and had used them for their businesses.
True Online indicated in 2007 that it was freezing all new investment in high-speed internet networks
until the NTC clarified its licensing and technology policies. The company remained committed to
investing in WiMAX broadband technology but was concerned about the NTC vacillating on policy
matters.

The timetable for issuing of WiMAX licences continued to be modified. Reports in early 2008
suggested that the NTC was set to award WiMAX operating licences in the third-quarter of 2008. The
announcement followed a series of unfulfilled promises to issue these and other next generation
concessions; in 2007 the regulator said 3G licences would be allocated in the first quarter of 2008.
Subsequently it was reported that five WiMAX and three 3G spectrum licences were likely to be
offered in an auction, although the choice of method – straight auction versus beauty contest – had not
been decided at the time.

According to the results of a joint study by the NTC and the World Bank released in 2009, NTC, in its
role as the Thai telecommunications regulator, should auction new licences for broadband wireless
access technologies on a regional basis. The NTC confirmed that it planned to issue WiMAX licences
shortly after the 3G licence auction.

In June 2010 the NTC reported it intended to issue spectrum for WiMAX at both 2.3GHz and 2.5GHz.
In the meantime, the NTC had finalised its plan for 2.5GHz spectrum allocation, whereby winners
could bid to offer services with the help of NTC funding in upcountry areas.

8.7.2.3 NTC project – 2010
The NTC announced in mid-2010 that it would promote wireless broadband in four provinces for
THB99 per month with a connection speed of 1Mb/s. The project was part of the ongoing development
of its service policy for wireless broadband access, such as WiMAX. Under the policy, the regulator
planned to use the 2.5GHz spectrum for promoting low-cost wireless broadband services in regional
areas while the 2.3GHz spectrum would be used to promote a general nationwide wireless broadband
service.

The service would use the NTC’s 40 MHz block in the 2.5GHz spectrum. After the first four provinces
(Mae Hong Son, Nong Bua Lam Phu, Sa Kaeo and Pattani), the regulator planned to eventually expand
the service to 15 to 20 provinces.

The operators selected to carry out the projects would be awarded with Type-2 licences valid for 10
years. The licence required the holder to cap monthly fees at THB99 for the first five years of operation
and to cover 25% of schools, hospitals, and tambon (village) administration organisations in the first
year, growing to 50% in the second year, to 80% in the third year, and to 90% in the fourth year.
Furthermore, winning bidders would not be allowed to bid for 3G 2.1GHz licences to prevent single
ownership of too much spectrum.

8.8 FIBRE-TO-THE-HOME (FTTH)

Unlike many of its neighbours, particularly Singapore and Malaysia, Thailand had been slow to initiate
plans for building FttH infrastructure, being particularly hampered by long-running regulatory delays
and disputes. A number of small FttH projects have been mooted over the years but the proposals have
been characterised by subsequent lack of action.

TOT said in 2007 that it was connecting 4000 homes and buildings on the resort island of Phuket to a
proposed FttH network, in what was intended to be the first wide-scale application of FttH in the
country. TOT was set to spend THB136 million (US$4.2 million) on the initiative, contracting Italian-
Thai Development, a major infrastructure developer in the country, together with Siam Fibre, to install
the network.

The project had a break-even point of four years, according to TOT estimates. Japanese equipment
supplier Fujikura Ltd received an order from TOT in early 2008 for a 3,200 subscriber FttH system in
Phuket. However, this initiative to offer FttH services failed to materialise.
CAT Telecom awarded a THB2.15 billion (US$64.2 million) fibre-optic network project to Marubeni
(Thailand) in 2008, despite questions raised by Thailand’s Office of the Auditor General (OAG) over
the project’s transparency.

The network, officially known as the Automation Switched Optical Network (ASON), was designed to
link all parts of the country with the capital Bangkok via a series of optical fibre cables totalling
9,000km in length.

CAT Telecom signed the contract with Marubeni in late 2008, in a deal said to be worth THB2 billion
(US$59 million). The OAG told CAT that it would not object to the agreement being signed, but
reserved the right to inspect the technical details later. Subsequently the project appeared to have been
put on hold.

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9. BROADCASTING MARKET

9.1 OVERVIEW

The Thai broadcasting industry has continued to undergo upheaval in what has been a very competitive
market. With six free-to-air (FTA) channels and one national pay TV operator, the country has a
television household penetration rate of around 95%, representing one of the highest penetrations in the
region. Although starting from a low base, pay TV in its different forms has been steadily lifting its
penetration and had reached around 12% of TV households by 2010.

Table 53 – Key broadcasting statistics – 2010

With growing competition, FTA television stations have had to make adjustments to programming.
Viewers have been demanding longer transmission times and an increase in both quality news and
current affairs programming. This has generally led to more frequent and better quality feeds covering
international and domestic news on both FTA and pay television.

Casting a shadow over Thailand’s broadcasting industry has been the failure of successive governments
to put a new broadcasting regulator in place. Eventually a combined telecom and broadcasting
regulator, the NBTC, was being proposed. By early 2011 the government was moving to finalise the
strategy.

9.2 REGULATORY ENVIRONMENT

Whilst television has proved to be a most popular and enduring form of media in Thailand, the
regulation of the television industry itself has left much to be desired. Putting a progressive regulatory
regime in place has been plagued by political squabbling and indecision. This is hardly surprising given
the period of ongoing political instability that the country has been enduring and the importance placed
on television as a form of mass communications throughout the country.

A series of proposed reforms for Thailand’s television broadcasting market remained ‘on the table’
awaiting further development and government action for many years. The broad plan for these reforms
can be traced back to the Broadcasting Frequencies Act in 2000. Implementation of the Act was
waiting on the establishment of the proposed NBC.

9.2.1 Proposed National Broadcasting Commission (NBC)

Under the provisions of the Broadcasting Frequencies Act the NBC was to be formed within 120 days
of the legislation coming into force. However, as seemed to be happening with everything involving
the government in Thailand, the NBC had a difficult gestation period. Its creation meant significant
changes to related organisations such as the Ministry of Transport and Communications, the Post and
Telegraph Department, the Telephone Organization Thailand and the Communications Authority of
Thailand, the Mass Communications Organisation of Thailand and, of course, private operators in the
broadcasting industry.

The NBC’s sister organisation, the NTC, had finally been put in place in 2004. But the NBC continued
to run into difficulty. In 2005 a Thai court voided the appointments of the NBC board members, citing
the unconstitutionality of the selection process. It was clear that the regulatory environment for the
broadcasting sector would remain uncertain in Thailand until the NBC or something similar was put in
place and became operational. The establishment of the NBC was over-run by a plan to set up the
NBTC.

9.2.2 Broadcasting Act 2008

By mid-2007 the government was seeking to reform the broadcasting industry by updating the
Broadcasting Act which dated back to 1955. The government explained that the law was outdated and
out of touch with the development of technology. The existing law did not regulate community radio,
cable and satellite TV stations.

The interim military-formed administration, which had been set up following the coup that overthrew
Thaksin Shinawatra’s government, was keen to rush through the legislation as it was felt future elected
governments might not reform the broadcasting sector because of vested political interests in the
media.

The law classified broadcasters into two categories, those that were operating on terrestrial frequencies
and those that used other means. Frequency-based operators were classified according to whether they
were public, community or commercial. While the first two could not make money from advertising,
the third could.

Cable television operators were permitted to generate revenue from advertising, but were required to
contribute a portion of their advertising fees to a broadcasting fund that would allocate money for
public and community purposes. Radio licences issued under the new law would last seven years and
television licences 15 years. To avoid monopolies, the law brought all operators under the Competition
Act and demanded that they not provide subsidies or own companies in related businesses.

The new Broadcast Act had been rushed into law at the start of 2008 after the military-formed
parliament enacted the legislation on the last day of the last parliamentary session in late 2007, just one
day before the scheduled general election. The Act required all radio and TV stations be subject to
licensing.

9.2.2.1 National Broadcasting and Telecommunications Commission (NBTC)
By 2010 the government was moving steadily towards the creation of the NBTC, its character evolving
over time. In March 2010 the House of Representatives passed a draft law governing the establishment
of the proposed NBTC and the bill was sent to the Senate for its consideration. The government said
the NBTC law was expected to come into force later in 2010. The process of selecting the NBTC
commissioners to replace the NTC was set to begin in mid-2010. The NBTC was to consist of 11
commissioners.

By December 2010 the process of establishing the NBTC was finally under way following official
publication of the Frequency Allocation Law in the Royal Gazette. The law stipulated the formation of
an eleven-member NBTC within 180 days of the royal endorsement. An NTC commissioner was to act
as an NBTC deputy member.

Coming into 2011 the structuring of the NBTC was continuing with a committee being put in place to
select candidates for the positions of commissioner. Under the frequency allocation law, there were two
parallel processes to select the candidates for the Senate to endorse.

The first process allows for educational institutes, organisations, non-governmental organisations, and
professional associations to nominate their own candidates and propose 22 short-listed candidates from
among themselves. The other process calls for the 15-member selection committee to be formed to
select the 22 candidates. The two lists, comprising 44 candidates, will then be submitted to the Senate
which is required to cast a secret vote to select the 11 finalists.

9.2.2.2 NBTC Five-Year Master Plan
By early 2011 the NBTC was already drafting a five-year master plan which was expected to be
finished by May 2011. This was despite the fact that the NBTC was still a provisional regulator and
was operating without a board. The implementation of the plan was to start within three months of a
new eleven-member NBTC board taking office.

The master plan was set to include broadband internet goals such as ensuring 10Mb/s internet services
for residents in rural areas, covering at least 50% of the population and ensuring 100Mb/s internet
services for urban residents, covering at least 15% of Thailand’s population. Nationwide, the plan
would specify that everyone should be delivered access to speeds of at least 2Mb/s within five years.
Furthermore, under the plan basic telecommunications voice services should cover 99% of the
population and data services 90%. Voice service fees would be reduced by at least 28% from the
current rates while data service charges would fall by 65%.

9.3 DIGITAL TV

Although digital TV on a broad scale was still some way off in Thailand, at least five of the country’s
broadcasters had undertaken market research and, in some cases, trials of the new technologies
available. Thailand has not yet made a formal decision as to which digital standard to adopt. Despite
broadcasters having experimented with digital terrestrial television on a trial basis, the conversion from
analogue to digital broadcasting technology was almost certainly being slowed by delays in
establishing a new broadcasting regulator.

Industry research tended to suggest that each broadcasting company would build its own transmission
network in Thailand instead of following Australian and UK models of broadcasters sharing
infrastructure.

9.4 INTERNET PROTOCOL TELEVISION (IPTV)

Thailand made some initial moves into the area of IPTV during 2005, with ADC, a Shinawatra
subsidiary, and rival company True launching TV services over internet. A number of other companies
subsequently indicated plans for entering the IPTV market, with fixed-line operator TT&T launching a
trial IPTV service in 2007, followed by a commercial launch. The efforts of some local operators to
move into IPTV are described in the following chapters.

9.4.1 Advanced Datanetwork Communications Ltd (ADC)
ADC launched an interactive TV service bundled with a broadband internet offering, using TOT’s
fixed-line telephone network. (ADC was 51% owned by AIS, while TOT owned the remaining 49%.
The company had registered capital of THB957 million.) The company announced that the bundled
services allowed subscribers to watch television content provided by ADC as well as VoD, while using
the internet and talking on the fixed-line telephone, all at the same time. The service was being offered
at THB650 a month. VoD was being charged in addition to the monthly fee.

9.4.2 True

True announced in 2005 that it was launching a broadband TV service. Cable TV service provider
UBC was to provide the content. The service was set to first be tested by subscribers with a 3Mb/s
connection, with customers having to pay for signal conversion equipment and a monthly fee. The
operator started offering its commercial IPTV service in early 2006. True was planning to have at least
300,000 IPTV subscribers by the end of 2007. However, for some unknown reason the company
slowed its IPTV marketing over the 2007/08 period and was talking about a future relaunch of the
service. True only had 3,000 IPTV subscribers in late 2008 and going forward this service did not seem
to be featuring highly in the company’s portfolio.

True Visions launched subscription TV programs on mobile phones in 2009 under the Move TV brand.
The company said mobile pay TV was initially available to True’s broadband internet subscribers who
also signed up to a True Visions package, and would be accessed via True’s public WiFi broadband
network. True had deployed more than 4,000 WiFi hotspots, covering at least 50 provinces.

9.4.2.1 Broadband TV
True set out plans in 2005 to launch a broadband TV service in conjunction with its high-speed internet
access services. Cable TV provider UBC was to supply the content. The service was scheduled to first
be tested by subscribers with a 3Mb/s connection, with customers having to pay for signal conversion
equipment and a monthly fee. The service was designed to compete with the broadband TV service
offered by ADC, which owned the rights to over 1,000 hours of news and entertainment programs.
With UBC having been acquired by the True Group, true confirmed its plan to introduce a new range
of bundled content packages, including broadband TV.

True Corp’s pay TV division, True Visions, said in 2008 that it was launching subscription TV
programs on mobile phones under the Move TV brand by the end of the year. The company said
mobile pay TV would initially be available to True’s broadband internet subscribers who also signed
up to a True Visions package, and would be accessed via True’s public WiFi broadband network.

9.4.3 TT&T

TT&T launched an IPTV trial in 2007 after numerous delays. The 13 channel service was initially
available to subscribers who registered on the company’s website. The company had invested over
THB100 million (US$3 million) on content and was set to launch commercial services before the end
of 2007. By 2009 the company was offering a service called TV Online via its internet unit Maxnet.
The service was offering 20 channels by that stage.

9.4.4 Mass Communications Organization of Thailand (MCOT)

In December 2010 Thai TV broadcaster MCOT launched a broadband TV service with the aim of
signing up 100,000 subscribers by the end of 2011. The company was working with Playwork, a
telecoms systems provider. They had co-invested around THB500 million (US$16 million) to deliver
Ving Broadband TV, offering up to 1,000 channels through a high-speed internet connection.
The government-owned Mass Communications Organization of Thailand (MCOT) was corporatised as
MCOT Public Company Limited in 2004. It was renamed it MCOT PCL and partly privatised in an
Initial Public Offering (IPO) held later that year. The Ministry of Finance, which had previously held
100% equity in MCOT on behalf of the government, retained a 77% stake after the IPO. In accordance
with Thai law, foreign investors could not hold more than 15% of the offering. Over time MCOT
developed into a local media conglomerate.

9.5 FREE-TO-AIR (FTA) TV

Although Channel 3 and Channel 7 jostled for the top spot in FTA broadcasting, the terrestrial stations
had all been losing market share to pay TV operator United Broadcasting Corporation (UBC). Cost
cutting had been difficult, however, as the broadcasters rely heavily on producing original drama, such
as the local soaps and game shows which had been dominating all viewing. Even Channel 5, the Armyrun
station, which was a legacy of a military coup in 1992, had decided to open itself to greater
programming variety and independence.

Exhibit 9 – FTA TV Broadcasters

All stations have been attempting to attract viewers by broadcasting increased local and international
news content coupled with new and differing entertainment programs. Game shows such as
Millennium Millionaire had been dominating the market; however, due to every channel developing its
own version, viewers were becoming tired of this content. Thai FTA channels shared each other’s
programming, so developing an individual identity was very difficult.

9.6 PAY TV

Launched in 1989 in Thailand, pay TV has been developing on a variety of delivery platforms: MMDS,
Direct-to-Home (DTH) and Hybrid Fibre Coax (HFC). MMDS had all but finished as operators
stopped offering service due to an extremely high number of individuals utilising illegal decoders in an
effort to receive programming free of charge.

Table 54 – Pay TV subscribers – 1996 - 2002

Table 55 – Pay TV subscribers by platform – 2002 - 2010

Subscription rates in Thailand were relatively low compared with other countries in the region.
Contributing factors included low disposable income levels coupled with comparatively high
subscription fees. Thailand’s economic recovery during 1999 to 2000 also helped to increase pay TV
subscriber growth.

Although Thailand began with two major pay TV providers, International Broadcasting Corporation
Public Company Limited (IBC) and UTV Cable Network Public Company Limited (UTV) that ended
in 1998 when the companies were merged to form United Broadcasting Corporation. Since its
inception UBC struggled with financial woes and poor penetration rates. UBC was the highest profile
pay TV operator in the country. In provincial Thailand it was estimated that by the end of 2002 one
million subscribers were obtaining programming from around 200 operators, although less than half of
them were registered officially.

In late 2001, Hong Kong-based operator, STAR, reached an agreement with a group of 15 provincial
operators to supply them with selected channels to augment the domestic terrestrials they carried on a
10 to 12 channel system. It was not expected that new entrants would come to Thailand until the
market grew, as high entry costs and the associated infrastructure made investment in the sector
prohibitive.

With more than 60 channels broadcasting soaps, movies and news, Thai audiences were able to study
Buddhist traditions on the new Buddhism channel, attend mass and bible studies on the Christian
channel, and view Islamic programs created by university students. Broadcasters hoped to exchange
programs with other nations such as the Philippines, Mexico and the USA, which already had 24-hour
religious channels.

There were reported to be around 90 regional cable TV operators licensed in Thailand. These operators
typically have only small customer bases, averaging about 1,500 subscribers each.

9.6.1 True Visions (formerly United Broadcasting Corporation (UBC))

National pay TV operator UBC was formed after the merger in 1998 between the two major pay TV
companies – International Broadcasting Corporation Public Company Limited (IBC) and UTV Cable
Network Public Co Ltd (UTV). Major shareholders in UBC included Telecom Holdings Co Ltd, a
TelecomAsia-owned company, and MIH Ltd, a major South African broadcasting company.

In a bid to reduce operating losses, UBC enlisted the support of its content providers to petition the
MCOT to allow it to broadcast advertising on pay TV channels. The ministry was the holder of UBC’s
concession. UBC said that unless MCOT allowed advertising the company would be forced to lift
subscription fees. Before receiving authorisation to proceed from MCOT, UBC began broadcasting
commercials on the majority of its channels. MCOT asked the management of UBC to remove all
forms of paid advertising or face legal action. UBC complied with the order and pay TV in Thailand
remained ad-free for the time being. However, UBC continued its long term campaign to be allowed to
run commercials. In the meantime, UBC continued to struggle financially.

Table 56 – True Visions/UBC - pay TV subscribers – 1998 - 2010

Table 57 – True Visions – total and FTA subscribers – 2007 - 2010

Table 58 – True Visions – pay TV ARPU – 2003 - 2010

UBC was acquired by True Corp in 2005, taking a 91.8% stake of UBC. True gained approval from the
Stock Exchange of Thailand (SET) to delist UBC. True said it planned to upgrade the services offered
by UBC introducing a new range of bundled content packages aimed at higher revenue users, including
broadband TV.

True Corp started offering these new bundled services in 2006, including combining UBC and mobile
phone services. The company said it was targeting users of rival mobile networks with the promise of
UBC TV access.

The cable TV operator was renamed TrueVisions in 2007. TrueVisions was operating its pay TV
services under a 25-year concession. MCOT’s original concession awarded to True Visions was
replaced in that year with a licence in accordance with the newly enacted broadcasting law. The licence
required True Corp to contribute revenue to a broadcasting fund that would allocate money for public
and community purposes.

True’s cable TV subscriber base grew rapidly in 2007. This was followed by strong growth over the
2008/09 period. By 2010 growth had slowed significantly.

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10. MOBILE COMMUNICATIONS

10.1 OVERVIEW

Thailand’s mobile market experienced a slowing of demand in 2009/10, after a period of continued
strong growth. With some easing in the expansion anticipated anyway as the market touched 100%
penetration, the demand for service has been negatively affected by a major downturn in the Thai
economy. Growth had already slowed from a few years earlier as the market’s long run of robust
expansion, a run that had started in 2000, was probably coming to a close. A slowing of the growth rate
had been expected as the penetration moved past 70% but this did not happen; the market looked to be
searching for a higher saturation point in terms of penetration, probably well above 100% penetration
(as has happened in comparable markets).

As the market began to approach saturation, the operators were hoping that long awaited 3G licences
would help stimulate further business growth for them.

The long run of growth in Thailand’s mobile sector had started almost a decade ago, with AIS and
DTAC competing vigorously for customers, especially with their prepaid offerings. They were joined
by new players, TA Orange (later branded as True) and Hutchison CAT, back in 2002/03. The
competition for market share has been ongoing ever since. Competition for subscribers intensified with
all operators progressively cutting tariffs; this in turn squeezed profit margins.

The result has been continuously falling Average Revenue per User (ARPU). (Monthly ARPU was
running at around US$8 by 2010.) Mobile operators are putting an emphasis on gaining market share
and consolidating revenues. There is also more emphasis on reducing churn rates. The introduction of
customer retention programs coupled with value-added services has significantly reduced the high
churn levels experienced in earlier years.

Thailand’s largest private telco was sold to a foreign entity in 2006 but was still causing controversy
within the industry, government and political circles into 2011. The Shinawatra family sold its 49.6%
stake in Shin Corp, the parent company of the country’s leading mobile operator, AIS, to an investor
group led by Temasek holdings for an estimated THB73.3 billion (US$1.9 billion). Temasek was
owned by the Singaporean Government. SingTel, the Singaporean government owned telco already
held a 19% stake in AIS.

10.2 MOBILE STATISTICS

Table 59 – Mobile subscribers – 1999 - 2012

Chart 5 – Mobile subscribers and ARPU – 2002 - 2010

Table 60 – Mobile services revenue and ARPU – 1998 - 2012

Table 61 – Mobile operators, subscribers and annual change – 2010

Table 62 – Other mobile operators, subscribers and annual change – March 2009

Table 63 – Mobile operators, subscribers and market share – 2010

Table 64 – ARPU (postpaid, prepaid, blended) for major mobile operators – 2009 - 2010

10.3 COMPETITION

Unprecedented growth in the Thai mobile market has seen operators regrouping in the face of
impending industry deregulation. The market has continued to experience intense competition and
operators have clearly been prepared to sacrifice profit margins for market share. The newer players
needed to work hard to apply pressure on the original duopoly established by AIS and DTAC. These
two big players had shown a willingness to use highly competitive pricing to maintain dominance. As
fresh competition entered the market, both AIS and DTAC were been able to sustain the growth in their
respective subscriber bases on the back of aggressive and innovative marketing.

The Thai mobile market consists of five major players, with three of these having foreign partners.

Exhibit 10 – Major mobile operators and foreign shareholders – 2010

In the context of a highly competitive mobile market, the CAT concessions issued to operators
continued to be a matter of contention. With the operators paying CAT different percentages of their
revenue and with market leader, AIS, which obtained its licence from TOT, not having to pay access
charges, this issue was not going to go away. The government was proposing to replace the concession
payments with a new tax regime for the telecom sector. Such a move would at least address the
financial side of the concession debate.

10.4 REGULATORY DEVELOPMENTS

10.4.1 Mobile Number Portability (MNP)

Regulations covering MNP came into force in Thailand in August 2009. However, by late in that year
it was not clear when mobile subscribers would be able to port their numbers as operators were not
ready to implement the service. In August 2010 operators declared that they were ready to begin MNP
testing in the following month. The Clearing House for Number Portability (CHNMP), a joint venture
of five mobile operators – AIS, DTAC, True, CAT and TOT – said commercial MNP services could be
fully up and running by December 2010, an estimate based on a typical testing period of four months in
other countries.

Then, in September 2010, the NTC said it would start imposing daily fines on AIS, DTAC, True Move,
CAT and TOT because the commercial MNP system had not been launched. The operators said they
would take the matter to court if the NTC fined them. However the fines did commence and in due
course the operators lodged an appeal. In the meantime the CHNMP selected Telcordia to provide
MNP services in addition to a number lookup system. Telcordia would also provide a resolution system
that received telephone number requests and returned call routing instructions. The resolution system
was designed to support protocols including SOAP and ENUM, making Telcordia the first provider of
core network ENUM services in Thailand.

The operators confirmed in November 2010 that they would be able to launch an MNP service before
the end of the year, but limited to the capital city, Bangkok. The service would be available only in
some service centres of the telecom operators. Therefore, during the initial phase, those in the
provinces who wanted to keep their mobile-phone numbers when they switched networks would have
to travel to Bangkok to ask for the service. Telecom operators would gradually expand the MNP
service nationwide. End users would be able to port a number for a fee of THB99 (US$3.25).
MNP was launched successfully in a pilot stage in Bangkok in December 2010. However, portings
were initially limited to just 500 numbers per day at 25 designated service locations in the city. Each of
five operators limited MNP to 100 customers per day.

Later in December the CHMNP reported that the dominance of prepaid mobile services in Thailand
was limiting the impact of the newly implemented MNP arrangements. According to the clearing
house, just 2,400 customers applied to change networks under the MNP scheme in the first ten days of
operation. Over 50% of the 2,400 MNP requests were from postpaid subscribers, even though postpaid
subscribers constitute less than 10% of the total mobile subscriber base.

10.4.2 Mobile Virtual Network Operator (MVNO)

In 2008 CAT Telecom moved to adopt the MVNO business model to improve its competitiveness after
the concessions it had granted to DTAC and True Move expired. The DTAC concession was set to end
in 2018 and True Move’s in 2014. CAT has been relying heavily on revenue-sharing payments from
mobile operators with these payments accounting for 55% of CAT’s total revenue. CAT used to have a
monopoly on international calls but new technologies have made the business far less lucrative.

According to the Ministry of Information and Communications Technology (MICT), which was
actively encouraging this strategy, under the MVNO model, CAT would form alliances with DTAC
and True Move to provide mobile services. CAT would negotiate with DTAC and True Move to rent
the mobile network. A joint-venture company would be set up with CAT acting as the MVNO and the
private operators acting as marketers. The model would be attractive to both DTAC and True Move
because it would be cheaper than applying for new licences or investing in new networks.

To ensure operators remained competitive, the NTC drafted regulations for licensing MVNOs in 2009.

By late 2010 the NTC, despite what had become a difficult environment to regulate, was moving ahead
with the licensing of MVNOs. It had received applications from seven operators for licences to offer
3G services as MVNOs using TOT’s network. There was clearly an interest in these licences despite
the uncertainty of the proposed frequency allocation law regarding MVNOs. The NTC licence would
allow the licensee to lease airtime and the networks of telecom operators to provide retail services. A
clause in the proposed Frequency Allocation law required holders of licences from the planned
National Broadcasting and Telecommunications Commission (NBTC) to offer services in their own
right. They would not be allowed to let other companies manage a part or the all of their spectrum.

In the meantime, AIS was asking TOT for permission to provide a 3G service on TOT’s existing
2.1GHz 3G network in Greater Bangkok; TrueMove had also approached TOT for a similar MVNO
deal but TOT had decided to talk with AIS, its own concession holder, first.

10.4.2.1 Loxley’s MVNO service
In October 2010 Loxley, one of the five MVNOs providing 3G services over TOT’s High-Speed
Packet Access (HSPA) network in Bangkok, announced a plan to become a full MVNO with an
expanded range of operations via a proposed deal with Mobile Partners Group which would see the
UK-based firm take up to a 30% stake in a new Thai-UK joint venture. The move was prompted by
TOT receiving state approval for a plan to expand its 3G network nationwide. Loxley said it would
offer fully integrated services from marketing, management, billing and after-sales services to customer
relationship management.

In the proposed scheme, Mobile Partners Group would take responsibility for virtual backup office
management systems including billing, call centres, front office, customer services and customer
relationship management, and would also serve as an application service provider. Loxley, meanwhile,
would handle marketing and management.

Loxley said that by late 2010 it had approximately 10,000 customers, ‘the break-even point’ (although
way below its allowed capacity of 100,000), and expected to have a total of 15,000 customers in 2011,
targeting tourists and heavy data users in the transport sector, insurance, couriers and mobile closedcircuit
television users. At the time Loxley said that it expected to earn THB100 million (US$3.25
million) in revenue from the MVNO business in 2010, increasing to THB150 million in 2011.

10.4.2.2 AirAsia
In early 2011 Malaysian low-cost airline AirAsia entered the MVNO market segment in Thailand by
establishing a joint venture company to provide 3G services over TOT’s network. It set up the service
under the Tune Talk banner. AirAsia owns a 49% stake in Tune Talk Thailand Co, which plans to
immediately start providing mobile broadband services in Bangkok. The company said it was aiming
for one million customers by 2012.

See chapter 10.5.5.4, page 90 for more information on TOT and the MVNO market in Thailand.
10.4.3 Interconnection arrangements

Interconnection has proved to be yet another contentious area within the Thai mobile market.
Arrangements between Thai telcos underwent considerable changes during 2006 and 2007. The three
major mobile operators sought to implement a new interconnection deal after the NTC and MICT
undertook reforms to the legislation governing the interconnection system. The main challenge to
implementing the new system had been the opposition mounted by TOT. The government-owned
operator wanted to delay implementation because it stood to lose revenue.

TOT’s opposition became a full scale dispute when DTAC and True Move ceased paying network
connections fees and TOT responded by disabling calls from its fixed-line networks. After court action
and high level government intervention, the MICT directed all mobile operators to reach new fee
arrangements with their concession owners, stating the government expected a rate of 30% to apply to
each mobile operator. However this did not solve the problem and the operators continued to push for a
different solution.

In August 2010 TOT agreed to allow AIS customers to roam on its 3G network for data services in
exchange for voice roaming by its customers on the AIS nationwide 2G network. TOT said it would
allow 50,000 AIS mobile numbers to roam on TOT’s 3G network for data services, while AIS would
let 200,000 TOT mobile numbers access its voice services on its nationwide 2G network. The roaming
service was to be on a six-month trial basis. During the trial period, TOT would conduct detailed
technical testing to determine whether the roaming affected customers of its MVNOs. TOT would
charge a roaming fee of 10 satang a MB, the same as for other MVNOs.

10.4.4 National security
The government announced regulations were being introduced requiring anyone buying a mobile phone
SIM card to show their ID or passport for official records. The new regulation took effect in 2005. The
MICT made the announcement after a meeting with local mobile phone service providers. Under the
regulations, mobile phone service companies would also be required to register all holders of SIM
cards purchased before the date of the regulation. The regulation was part of the government’s
measures to curb insurgent activities in Thailand’s southern border provinces. Insurgents in the region
had frequently triggered bomb blasts using mobile phones. In the meantime, SIM card businesses in the
country’s southern border region had started asking their customers for their IDs. The implementation
of this legislation did not appear to have any negative impact on the prepaid market.

10.5 MOBILE TECHNOLOGIES

The dominant mobile technology platform has for a long time been GSM. Whilst CDMA has also had a
presence in the market, it has never really challenged the GSM dominance. By 2011 it appeared that
CDMA’s limited market presence was likely to disappear.

10.5.1 CDMA

In what was a major setback for the CDMA technology in Thailand by early 2008 CAT Telecom was
preparing to abandon its CDMA platform and migrate to GSM. The company had reportedly held talks
with mobile partner Hutchison and with the two operators holding CAT concessions, DTAC and True
Move, and all agreed that CAT should switch to GSM. CAT had been providing the Hutch CDMA
service in 25 central provinces including Bangkok in a joint venture with Hutchison under the CAT
Wireless Multimedia brand. By that time, the service had managed to attract only about 700,000
customers in a mobile market of 54 million. The CAT CDMA service was continuing to operate in
2009 and had around 300,000 subscribers by mid-year.

10.5.2 PCT service

True Move operates a small PCT network in Bangkok. The service was launched in 2000. For details
of this network, see chapter 5.2.3.5.5, page 35.

10.5.3 General Packet Radio Service (GPRS)

The major Thai mobile operators began offering GPRS services in 2001.

10.5.3.1 AIS
After running a pilot GPRS service during 2001, AIS launched GPRS in major cities throughout the
country. The operator then signed with Siemens in 2004 to expand its national GPRS network in a deal
worth around US$30 million. Siemens initially upgraded the AIS GPRS network in Chonburi, Pattaya,
Nakornratchasrima and Khon Kaen, followed by an expansion across the whole of the country.
In 2008 AIS, in partnership with broadcaster 99.5 Advance Radio, launched a live interactive radio and
video streaming service for its mobile handset users. The new ‘Radio TV’ service enabled users to
listen music on 99.5 FM while watching music videos, disc jockeys, mobile advertising and radio spots
via GPRS-enabled handsets.

10.5.3.2 DTAC
DTAC started running pilot GPRS service in 2001. It launched a commercial GPRS service nationwide
in the same year. The service offered data speeds of up to 40Kb/s. The network had been supplied to
DTAC by Nokia as part of its full GSM installation.

10.5.3.3 True
True, then operating as TA Orange, launched a limited coverage GPRS network in 2001, offering
transmission speeds of 115Kb/s. It had 250,000 subscribers on its GPRS network by 2004. The
company subsequently rolled out a nationwide GPRS network in 2005.

True Move introduced a series of mobile internet convergence packages in 2008 by integrating fixed
broadband WiFi access on mobile handsets with GPRS/EDGE data services. The new packages were to
give True Move prepaid and postpaid customers unlimited national internet access through WiFi,
EDGE and GPRS for THB450 (US$13.60) per month or THB20 a day, with an option for postpaid
subscribers to add unlimited voice calls and other online services for THB299 per month.

10.5.4 Enhanced Data for GSM Evolution (EDGE)

10.5.4.1 AIS
AIS claimed it was the first operator in Southeast Asia to install and offer EDGE technology-based
services when it launched its service in 2002. By 2004 the operator had installed EDGE in 300 of its
9,000 base stations. But the company said it was not rushing to deploy EDGE at all base stations
because it was still assessing what technology it would use in the longer term.

The operator signed a US$22 million agreement with Nokia in 2004 for an expansion of its
GSM/EDGE network in the Northern, Western and Southern regions of the country. As a result of the
expansion, AIS was positioning itself to support EDGE when more compatible handsets become
commercially available. AIS also contracted Ericsson in 2004 to provide the second phase of its EDGE
expansion into the Bangkok metropolitan area.

10.5.4.2 DTAC
DTAC and Nokia successfully completed its first EDGE call in Thailand in 2003. The EDGE call was
part of the first phase of an EDGE trial. Nokia had supplied DTAC with a complete GSM system,
including the EDGE capability.

In preparation for 3G, DTAC began expanding its EDGE network in 2006. The proposed EDGE rollout
was intended to equip DTAC with a better understanding about consumers’ data-usage behaviour.
DTAC wanted experience in data services to prepare for the long-anticipated introduction of 3G.

10.5.4.3 True
True Move contracted Alcatel-Lucent in 2008 to expand its EDGE coverage in Bangkok and the
Central-West, South and North regions of Thailand. In the meantime DTAC began taking delivery of
1,500 ‘Flexi’ EDGE base stations from Nokia Siemens Networks. The Flexi system was designed to
minimise the number of cell sites required and reduce operating costs and environmental impact by
enabling operators to deploy software to optimise radio access and removing the need for air
conditioning at the sites.

10.5.5 Third Generation (3G) mobile

10.5.5.1 Analysis: Thailand struggles to put 3G in place – January 2011
Thailand’s effort to introduce 3G mobile services has been beset by a series of administrative
difficulties that have caused painful delays. In September 2010 the country’s Supreme Court upheld an
injunction handed down by a lower court that had earlier frozen the process of awarding 3G licences.
The original injunction had been sought by the two state-owned operators – TOT and CAT. These two
operators strongly oppose the 3G licensing because it will dramatically change the way the private
operators pay fees to the government operators.

The restructuring of these concession fees is a fundamental – and necessary - part of the country’s
planned reform of the telecommunications sector. In the meantime, national pride has become a major
issue. With the relatively smaller neighbouring economies of Laos and Cambodia both having launched
3G services some time back and another growing regional economy Vietnam now powering ahead with
its telecom sector, Thailand is simply being left behind.

The delays in the licensing of 3G services are just another set of hiccups in a long series of delays that
have dogged the telecom industry in Thailand for more than a decade. Thailand is being increasingly
seen by foreign investors as a risky market with a high level of uncertainty. The inevitable question is
who is regulating the telecom industry? Technically speaking it is the National Telecommunications
Commission (NTC). But the NTC has become a real lame-duck authority with the government moving
to establish a new regulatory authority that will, among other things, takeover the responsibilities of the
NTC. The new authority, the proposed National Broadcasting and Telecommunications Commission
(NBTC) has been ‘on the drawing board’ for a long time. It looks like finally coming to fruition.

Meanwhile the NTC is continuing to try and play its role as a regulator and to keep things moving.
However, it has encountered yet another licensing problem; having issued in 2009 five Mobile Virtual
Network Operator (MVNO) licences to work off TOT’s 3G network, the validity of these licences has
been questioned following the recent legislative approval of the Frequency Allocation Act. The act says
that a radio frequency licence is an exclusive right and the licensee must use the frequency to operate a
business itself.

So with the industry becoming increasingly anxious about the lack of decisiveness and clarity in the
regulatory area, the government has been trying to assure stakeholders that all is well. The Prime
Minister Mr Abhisit Vejjajiva has said that the government is moving quickly to put the NBTC in place
and get it operational. However, a somewhat cumbersome administrative course must be charted before
this task is completed. For example, the selection of the NBTC board members needs to be carried out
(within 180 days). Once operational, the NBTC’s first job will be to draft a master plan covering the
allocation of national radio frequencies. That task and a number of other start-up requirements will no
doubt take a little time. It is hard to see the NBTC sorting out these matters much before the end of
2011. When will the long-awaited 3G licences be issued?

10.5.5.2 3G licensing: progress in 2010
Into 2010 the NTC continued in its efforts to award the 3G licences, having already been trying to
award these licences for the past couple of years. However, the political situation continued to make it
difficult.

In March 2010 the lower house approved a draft bill that was to create the 11-member National
Broadcasting and Telecommunications Commission (NBTC) that was set to replace the NTC.
Although starting to look like a ‘lame duck’ regulator, in April 2010 the NTC outlined plans to offer
licences in the 2.3Ghz band, despite this space already being occupied by TOT and CAT along with the
military. A plan was to be worked out to reclaim the spectrum from the occupants.

In June 2010 the NTC published yet another 3G plan – the NTC’s third 3G Information Memorandum
– this time proposing to auction three licences rather than four and beginning in late August. By August
2010 a total of 14 companies had indicated their intention to bid for 3G licences. A total of eight
companies finally bought bid documents.

In the meantime, Thailand’s Administrative Court rejected a legal challenge to the right of the NTC to
issue 3G licences.

The issue of foreign ‘domination’ of the local telcom industry was still simmering away in the lead up
to the auction. The regulator ruled that both AIS and DTAC qualified for the 3G licence auction, even
though both companies had foreign strategic partners. The key issue was that foreigners were
prohibited from holding, both directly and indirectly, more than 49% in local telecom companies to
comply with the Thai Telecommunication Act.

In August 2010 AIS, True Move and DTAC all submitted bidding papers for the 3G auction; one
bidder was disqualified after it failed to tender the bank guaranteed deposit; Samart I-Mobile
abandoned its plans to enter the auction, instead focusing on its MVNO operations with TOT. The
remaining two potential bidders, Loxley and Jasmine International, did not submit bid proposals.
The NTC duly declared that the three operators submitting the only bids for the scheduled 2100MHz
3G licence auction – AIS, DTAC and True Move – were qualified to enter the contest. However, TOT
and CAT Telecom continued their efforts to block the auction, with CAT taking action through the
courts. The Central Administrative Court upheld CAT Telecom plea seeking an injunction just days
before the auction was scheduled to start. TOT also filed a complaint against the NTC claiming that the
regulator lacked the authority to award the necessary radio spectrum.

In imposing the injunction the court decided that the bidding, if allowed to proceed, could cause an
obstacle to the performance of the NBTC, which was set to be established in the near future. The NTC
promptly filed an appeal against the rulings. The Supreme Administrative Court subsequently upheld
the order preventing the NTC from conducting the 3G auction.

With it looking more and more likely that the establishment of NTC’s replacement, the NBTC, was
required for a successful 3G licensing process, the government moved to fast-track the bill to establish
the NBTC.

By November 2010 a joint parliamentary committee had completed its review of the Frequency
Allocation Bill which was designed to establish the NBTC. Then in December the House of
Representatives approved the NBTC plan. Finally, the Senate passed the Frequency Allocation Bill.
The NBTC was to have 11 members. The selection process for the commissioners was required to be
completed by the Senate within 180 days of the bill being published in the Royal Gazette. It was noted
that the NBTC’s first job would be to draft a master plan for the management of national radio
frequencies.

10.5.5.3 3G licensing: progress in 2011
In March 2011 the provisional NBTC, which was still operating without a board, announced that it was
likely to hold a 3G licence auction around the end of the year. In the meantime, while 3G spectrum
licensing remains in limbo, all key mobile phone operators have been turning to HSPA technology to
facilitate 3G services by upgrading the 850-900MHz frequency ranges that they had previously used
for 2G services.

10.5.5.4 TOT’s MVNO strategy
TOT’s strategy for entering the 3G market was to build a network and lease capacity to operators
seeking to be 3G MVNOs.

By November 2009 TOT had installed a total of 548 base stations for its 3G capability and two of five
MVNOs that it had signed up were about to launch their respective services. TOT began offering
services on its 3G network the following month, covering only the Greater Bangkok area.

In November 2010 seven operators applied for licences to offer 3G services using TOT’s network. This
indicated significant interest despite the uncertainty of the proposed frequency allocation law regarding
MVNOs. The NTC had indicated that it was set to consider the applications for an MVNO licence. A
clause in the upcoming Frequency Allocation law required holders of licences from the planned NBTC
to offer services in their own right. They would not be allowed to let other companies manage a part or
all of their spectrum.

TOT’s total investment budget of THB20 billion for the 3G network project had been approved by
cabinet in September 2010 following the court injunction freezing NTC’s planned auction of licences
to private operators for the 2.1GHz spectrum for 3G mobile services.

In December 2010 TOT slightly delayed the start of its e-auction process for THB17.44 billion
(US$580 million) worth of equipment and installation contracts for its 3G network.

In January 2011 a consortium led by domestically-based technology provider Samart Corporation won
TOT’s auction for a nationwide 3G mobile network expansion project. The e-auction went ahead after
the Administrative Court rejected Ericsson’s petition to halt the bidding after it claimed its bid was
unfairly rejected at an earlier stage. The SL consortium of Samart, fellow Thai group Loxley, Nokia
Siemens Networks and Huawei Technologies won the auction with a minimum bid of THB16.3 billion
(US$529 million). The AU consortium of Advanced Information Technology, Alcatel-Lucent and
United Communications submitted a bid of THB16.77 billion. TOT confirmed that it was undertaking
the project to expand its existing Bangkok HSPA 2100MHz network nationwide and hoped to be able
to launch services in other major provinces in April 2011.

However, following the awarding of the contract to Samart, Loxley, Nokia Siemens Networks and
Huawei Technologies, TOT’s management of the process, prompted complaints that the preliminary
screening for the auction lacked transparency. Ericsson of Sweden and ZTE of China were unhappy
that they had been prohibited from entering the final stage of the auction. In February 2011 Thailand’s
Office of the Auditor-General announced that it was considering whether the process violated the Trade
Competition Act.

10.5.5.4.1 AIS/TOT
By 2008 TOT and AIS were close to forming a strategic partnership with a view to jointly developing a
3G service. According to TOT, the cooperation with AIS could include the development of a 3G
platform without overlapping with the BTO mobile phone concession held by AIS under which the
mobile operator was paying 30% of its postpaid revenue and 20% of its prepaid turnover to TOT. The
proposed cooperation could also include a fixed-wireless convergence application based on existing
networks.

However, reports were emerging that the proposal by AIS and TOT to collaborate on 3G services was
looking likely to collapse because it could violate the existing concession deal between two.
AIS finally announced that it had brokered a deal with TOT to upgrade existing networks and move
forward with 3G services. TOT said it expected the first application for voice services would be based
on a fixed-mobile convergence (FMC) platform, with data and multimedia services following. The
alliance said it would upgrade the networks to 3G using the existing 900MHz and 2100MHz frequency
spectrum, and that this was decided because no government agency was in a position to allocate new
frequencies. TOT approved an upgrade project for its 500 base stations in Bangkok in 2009.

10.5.6 LTE

10.5.6.1 Development
TOT announced in May 2010 that it was considering dropping its plans for the long-delayed 3G
licences and moving straight ahead to LTE/WiMAX licences. The government had indicated plans to
hold an auction to issue three licences for what was referred to as ‘3.9 Generation’ (3.9G) mobile
services. The prospect if this happening at an early stage was unlikely, however, given the problems
and delays being encountered by the regulator in arranging the auction of 3G licences.

In March 2011 DPC, a subsidiary of AIS, asked permission from concession issuer CAT to trial LTE
on the 1800MHz frequency band. DPC planned to test equipment supplied by Huawei, ZTE and
Ericsson. The trial, if approved, was expected to run for three months across seven or eight base
stations in Bangkok. AIS was understood to be exploring LTE as a means of combating rival True’s
plan to offer nationwide HSPA services through an arrangement with CAT. The court-ordered
suspension of the 2100MHz 3G auction in 2010 has seen Thailand’s private operators trying to find
alternative means of developing their data service capability.

10.6 MOBILE VOICE SERVICES

10.6.1 Prepaid

When initially launched in 1999, prepaid mobile services took off slowly. This was not so much due to
market conditions as to operators not actively seeking subscribers. As the nation’s mobile operators did
not receive revenue share from fixed-line operators, they were less than keen to have low-end
subscribers who made few outgoing calls tie up network resources. Unreasonably high handset costs
also served to reduce the adoption of prepaid.

With fixed-line telephone penetration remaining relatively low (around 11% by 2010), prepaid mobile
services have become an attractive option for providing the primary means for the wider community to
access telecom services. Not surprisingly, as with other Asian markets, once the initial resistance was
overcome, Thailand’s prepaid mobile services began to take the market by storm.
Differing from the Australian, European and American introduction of prepaid services, Thailand’s
introduction was not an attempt to grow penetration in a saturated market; it was an effort to bring
telecommunications to a population that had no credit history. AIS and DTAC also looked to prepaid
services to help reduce the level of bad debt.

In the meantime, with prepaid accruing a lower ARPU, operators were introducing value-added
services tailored to prepaid subscribers in an effort to lift customer spending. Although ARPU may be
lower with prepaid, a premium was charged on a per-minute basis for airtime, operational costs were
reduced and bad debt was eliminated. It therefore could be argued that a percentage of prepaid
subscribers were essential in any subscriber database. Prepaid services also help telcos to target
segments such as students and not-so-credit-worthy individuals.

Table 65 – Mobile subscribers – prepaid and postpaid – 2006 - 2010

10.7 MOBILE DATA SERVICES

10.7.1 Overview

The use of mobile wireless devices to access the internet has been available in Thailand for some
considerable time, with data services on offer being characterised by very slow speeds. Service
capabilities have steadily improved over time, however. AIS began offering internet access to its
subscribers as far back as 2000. The product was a combination of the AIS GSM network and the
internet service offered by CS Communications. AIS subscribers could access the internet for the cost
of a mobile call. The speed of this service was limited to 9.6Kb/s, however.

In practical terms, non-voice servies in Thailand have been dominated by the Short Message Service
(SMS) offerings from the operators. Other forms of data service have been introduced in various forms
but have not gained any significant foothold in the market.

10.7.2 Short Message Service (SMS)

The major mobile operators in Thailand all launched SMS services at an early stage in the development
of their respective mobile networks. The offerings have varied from operator to operator, but for all of
them the service was a key element in their mobile data segments.

Whilst still very much part of a competitive market, AIS, DTAC and True Move announced in 2008
that they would jointly introduce a ‘smart pool mobile number’ system to allow their customers to
block unwanted and junk SMS messages. The three operators announced the launch of their joint
system to block spam SMS messages in August 2009. The operators had jointly invested THB30
million on the system.

10.7.3 Multimedia Message Service (MMS)

As with most markets around the world MMS has not been playing a significant role as a mobile data
service in the Thai market. However, the country’s two big mobile operators in particular have both
developed MMS services and made significant efforts to promote their respective offerings.
In an effort to stimulate the market, AIS and DTAC announced in 2004 what was described as an
‘unprecedented’ partnership that would allow their subscribers to exchange MMS messages. The two
operators said they would collaborate with other operators once they started offering MMS. AIS and
DTAC were also collaborating to allow their subscribers to download all forms of content by dialling a
single number.

As an example of the niche-market value of MMS, AIS launched a Japanese language news service in
2009, targeting Japanese expats living in Thailand. Earlier, AIS had been offered the news services
only in Thai and English. The Japanese service offered news from Thailand and Japan as well as traffic
reports via MMS.

10.8 MOBILE CONTENT AND APPLICATIONS

10.8.1 Overview

There has been no shortage of content offerings available to Thai mobile users, much of it either locally
produced or imported and adapted for the local market. Bothe the operators themselves and a large
number of content providers have been busy in this market. One of the major players in content has
been the fringe telco Samart.

Typical of the way offerings were coming online was CAT Telecom contracting South Korean
companies Insprit and Internet Protocol Network in 2008 to provide multimedia content for its
nationwide CDMA2000 mobile service. The vendors were to provide wireless broadband internet and
video streaming services, with content services set to be made available on a trial basis. More than 20
local and international content application companies had approached the carrier with proposals for
content.

AIS teamed up with 99.5 Advance Radio in 2008 to introduce interactive, live radio and video
streaming on mobile phones. The new Radio TV on mobile service enabled users to listen to music
while watching music videos, disc jockeys, mobile advertising and radio spots via GPRS handsets.
It is also noted that online gaming is one of the more popular applications among mobile users in the
Thai market.

10.8.2 Mobile TV

True Corp subsidiary TrueVisions launched subscription TV programs on mobile phones in 2009 under
its Move TV brand. Mobile pay TV was initially made available to True’s broadband internet
subscribers who also signed up to a TrueVisions package. It could be accessed via True’s public WiFi
broadband network. (True had deployed more than 4,000 WiFi hotspots, covering at least 50 provinces
by this stage; it had been offering commercial IPTV services since 2006.)

In February 2011 Thai company IEC announced plans to deploy a mobile TV network throughout
Thailand based on the China Mobile Media Broadcast (CMMB) standard. IEC received permission in
2010 to implement a mobile digital broadcasting television system in partnership with the Thai state
national broadcaster Mass Communication Organisation (MCOT) and China Broadcasting Corporation
(CBC). The network was being installed by USA-based Telairity in partnership with CBC. CBC has
already completed the rollout of a CMMB mobile television service in China. The CMMB standard
was launched in 2006 as an alternative to the European DVB-H standard.

11. FORECASTS

11.1 FORECASTS – FIXED-LINE SUBSCRIBERS

11.1.1 Overview

Responsibility for building Thailand’s telecom infrastructure was initially assigned to the state-owned
TOT. As both an operator and the regulator responsible for national telecommunications, TOT set up
two concessions under BTO contracts for the development of fixed-line networks. TelecomAsia was
given the development of the BMA and TT&T was awarded a contract for all provinces outside the
BMA.

After completing the respective network builds by September 1996 both TelecomAsia and TT&T
transferred their completed networks to TOT and began the ‘operate’ term of their respective BTO
concessions.

The strategy was not without its problems, however; TelecomAsia and TT&T were required to build
out their entire networks at one time rather than a phased-build based upon user demands. This led to
high up-front expenditure in the early years for the concessionaires and made for a difficult business
model, with a focus on earning revenue at the expense of providing service.

While demand for fixed-line services seemed to have levelled off, at least for the time being, it is
nonetheless significant that the International Telecommunication Union (ITU) has continued to report
high waiting list numbers for fixed services in Thailand (479,000 in 2004, 220,000 in 2007). It is
possible that there is an underlying demand for fixed lines that has to some extent been masked by the
buoyant mobile phone market over the last five or so years. The other potential driver is the significant
upturn broadband internet demand evident in 2007/08, which in turn could be expected to put extra
demand on the copper network because of the country’s heavy dependence to this stage on (DSL as its
broadband delivery platform.

In any event, Thailand must continue to build its national infrastructure. With a telecom regulator, the
NTC, in place, we can certainly expect to see more attention being given to the infrastructure side of
the market and the operators involved in it.

11.1.2 Forecasts – fixed lines – 2007 - 2008; 2013; 2018

The forecast growth in fixed-line services is presented in the tables below:

Table 66 – Forecast fixed-line subscribers and penetration rate – 2007 - 2008; 2013; 2018

While the national economy remains weak, the actual growth is most likely to fit the lower growth
forecast. This is despite an expectation that the regulator will at some stage in the future act decisively
in negotiating and renegotiating operator concessions that are more favourable to operators willing to
build fixed-line networks.

Early signs in this regard have been contradictory, to say the least. It was true that the 2006 political
crisis in Thailand, which saw Thaksin Shinawatra’s government overthrown in a military coup, had a
big impact on the telecom sector as it removed Shinawatra’s heavy personal influence on the sector
disappearing.

However, the expectation that a more progressive regulatory regime would come into play was not
immediately realised. While some changes are being transacted and others are likely, at times there
have been signs of a regressive approach to policy. Nevertheless, there remains a hope that the building
of national infrastructure will be a priority and this could still provide a potential boost to the fixed-line
segment of the market.

Whether the market trends to the higher or lower forecast will depend on:
 telecom regulator adopting forceful influential role;
 government providing strong support for the regulator;
 importance placed on fixed-line infrastructure by regulator;
 importance placed on fixed-line infrastructure by operators;
 level of funding directed to fixed-line segment;
 wider adoption of new technologies to extend fixed network coverage.

11.2 FORECASTS – INTERNET SUBSCRIBERS

11.2.1 Overview

Thailand has a reasonably healthy internet market with 20 ISPs competing vigorously to expand their
respective subscriber bases. There are an estimated 12 million internet users in the country.
However, it is surprising to find that internet continues to be mainly accessed via dial-up services,
which in turn depends on the fixed-line network. In many areas the quality of the connection is poor,
consequently degrading the internet service.

It is also surprising that it has taken so long for the push to broadband services in Thailand to occur.
This has finally been changing. With some leadership shown by at least one of the ISPs, True Online
(formerly Asia Infonet), an aggressive rollout of a broadband services has been taking place, starting in
Bangkok in early 2004. The lead role taken by True was prompting other providers to look at their
broadband offerings.

However by end-2008, the number of internet subscribers using broadband services in Thailand was
still relatively small. Broadband penetration was about 2.5% and broadband was only around 25% of
the total internet subscriber base (It is noted that accurate up to date figures on the internet are hard to
obtain). Finally, though, it can be said that broadband is starting to have a major impact on the overall
development of the internet market.

Thailand is expected to benefit from a further general freeing up of the regulations governing ISPs in
the country. Regulatory change should be in the offing now that the new telecom regulator is more
firmly established. Among the changes mooted, the ISPs will become independent of the
Communications Authority of Thailand (CAT) which previously held a shareholding in every ISP. This
in turn is expected to permit greater commercial freedom. Providers will also be able to establish their
own internet gateways, subject to licensing conditions, and there will be significantly increased
competition in the internet gateway market.

11.2.2 Forecasts – internet subscribers – 2007 - 2008; 2013; 2018

The forecast growth in internet is presented in the tables below:

Note: The forecasts below are expressed in terms of the total number of subscribers. We have chosen
this indicator as internet subscribers are usually more accurately measured than internet users.

Table 67 – Forecast internet subscribers and penetration rate – 2007 - 2008; 2013; 2018

Whether internet growth trends to the higher or lower forecast will depend on:
 expansion and general upgrading of the fixed line network;
 regulatory changes to the rules governing licensing of ISPs;
 removal of CAT from its involvement in all ISPs;
 wider application of opening up of the International gateways;
 more general opening up of ISP market;
 development of more broadband access options, including wireless;
 leadership from government on internet.

11.3 FORECASTS – MOBILE SUBSCRIBERS

11.3.1 Overview

Thailand’s mobile market has experienced a long run of strong expansion starting in 2000. There has
been a relative slowing in 2005 as the annual subscriber growth rate eased to about 11%. However,
2006 saw the market bounce back followed by a particularly strong growth year in 2007. Expansion
started to ease in late 2008 and early 2009, as the worsening Thai economy started to drag on the
market.

At the same time, mobile penetration was around 100% and there was again the prospect of a saturating
market. Based on patterns observed in other similar markets, however, there was still room for growth,
but the rate of growth is generally expected to be more modest. The advent of 3G will certainly offer
the operators a new opportunity to attract revenue but, in the short term, may not help in the push to
increase subscriber numbers.

(Some cynics had been suggesting the view that the Thai mobile market has peaked has been confirmed
by the action of the Shinawatra family who exited from ShinCorp – including its giant mobile
subsidiary AIS – with a controversial sale of their shareholding to Singapore’s Temasek in January
2006.)

11.3.2 Forecasts – mobile subscribers – 2007 - 2008; 2013; 2018

The forecast growth in mobile services is presented in the tables below:

Table 68 – Forecast mobile subscribers and penetration rate – 2007 - 2008; 2013; 2018

The actual growth is more likely to favour the higher growth forecast, with the Thai market continuing
to grow steadily and generally consolidating over the coming decade. There will be expansion into
value-added services, especially with the launch of 3G networks, thereby shifting the focus of the
operators away from subscriber growth to revenue growth. While its history of strongly embracing the
mobile phone would suggest that Thailand will move to the high saturation levels of the developed
markets, the shakiness of the Thai economy may ultimately undermine this growth path in the 10 year
period under consideration. Pricing, including the cost of handsets, will remain a big factor in
continued growth.

Whether mobile growth moves towards the higher or lower forecast will largely depend on:
 the recovery from economic downturn and subsequent level of economic growth;
 increased levels of disposable income in the general population;
 further structural changes in mobile market,
 rationalisation of operators;
 commitment by operators to competitive market and pricing;
 impact of higher foreign investment cap on foreign operators;
 action on the privatisation of the two government owned operators (CAT and TOT).

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12. GLOSSARY OF ABBREVIATIONS

2G Second Generation
3DES Triple Data Encryption Standard
3G Third Generation
3GPP 3rd Generation Partnership Project
4G Fourth Generation
AAC Advanced Audio Codec
AAIREP Australian Advanced Internet Research and Education Program
AAS Adaptive Antennae Systems
ABA Australian Broadcasting Authority
ABCB Australian Broadcasting Control Board
ABN-DSC Australian Business Number-Digital Signature Certificate
ABR Available Bit Rate
ABG Australian Broadband Guarantee
ACA Australian Communications Authority
ACCC Australian Competition and Consumer Commission
ACCI Australian Computing and Communications Institute
ACD Automatic Call Distribution
ACIF Australian Communications Industry Forum
ACMA Australian Communications and Media Authority
ACORN Atlantic Canada Organisation for Research Networking
ACR Alternate Carrier Rerouting
ACR Anonymous Call Rejection
ACRNet Australian Capital Region Network
ACSys Advanced Computational Systems
ADB Asian Development Bank
ADC Automatic Data Capture
ADMA Australian Direct Marketing Association
ADMs Add-Drop Mulitiplexers
ADPCM Adaptive Differential Pulse Code Modulation
ADR American Depository Receipt
ADSI Analogue Display Services Interface
ADSL Asymmetrical Digital Subscriber Line
AEROS Australian Electronic Retail Ordering System
AFE Analogue Front End
A-GPS Assisted Global Positioning System
AIEAC Australian Information Economy Advisory Council
AII Advanced Intelligent Identification
AIIA Australia Information Industry Association
AIM Advanced Intelligent Messaging
AIM Australian Information Media
AIN Advanced Intelligent Network
AIS Advanced Information Services (a GSM operator)
AISI African Information Society Initiative
AITEC Australian Information Technology Engineering Centre
ALI Automatic Location Identification
AM Amplitude Modulation
AMA Automatic Messaging Account
AME Australia Multimedia Enterprise
AMPS Advanced Mobile Phone Service (analogue)
AMR Adaptive Multirate
AMSC American Mobile Satellite Corporation
AN Access Network
ANI Automatic Number Identification
ANM Answer Message
ANSI American National Standards Institute
ANTTS Automatic Network Travel Time System
ANX Automotive Network Exchange
AOA Angle of Arrival
AOL America On Line
AON All Optical Network
AP Access Point
AP Access Provider
AP Application Processor
APAC Australian Partnership for Advanced Computing
APC Automatic Power Control
APCN Asia-Pacific Cable Network
APCO Association Public Safety Communications Officials standard
APEC Asian Pacific Economic Corporation
API Application Programming Interface
APII Asia-Pacific Information Infrastructure
APNA Australian Products Number Association
APOC Advanced Paging Operators Code
APON ATM Passive Optical Network
APS Automatic Protection Switching
APT Asia-Pacific Telecommunity
APTV Associated Press Television
ARCNET Attached Resource Computer Network
ARCOS Americas Region Caribbean Optical-ring System
ARCTour Advanced Radio Communications on Tour
ARDC ACT Region Development Council
ARIB Association of Radio Industries and Businesses (Japan)
ARM Asynchronous Response Mode
ARN Australian Radio Network
ARPA Advanced Research Projects Agency
ARPL Average revenue per line
ARPU Average Revenue per User
ARTS Association for Retail Technology Standards
ASA Advanced Systems Architecture
ASAM ATM Subscriber Access Multiplexer
ASAP Asymmetric Satellite Access Port
ASCII American Standard Code for Information Interchange
ASIC Application Specific Integrated Circuit
ASEAN Association of Southeast Asian Nations
ASP Application Service Provider
ASR Automatic Speech Recognition
ASTRA Australian Subscription Television and Radio Services
ATA American Television Alliance
ATC Australian Telecommunications Council
ATDMA Advanced Time Division Multiple Access
ATF Association for the Television of the Future
ATM Asynchronous Transfer Mode
ATM Automatic Teller Machine
ATN Addicted to Noise
ATP Advanced Technology Program
ATP Analogue Twisted Pair
ATRN African Telecommunication Regulators Network
ATSC Advanced Television Standards Committee
ATU African Telecommunications Union
ATUG Australian Telecommunications Users Group
ATVEF Advanced Television Entertainment Forum
ATVI Australian Television International
AVMMS AudioVisual Multimedia Services
AWS Advanced Wireless Services
AYUTOS As-yet-un-thought-of services
B2B Business-to-Business
B2C Business-to-Consumer
B2E Business-to-Employee
B2G Business-to-Government
BACCS Billing and Customer Care Systems
BAG Broadband Advisory Group (Australia)
BBS Bulletin Board System
BCC Business Cooperation Contracts
BCDF Broadband Content Delivery Forum
BCL Broadcast Communications Ltd
BcN Broadband convergence Network
BCS Basic Carrier Services
BCSM Basic Call State Model
BD Blu-ray, Blu-ray Disc
BDCS Broadband Digital Cross-Connect System
BER Bit-Error-Rate
BGP Border Gateway Protocol
BI Bit rate Independent
BIB British Interactive Broadcasting Limited
BIPT Belgian Institute for Posts and 
Telecommunications
B-ISDN Broadband ISDN
BLC Broadband Loop Carrier
BLEC Broadband Local Exchange Carrier
BLES Broadband Loop Emulation Services
BNS Business Network Services
BoD Broadcast on Demand
BOSS Broadband Operating System Software
BOT Broadcast Online TV
BOT Build-Operate-Transfer
BPL Broadband over Powerline
BPON Broadband Passive Optical Network
BRAN Broadband Radio Access Networks
B-RAS Broadband-Remote Access Server
BREW Binary Runtime Environment for Wireless
BRI Basic Rate Interface
BR-ISDN Basic Rate ISDN
BSA Broadcasting Services Act
BSA Broadcasting Standards Authority (New
Zealand)
BSC Base Station Controller
BSEG Broadband Services Expert Group
BSP Billing Service Provider
BSP Broadband Service Provider
BTCE Bureau of Transport and Communications
Economics
BTO Build-Transfer-Operate
BTS Base Transceiver Station
BTV Business Television
BW Bandwidth
BWA Broadband Wireless Access
B-WLL Broadband Wireless Local Loop
C&W Cable & Wireless
C2C City-to-City
CACM Central American Common Market
CAD Computer Assisted Design
CAGR Cumulative Annual Growth Rate
CAI Common Air Interface
CAIP Canadian Association of Internet Providers
CAMEL Customised Application of Mobile Enhanced
Logic
CAMRI Computer Assisted Meter Reading Interface
CAN Customer Access Network
CANTO Caribbean Association of National
Telecommunication Organizations
CAP Carrier-less Amplitude/Phase modulation
CAP Corporate Alliance Program
CAPEX capital expenditure
CAPs Competitive Access Providers
CAR Committed Access Rate
CARIN Car Information and Navigation
CASE Computer Aided Software Engineering
CASPs Communications Access Service Providers
CASS Conditional Access SubSystem
CAT Chip Application Technology
CATS Consortium for Audiographics
Teleconferencing Standard
CATV Cable TV
CAUCE Coalition Against Unsolicited Commercial
Email
CAV Constant Angular Velocity
CBAA Community Broadcasters Association of
Australia
C-band Conventional band
CBDS Connectionless Broadband Data Service
CBR Constant Bit Rate
CBR Content-Based Retrieval
CCA Call Collection Areas
CCC Competitive Carriers’ Coalition (Australia)
CCC Content Creation Centre
CCCS Call Centre Communications Systems
CCE Cooperative Computing Environment
CCF Consumer Consultative Forum
CCIR Comite Consultatif International des Radio
Communications (Radio Consultative
Committee)
CCR Call Charge Record
CCS#7 Common Channel Signalling Number 7
CCTV Closed Circuit TV
CCXML Call Control eXtensible Markup Language
CDC Call Direct Cellular
CDCS Continuous Dynamic Channel Selection
CDD Content Delivery and Distribution
CDDI Copper-Distributed Data Interface
CD-I Compact Disc Interactive
CDMA Code Division Multiple Access
CDMP Cellular Digital Messaging Protocol
CDPD Cellular Digital Packet Data
CDR Call Detail Record
CD-R Compact Disc Recordable
CD-ROM XA Compact Disc Read Only Memory
Extended Architecture
CD-ROM Compact Disc Read Only Memory
CDTV Commodore Dynamic Total Vision
CD-V Compact Disc Video
CDV Compressed Digital Video
CWDM Coarse Wavelength Division Multiplexing
CEDA Committee for Economic Development of
Australia
CEENet Central and Eastern European Networking
Association
CEPS Common Electronic Purse Specifications
CERN European Laboratory for Particle Physics
CERNET China Education and Research Network
CETV Communication Entertainment Television
CGSA Cellular Geographic Serving Area
cHTML Compact Hypertext Markup Language
CIF Cell In Frames
CIF Common Intermediate Format
CIFS Common Internet File System
CIRs Committed Information Rates
CISC Complete Instruction Set Computer
CIT Computer Integrated Telephony
CITA Cook Islands Telecommunications Assets
CLASS Custom Local Area Signalling Service
CLEC Competitive Local Exchange Carrier
CLI Calling Line Identification
CLIP Calling Line Identification Presentation
CLU Customer Line Unit
CLV Constant Linear Velocity
CMC Coherent Multi Channel
CME Capitalised Maintainable Earnings
CMI Cable Microcell Integrator
CMOS Complementary Metal Oxide Semiconductor
CMS Content Management Systems
CMT Commission del Mercado de las
Telecomunicaciones (Spain regulator)
CMT Country Music Television
CMTS Cable Modem Termination System
CND Calling Number Display
CNN Cable News Network (USA)
CNNI Cable News Network International (USA)
CNNIC China Internet Network Information Centre
CO Cable Operator
CO Central Office
COAG Council of Australian Governments
CODEC Coder Decoder
COFDM Coded Orthogonal Frequency Division
Multiplexing
COINS Corporate Information Superhighway
COMESA Common Market for Eastern and Southern
Africa
COW Call On Wheels
CPAN Customer Premises Area Network
CPE Customer Premises Equipment
CpHC Cost per Home Connected
CpHP Cost per Home Passed
CPP Caller Pays Paging
CPP Calling Party Pays
CPRM Content Protection for Recordable Media
CPS Carrier PreSelection
CPU Central Processing Unit
CRC Cooperative Research Centre
CRC Cyclic Redundancy Check
CRCT Canadian Radio-television and Telecommunications
Committee
CRM Customer Relationship Management
CRS Computer Reservation Systems
CS-1 Capability Set 1
CSA Callpath Services Architecture
CSD Circuit Switched Data
CSG Customer Service Guarantee
CSMA/CD Carrier Sense Multiple Access /
Collision Detection
CSO Community Service Obligations
CSP Carrier Service Provider
CSS Cascading Style Sheets
CST Computer Supported Telephony
CSTA Computer Supported Telecommunications
Applications
CSU Channel Services Unit
CT Cordless Telephone
CTA Card Technology Australia
CTC Scheme Commercial Television Conversion
Scheme
CTI Computer Telephony Integration
CTIA Cellular Telecommunications Industry
Association (USA)
CTS Cable Television Services
CTs Computer Tomograph
CTS Cordless Telecommunications Services
CTV Connect Television
CTW Chong Thai Wireless
CUG Closed User Group
CWDM Coarse Wave Division Multiplexing
CWIX Cable & Wireless Internet Exchange
CYTA Cyprus Telecommunications Authority
DAB Digital Audio Broadcasting
DACS Digital Access Communication Systems
DAMA Demand Assigned Multiple Access
DAMPS Digital Advanced Mobile Phone Service
DARC Data Radio Channel
DART Digital Audio Radio Transfer
DASS2 Digital Access Signalling Services 2
DAVIC Digital Audio Visual Council
DAVID Digital Audio/Video Interactive Decoder
DBA Digital Broadcasting Australia
DBS Direct Broadcasting Services
DBS Digital Broadcast Satellite
DCCH Digital Control Channels
DCF Discounted Cash Flow
DCITA Department of Communications, Information
Technology and the Arts
DCN Data Communications Network
DCP Digital Channel Plan
DCS Digital Crossconnect System
DCTS Digital Cordless Telephone System
DDAS Digital Data Access Service
DDN Dedicated Digital Networks
DDS Digital Data Service
DDT Digital Television Transmission
DECT Digital Enhanced Cordless Telephone
DEIWG Digital Economy Industry Work Group
DF-SDB Deep Fibre Switched Digital Broadband
DGPS Differential Global Positioning System
DGT Directorate General of Telecommunications
DHCP Dynamic Host Configuration Protocol
DigiTAG Digital Terrestrial TV Action Group
DITARD Department of Industry, Technology and
Regional Development
DLD Domestic Long-Distance
DMF Decision Making Framework
DMO Data Mode of Operation
DMT Discrete Multi-Tone
DMV Digi-Media Vision
DNS Domain Name System
DNSO Domain Name Supporting Organisation
DNSP Distribution Network Service Provider
DOC Department of Communications
DOCSIS Data Over Cable System Interface Spectrum
Standard
DPD Digital Package Delivery
DPE Distributed Processing Environment
DPL Digital Power Line
DPNSS Digital Private Network Signalling System
DPSK Differential Phase Shift Keying
DQDB Distributed Queued Dual Bus
DRAC Digital Radio Advisory Committee (Australia)
DRB Digital Radio Broadcasting
DRCS Digital Radio Concentrator System
DRM Digital Rights Management
DRMASS Digital Radio Multiple Access Subscriber
System
DSB Digital Sound Broadcasting
DS-CDMA Direct Sequence CDMA
DSI Digital Speech Interpolation
DSL Digital Subscriber Line
DSLAM Digital Subscriber Line Access Multiplexer
DSM Demand Side Management
DSM-CC Digital Storage Media Command and Control
DSP Data Service Provider
DSP Digital Signal Processing
DSRR Digital Short Radio Range
DSSS Direct Sequence Spread Spectrum
DSU Data Services Unit
DS-UWB Direct Sequence Ultra-Wideband
DSVD Digital Simultaneous Voice and Data
DTH Direct-to-Home
DTMF Dual Tone Modulation Frequency
DTT Digital Terrestrial Transmission
DTT Digital Terrestrial Television Broadcasting
DTTV Digital Terrestrial TV
DTV Digital TV
DVB Digital Video Broadcasting
DVB-C Cable
DVB-H Digital Video Broadcasting-Handheld
DVB-RCS Return Channel Satellite
DVB-S Satellite
DVB-T Terrestrial
DVC Digital Video Compression
DVCC Digital Verification Colour Code
DVD Digital Video Disc
DVI Digital Video Interactive
DVR Digital Video Recorder
DVSP Domestic Voice Service Provider
DWDM Dense Wavelength Division Multiplexing
DWMT Discrete Wavelet Multi-Tone
EAC East African Cooperation
EAP Extendable Authentication Protocol
EBES European Board for EDI Standardisation
EBF Electronic Benefit Funding
EBIT Earnings Before Interest and Tax
EBITA Earnings Before Interest, Taxes, Depreciation
and Amortization
EBN Experimental Broadband Network
EBPP Electronic Bill Presentation and Payment
EBRD European Bank for Reconstruction and
Development
EBSW Electronic Banking Services for Windows
EBU European Broadcasting Union
ECAT E-commerce Action Team (New Zealand)
ECLAC Economic Commission for Latin America and
the Caribbean
ECMA European Computer Manufacturers Association
ECML Electronic Commerce Modelling Language
ECR Electronic Cash Register
EC European Commission
ECTA European Competitive Telecommunications
Association
ECTEL Eastern Caribbean Telecommunications
Authority
ECU European Currency Unit
ED Electronic Directory
EDFA Erbium-Doped Fibre Amplifier
EDGE Enhanced Data for GSM Evolution
EDI Electronic Data Interchange
EDI Electronic Document Interchange
EDIFACT EDI for Administration, Commerce and
Transport
EDTV Enhanced Definition TV
EEET National Telecommunications and Post
Commission (Greece)
EEPROM Electronically Erasable Programmable Read
Only Memory
EFN Enhanced Fax Network
EFR Enhanced Full-Rate (GSM)
EFT Electronic Funds Transfer
EFTNS External Fixed Telecommunications Network
Services
EFTPOS Electronic Funds Transfer Point of Sale
EIA Electrical Industries Association
EIA Electrical Industries Association
EII Electronic Information Interchange
EIS Energy Information Services
EITO European Information Technology Observatory
EIU Economist Intelligence Unit
EMC Electromagnetic Compatibility
EME Electromagnetic Energy
EMEA Europe, the Middle East and Africa
EMI Electromagnetic Interference
EMS Energy Management Services
EMS Enhanced Messaging Service
EMU European Monetary Union
EMV Europay/MasterCard/Visa
ENUM Electronic Numbering
E-OTD Enhanced Observed Time Difference
EoVDSL Ethernet over VDSL
EP Electronic Purse
EPG Electronic Program Guide
EPPA European Public Paging Association
EPROM Erasable Programmable Read Only Memory
ERMES European Radio Messaging System
ERP Enterprise Resource Planning
ERTU Egyptian Radio & TV Union
ESB Electronic Services Business
ESCAP Economic and Social Commission for Asia and
the Pacific
ESCON Enterprise Systems Connection Architecture
ESD Electronic Services Delivery
ESHDSL Extended-rate Single-pair High-speed DSL
E-SIGN Federal Electronic Signatures in Global and
National Commerce Act
ESMR Enhanced Specialised Mobile Radio
ESN Electronic Serial Number
ESTL Electronic Services Ltd
ETA Ethiopian Telecommunications Authority
ETACS Enhanced Total Access Communications
Systems
ETI European TeraFlop Initiative
ETSI European Telecommunications Standards
Institute
ETV Enhanced Television
EU European Union
EVA European Videoconferencing Association
EV-DO Evolution-Data Optimised
EV-DV Evolution-Data/Voice
EVE European Videotelephony Experiment
FACCH Fast Associated Control Channels
FACTS Federation of Australian Commercial
Television Stations
FARB Federation of Australian Radio Broadcasters
FATA Foreign Acquisitions and Takeovers Act 1975
FCC Federal Communications Commission (USA)
FCR France Cable & Radio
FDC First Data Corporation
FDD Frequency Division Duplex
FDDI Fibre Distributed Data Interface
FDM Frequency Division Multiplexing
FDMA Frequency Division Multiple Access
FEC Foreign exchange certificate
FEDI combination EDI with EFT
FFT Fast Fourier Transform
FHSS Frequency Hopping Spread Spectrum
FINTEL Fiji International Telecommunications Limited
FIRB Foreign Investment Review Board
FITL Fibre-in-the-Loop
FLAG Fibre-Optic Link Around the Globe
FLEX Flexible
FLL Fixed Local Loop
FL-LRAIC Forward Looking Long Run
Average Incremental Costs
FMC Facilities Management Centre
FMC Fixed-mobile convergence
FMO Future Mode of Operation
FMV Full Motion Video
FMS Fixed-mobile substitution
FNA Financial Network Associates
FNAL FLAG North Asian Loop
FOC Fibre Optic Cable
FoIP Fax over Internet Protocol
FOMA Freedom Of Mobile Multimedia Access
FOTS Fibre Optic Transmission Service
FPLMTS Future Public Land Mobile
Telecommunications Systems
FPN First Pacific Networks
FPTL Fiji Posts and Telecommunications Ltd
FRAD Frame Relay Access Device
FSA Fibre Serving Area
FSAN Full Service Access Network Group
FSN Full Services Network
FSO Free Space Optical
FTA Free-to-Air
FTAM File Transfer, Access and Management
FTC Federal Trade Commission (USA)
FtM Fixed-to-Mobile
FTNS Fixed Telecommunication Network Services
FTP (ftp) File Transfer Protocol
FTRSI France Telecom Worldwide Networks and
Services
FttB Fibre-to-the-Building
FttC Fibre-to-the-Curb (same meaning as in FTTP –
when this abbreviation is used for Fibre-to-the-
Pole)
FttH Fibre-to-the-Home
FttK Fibre-to-the-Kerb
FttN Fibre-to-the-Neighbourhood/Node
FttP Fibre-to-the-Premises (both home and business)
FUD Fear, Uncertainty, Doubt
FWA Fixed Wireless Access
FWLL Fixed wireless local loop
GATT General Agreement on Tariffs and Trade
Gb/s Gigabits-per-second
GbE Gigabyte Ethernet
GBIN Global Interoperability of Broadband
telecommunication Networks
GCA Global Chipcard Alliance
GCC Gulf Cooperation Council
GDDS General Digital Data Services
GDP Gross Domestic Product
GEO Geostationary Earth Orbit
GEPON Gigabit Ethernet Passive Optical Network
GEM GPON Encapsulation Method
GHG Greenhouse gas emissions
GHz Giga Hertz
GIIC Global Information Infrastructure Commission
GIP Global Internet Project
GIS Geographic Information System
GLONASS Global Orbiting Navigation Satellite
System
GMCF Global Mobile Commerce Forum
GMCIG Global Mobile Commerce Interoperability
Group
GMDSS Global Maritime Distress & Safety Systems
GMPLS Generalized Multi-Protocol Label Switching
GMPCS Global Mobile Personal Communications
Systems
GNS Global Network Services
GNSS Global Navigation Satellite Systems
GOSIP Government OSI Profile
GPON Gigabit PON
GPRS General Packet Radio Service
GPS Global Positioning Systems
GPTS Guangdong Post and Telecommunications
Administration (China)
GRIC Global Reach Internet Consortium
GRN Government Radio Network
GRNC Government Radio Network Contract
GSA Global mobile Suppliers Association
GSM Global System for Mobiles
GSMA GSM Association
GSO Geostationary Satellite
GTA Guam Telephone Authority
gTLDs generic Top Level Domains
GTS Global Telecom Systems Limited
GUA Global University Alliance
GUI Graphical User Interface
HACBSS Homestead and Community Broadcast Satellite
Services
HAN/B-ISDN Highly Advanced National
Broadband ISDN
HBO Home Box Office
HCF Hybrid Coax Fibre
HCMOS Advanced Complimentary Metal Oxide
Semiconductor
HCS Hierarchical Cell Structures
HCSAs High-Cost Serving Areas
HC-SDMA High Capacity Spatial Division
Multiple Access (iBurst)
HD-CIF High Definition Common Image Format
HDMAC High Definition TV according to Multiplexer
Analogue Component
HDML Hand-Held Device Markup Language
HDPC Hybrid Dual Portable Computer
HDSL High bit rate Digital Subscriber Line
HDTV High Definition TV
HEO Highly Elliptical Orbits
HFC Hybrid Fibre Coax
Hi-Ovis Highly Interactive Optical Visual Information
System
HIPERLAN High Performance Radio Local Area
Networks
HIPPI High Performance Parallel Interface
HKISPA Hong Kong ISPs Association
HLS Higher Level Services
HPi High-speed Portable Internet (Korea)
HPON High Power Open Narrowcasting
HSCSD High-Speed Circuit-Switched Data
HSDPA High-Speed Downlink Packet Access
HSDS High-Speed Data System
HSPA High-Speed Packet Access
HSSI High-Speed Serial Interface
HSUPA High-Speed Uplink Packet Access
HTML Hypertext Mark-up Language
HTP Hypertext Transfer Protocol
HTTP Hypertext Transfer Protocol
HTTPS Secure HTTP
H-VoIP Hybrid-Voice over Internet Protocol
HVAC Heating, ventilating and air-conditioning
Hz Hertz
IAHC International Ad Hoc Committee
IAN Integrated Access Node
IANA Internet Assigned Numbers Authority
IAP Internet Access Provider
IASP Internet Access Service Provider
IATM International Asynchronous Transfer Mode
IBA Independent Broadcasting Authority
IBBMM Interactive Broadband Multimedia
IBN Interactive Broadband Networks
IC Integrated Circuit
ICANN Internet Corporation for Assigned Names and
Numbers
ICASA Independent Communications Authority of
South Africa
ICC International Communications Corporation
ICH Internet Content Hosts
ICMP Internet Control Message Protocol
ICO Intermediate Circular Orbit
ICONZ Internet Company of New Zealand
ICP Independent Content Provider
ICP Instituto das Comunicacoes de Portugal
(regulator)
ICP Internet Content Provider
ICT Information & Communications Technology
IDC International Data Corporation
IDD International Direct Dial
IDEN Integrated Dispatched Enhanced Network
IDN Integrated Digital Network
IDRC Canadian International Development Research
Center
IDSL ISDN DSL
ISDN Integrated Services Digital Network
IEEE Institute of Electrical and Electronic Engineers
IETF Internet Engineering Task Force
IFC International Finance Corporation
IfitL Integrated Fibre in the Loop
IFRS International Financial Reporting Standards
IGF International Gateway Facility
IGMP Internet Group Management Protocol
IHG Intelligent Home Gateway
IIC International Institute of Communications
IIG International Internet Gateway
IISR Information and Interactive Services Report
ILD International Long-Distance
ILEC Incumbent Local Exchange Carrier
ILT Institut Luxembourgeois des
Télécommunications
IM Instant Messaging
IMAP4 Internet Message Access Protocol
IMF International Monetary Fund
IMM International Media Management
i-mode Information Mode
IMPS Instant Messaging and Presence Service
IMS IP Multimedia Subsystem
IMSI International Mobile Station Identity
IMT International Mobile Telecommunications
IMT2000 International Mobile Telecommunications 2000
IMTC International Multimedia Teleconferencing
Consortium
IN Intelligent Network
INA Internet Names Australia
INAP Intelligent Networking Application Protocol
INIS International Nuclear Information System
InMarSat International Maritime Satellite Organisation
INMS Industry Number management System
INP Interim Number Portability
INS 1500 Japanese ISDN specification for PRI/BRI
INS Intelligent Network Services
InTelSat International Telecommunications Satellite
IOSM Inter-Operator Short Message
IP Internet Protocol
IPDC Internet Protocol Datacast
IPART Independent Pricing & Regulatory Tribunal
IPEG Interactive Program Experts Group
IPG Interactive program guide
IPLCs International Private Leased Circuits
IPND Integrated Public Number Database
IPO Initial Public Offering
IPoA Internet Protocol-over Asynchronous Transfer
Mode
IPoF IP-over-Fibre
IPoS IP over Satellite
IPPV Impulse-Pay-Per-View
IPT Internet Protocol Telephony
IPTF Information Policy Task Force
IPTV Internet Protocol Television
IPv4 Internet Protocol Version 4
IPv6 Internet Protocol Version 6
IP-VPN IP-Virtual Private Network
IRC Internet Relay Chat
IRCP Interconnection and Related Charges Principles
IRR Internal Rate of Return
IRU Indefeasible Rights of Use
ISAM Intelligent Services Access Manager
ISD International Subscriber Dialing
ISDB Integrated Services Digital Broadcasting
ISDN Integrated Services Digital Network
ISG Internet Services Group
ISM Industrial Scientific Medical
Iso Enet Isochronous Ethernet
ISO International Organization for Standardization
ISOC Internet Society of Australia
ISP Internet Service Provider
ISPANZ Internet Service Providers Association of New
Zealand
ISPCL International Service Providers Class Licence
ISR International Simple Resale
ISRF Internet Screenphone Reference Forum
ISUP Integrated Services User Parts
IT Information Technology
ITO Information Technology Agreement
ITR Institute for Telecommunications Research
ITSEC Information Technology Security Evaluation
Criteria
ITSP Internet Telephony Service Provider
ITU International Telecommunication Union
ITU-R ITU Radiocommunication Sector
ITU-T Standards Committee International
Telecommunication Union
ITV (iTV) Interactive Television
ITVA Interactive Television Australia
ITX International Trunk Exchanges
IVANs International Value-Added Networks
IVC Internet Voice Chat
IVHS Intelligent Vehicle Highway Systems
Ivip Internet Vastly Improved Plumbing
IVPN International Virtual Private Networks
IVR Interactive Voice Response
IXC Incumbent Exchange Carrier
IXP Internet Exchange Point
IXP Internet Exchange Provider
IXRetail International XML Retail Cooperative
IXSP Internet Exchange Service Provider
JAIPA Japan Internet Providers Association
JEMA Japan Electronic Messaging Association
JPEG Joint Picture Experts Group
JTM Job Transfer and Manipulation
KIS Keep it Simple
KSO Kiwi Share Obligation (New Zealand)
KTS Key Telephone System
LADS Laser Airborne Depth Sounder
LAN Local Area Network
LAP Licence Area Plan
LAS Local Access Switch
LASER Light Amplification by Stimulated Emission of
Radiation
LATA Local Access and Transportation Area
LBP Launceston Broadband Plan
LBS Location-Based Services
LCS Local Carriage Service
LD Long Distance
LDAP Lightweight Directory Access Protocol
LEC Local Exchange Carrier
LEO Low Earth Orbit
LLC Local Leased Circuit
LLS line-sharing service
LLU Local Loop Unbundling
LMCS Local Multipoint Communication Systems
LMDS Local Multipoint Distribution Systems
LOS Line-of-Sight
LPS Local Positioning System
LRIC Long Run Incremental Cost
LSI Large-Scale Integration
LSICs Large-Scale Integrated Circuits
LTE Long-term evolution
M2M machine to machine
M&A Merger and Acquisitions
MAC Multiple Analogue Component
MAE Metropolitan Area Exchanges
MAGICNet Mongolia Access to Global
Information and Communications Network
MAN Metro Access Network
MAN Metropolitan Area Network
MAP Managed Application Provider
MAP Multiple Access Portal
MAS Managed Application Services
MASP Mobile Application Service Provider
MB-OFDM MultiBand Orthogonal Frequency
Division Multiplexing
Mb/s Megabits-per-second
MC/MU Multi Cell / Multi User
MCCOI Multimedia Communication Community of
Interest
MCNS Multimedia Cable Network Systems
mCRM mobile Customer Relationship Management
MCS Multipoint Communications Systems
MDF Main Distribution Frame
MDNS Managed Data Network Services
MDRM Mobile Digital Rights Management
MDS Multipoint Distribution Systems
MEMO Multimedia Environment for Mobiles
MEO Medium Earth Orbit
Mercosur Southern Customs Union
MFJ Modified Final Judgement
MFS Metropolitan Fiber Systems (UK)
MHEG-5 Multimedia Hypertext Expert Group
MHP Multimedia Home Platform
MICR Magnetic Ink Character Recognition
MIDI Musical Instrument Digital Interface
MIMD Multiple Instruction Multiple Data
MIME Multipurpose Internet Mail Extensions
MIMO Multiple-Input, Multiple-Output
MIN Mobile Identification Number
MINC Multilingual Internet Names Consortium
MIoD Mobile Info. on Demand
MIRAGE Multidisciplinary Interest in Rural and General
Health Education
MIRC Magnetic Ink Character Recognition
MIRS Motorola Integrated Radio System
MITV Microsoft Interactive TV
MMAC Multimedia Mobile Access Communication
MMCS Multimedia Carrier Switch
MMDS Multichannel Multipoint Distribution Systems
MML Mobile Markup Language
MMOG massively multiplayer online game
MMS Manufacturing Message Specifications
MMS Multimedia Messaging Service
MNO Mobile Network Operator
MNP Mobile Number Portability
MoD Multimedia-on-Demand
MOO MUD Object Oriented
MO-RAN Multi-Operator Radio Access Network
MOT Multimedia Object Transfer
MoU Memorandum of Understanding
MOU Minutes of Use
MPEG Motion Pictures Experts Group
MPLS Multiprotocol Label Switching
MPP Mobile Party Pays
MPP Mobile Proximity Payment
MPT Ministry for Post and Telecommunication
MRS Managed Router Server
MSAF Multimedia Services Affiliate Forum
MSAN Multi-Service Access Node
MSC Mobile Services switching Centre
MSDL MPEG-4 Systems and Description Language
MSFDC Microsoft First Data Corporation
MSN Microsoft Network
MSO Multiple Systems Operator
MSP Multi Services Platform
MSS Mobile Satellite Services
MTA Mobile Telecommunications Africa
MTC Multipurpose Community Telecentre
MTR Mobile Termination Rate
MTS Maori Television Service (New Zealand)
MUD Multi-User Dungeon
MUSE Japanese HDTV standard
MVDS Multipoint Video Distribution Service
MVNE Mobile Virtual Network Enabler
MVNO Mobile Virtual Network Operator
MVPD Multichannel Video Programming Distributor
MVS Managed Voice Services
MW MediaWonderland
N&D Notification & Disallowance
NAD Number Administration Deed (New Zealand)
NADF North American Directory Forum
NAI Network Access Identifier
NAL Network Access Licence (China)
N-AMPS Narrowband Advanced Mobile Phone Service
NAP Network Access Point
NAP Network Applications Platform
NAT Network Address Translation
NBA National Bandwidth Inquiry
NBN National Broadband Network
NBSIG National Broadband Strategy Implementation
Group (Australia)
NCC New Common Carrier (Japan)
N-CDMA Narrowband CDMA
NCSA National Centre for Supercomputing
Applications
NDS News Digital Systems
NEAC National Electronic Authentication Council
NEST Network Embedded Systems Technology
NFS Network File System
NGI Next Generation Internet
NGMN Next Generation Mobile Network
NGN Next Generation Network
NGO Non-Governmental Organisation
NIC Network Interface Card
NIFOTOS North Island Fibre Optic Transmission System
NII National Information Infrastructure
NIIF Network Interworking Industry Forum
NIS The Joint Group on Network and Information
Security
NISC National Information Services Council
N-ISDN Narrowband Integrated Services Digital
Network
NLD National Long-Distance
NLOS Non Line-of-Sight
NMoD Near Movie-on-Demand
NMOS Normal Metal Oxide Semiconductor
NMS Network Management Software
NMT Nordic Mobile Telephone Standard
NNTP Network News Transport Protocol
NOC Network Operations Centre
NOIE National office for the Information Economy
NP Number Portability
NPC National Purchase Corporation
NRA National Regulatory Authorities
NRF New Regulatory Framework
NRIM Network Resource Information Model
NRV Net Realisable Value
NSF National Science Foundation
NSN Nokia Siemens Networks
NSP Network Service Provider
NTA National Transmission Agency
NTIA National Telecommunications and Information
Administration (USA)
NTRC National Telecommunications Regulatory
Commission
NTSC National Television Standards Committee
NTT Nippon Telegraph and Telephone (Japan)
NUSC Net Universal Service Cost
NVoD Near-Video-on-Demand
NZOA New Zealand On Air
NZTBC New Zealand Television Broadcast Council
NZTNAG New Zealand Telephone Numbering Advisory
Group
OA Office Automation
OCA Open Computing Alliance
OIBDA Operating Income before Depreciation and
Amortisation
OCR Optical Character Recognition
OCTV Open Circuit Television
ODA Office Document Architecture
ODIF Office Document Interchange Format
ODN Outback Digital Network
ODP Online Digital Payments
ODP Open Distributed Processing
OECD Organisation for Economic Co-operation and
Development
OECS Organisation of Eastern Caribbean States
OEM Original Equipment Manufacturer
OFC Optical Fibre Cable
Ofcom Office of Communications
OFDM Orthogonal Frequency Division Multiplex
OFDMA OFDM Access
OLTP On-Line Transaction Process
OMG Object Management Group
ONC Open Network Computing
ONT Optical Network Terminal
OOA Object Oriented Analysis
OOP Object Oriented Programming
OPEX Operational Expenditure
OPS Open Profiling Standard
OPS Open Profiling Standard
OPT Office des Postes et Telecommunications
(French Polynesia)
OS Operating System
OSI Open Systems Interconnect
OSP Online Service Provider
OSP Operator Service Provider
OSS Operating Support System
OTA Over the air
OTAC Over the air Customisation
P2P peer-to-peer
PABX Private Automatic Branch Exchange
PACONET Pan African Communications
Network
PACS Patient Archiving and Communications
Systems
PACS Personal Access Communications System
PACT Pacific Area Cooperative Telecommunications
PACTS Public Access Cordless Telecommunications
Services
PAD Program Associated Data
PAL Phase Alternate Line
PAMR Public Analogue Mobile Radio
PAN Personal Area Network
PANAFTEL Pan African Telecommunications
Network
PANGTEL PNG Telecommunications
Authority
PAPL Permitted Attachment Private Line
PAS Personal Access System (China)
PATM Personal Automated Teller Machine
PCMCIA Personal Computer Memory Card International
Association
PCN Personal Communication Network
PCO Public Call Office
PCS Personal Communication System/Services
PCWG Personal Conferencing WorkGroup
PDA Personal Digital Assistant
PDC Personal Digital Cellular (Japan)
PDC Program Delivery Control
PDES Product Data Exchange Standard
PDH Plesiochronous Digital Hierarchy
PDH Plesiochronous Digital Network
PDI Product Data Interchange
PDN Packet Data Network
PDN Public Data Network
PDP Parallel Distributed Processing
PdS Personal dataSpace
PfD Partnership for Development
PGP Pretty Good Privacy
PHS Personal Handy-phone system
PIC Personal Intelligent Communicator
PICC Pre-subscribed Inter-exchange Carrier Charge
PICs Personal Intelligent Communications
PICS Platform for Internet Content Selection
PIN Personal Identification Number
PING Packet InterNet Groper
PKAF Public Key Authentication Framework
PKI Public Key Infrastructure
PLC Power Line Communications
PLMN Public Land Mobile Networks
PMD Prime Media Developments
PMR Private Mobile Radio
PMT Packer-Murdoch-Telstra
PNCC Palau National Communications Corporation
PNETS Public Non-Exclusive Telecommunications
Service
POC Push-To-Talk over Cellular
POCSAG Post Office Standardisation Advisory Group
PON Passive Optical Network
PoP Point of Presence (Point-of-Presence)
POP Post Office Protocol
POS Point of Sale
POTS Plain Old Telephone Service
PPP Point-to-Point Protocol
PPV Pay-Per-View
PRA Primary Rate Access
PRI/BRI Primary Rate Interface/Basic Rate Interface
PR-ISDN Primary Rate ISDN
PSAP Public Safety Answering Point
PSE&G Public Service Electric and Gas Co (USA)
PSMS Premium SMS
PSPDN Packet Switched Public Data Network
PSTN Public Switched Telephone Network
PTA Policy Targets Agreement
PTO Public Telecom/Telephone Operator
PTO Public Telecommunications Operator
PTS Public Telecommunications Service
PTT Postal, Telegraph & Telephone (operator)
PTT Push-to-talk
PVC Permanent Virtual Circuit
PVR Personal Video Recorders
PX Personal Exchange
QAM Quadrature Amplitude Modulation
QoS Quality of Service
QPSK Quaternary Phase Shift Keying
QSIG ETSI-developed ISDN signalling system
RACE Research & Development Advanced
Technologies
R-ADSL Rate ADSL
RAID Redundant Arrays of Inexpensive Discs
RAM Random Access Memory
RAMP Radio Access Mail Protocol
RAN Radio Access Network
RASCOM Regional African Satellite Communications
Organisation
RBOC Regional Bell Operating Company (USA)
RCC Radiocommunications Consultative Council
RCR Research and Development Centre for Radio
Systems
RCS Return Channel via Satellite
RCTS Remote Community Television Services
RDN Radio Data Network
RDS Radio Data System
RDSS Radio Determination Satellite Services
RE-ADSL Range Extended ADSL
REP Regional Equalisation Plan
RF Radio Frequency
RFID Radio Frequency Identification
RHO Regional Headquarters Operator
RIM Remote Integrated Multiplexer
RIO Reference Interconnection Offer
RISC Reduced Instruction Set Computer
RITT Research Institute of Telecommunications
Transmission
RLL Radio Local Loop
RMU Remote Monitoring Units
RNP Regional Network Provider
RNZC Radio New Zealand Commercial
R-OADM Reconfigurable Optical Add/Drop Multiplexer
ROI Return on Investment
RoIP Radio over IP
ROM Read Only Memory
RPC Remote Procedure Call
RPP Receiving Party Pays
RPR Resilient Packet Ring
RPVI Reseaux Prives Virtuels Internationaux
RSV Remote Stored Value
RSVP ReSerVation protocol
RTBX Real Time Bandwidth Exchange
RTCP Real Time Control Protocol
RTF Rich Text Format
RTH Regional Telecommunications Hub
RTIF Regional Telecommunications Infrastructure
Fund
RTP Real-time Transport Protocol
R-UIM Removable User-Identity Module
RUO Reference Unbundling Offer
SAC South America Crossing
SACCH Slow Associated Control Channels
SADC Southern African Development Community
SAFE South Africa-Far East (cable)
SAM Short Audio Message
SAMEA South Asia, Middle East, and Africa
SAN Satellite Access Node
SAN Storage Area Network
SAO Standard Access Obligations
SAP Secondary Audio Planning
SARFT State Administration of Film and Television
(China)
SAT South Atlantic Telecommunications Cable
SATIX Super Area Transit Information Exchange
SATRA South African Telecommunications Regulatory
Authority
SBO Service-Based Operator
SBS Small Business System
SC/MU Single-Cell, Multi-User
SCA Subsidiary Channel Authorisation
SCADA Supervisory Control and Data Acquisition
SCE Service Creation Environment
SCLT Solomon Telekom Company Ltd
SCP Service Control Point
SCTP Stream Control Transmission Protocol
SD-CD Superdensity CD
SDDS Special Digital Data Service
SDH Synchronous Digital Hierarchy
SDL Specification and Description Language (ITUT)
SDMI Secure Digital Music Initiative
SDN Software Defined Network
SDNP Sustainable Development Networking Program
SDSL Symmetric Digital Subscriber Lines
SDTV Standard Definition TV
SDV Switched Digital Video
SES Societe Europienne des Satellites
SET Secure Electronic Trading
SFM Switch Fabric Module
SFN Single Frequency Network
SGML Standard Generalised Markup Language
SGT Secretaria General de Telecomunicaciones
(Spain regulator)
SHDSL Symmetric High-Speed Digital Subscriber Line
SHF Super High Frequency
S-HTTP Secure Hypertext Transfer Protocol
SIA Satellite Industry Association
SIM Subscriber Identity Module
SIMD Single Instruction Multiple Data
SIP Session Initiation Protocol
SITA State Information Technology Agency (South
Africa)
SLA Service Level Agreement
SLC Subscriber Line Charge
SLT Single Line Terminal
SMATV Satellite Master Antenna Television
SMB Server Message Block
SMDS Switched Multimegabit Data Service
SME Small and Medium Enterprise
SMIL Synchronised Multimedia Integration Language
SMR Specialised Mobile Radio
SMP Significant Market Power
SMS Short Message Service
SMSC Short Message Service Centre
SMSCE SMS Centre Extension
SMTP Simple Mail Transport Protocol
SNA System Network Architecture
SNET Southern New England Telecom
SNG Satellite News Gathering
SNHC Synthetic Natural Hybrid Coding
SNMP Simple Network Management Protocol
SNO Second National / Network Operator
SOE State-Owned Enterprise
SOHO Small Office Home Office
SONET Synchronous Optical Network
SOP Supplementary Order Paper (NZ)
SP Service Provider
SPA Strategic Partnerships Arrangement
SPC Stored Program Control
SPCL Service Providers Class Licence
SPOTs Services and Products of Telstra
SPT Soul Pattinson Telecommunications
SPTA Shangai Posts and Telecommunications
Administration
SQL Structured Query Language
SS Signalling System
SSI Server-Side Includes
SSL/SHTTP Secure Sockets Layer/Secure
Hypertext Transfer Protocol
SSP Service Switching Point
SSS Specialised Satellite Services
SSSO Specialised Satellite Service Operator
STB Set-top Box
STEP Standard for the Exchange of Product
Marketing Data
STEP Statewide Telecommunications Enhancement
Program
STP Shielded Twisted Pair
STP Signalling Transfer Point
STT Secure Transaction Technology
STU Set-top-Unit
SVC Stored Value Card
SVC Switched Virtual Circuit
SVoD Subscription Video-on-Demand
SWIFT Society for Worldwide Interbank Financial
Telecommunication
TAC Telecommunication Administration Centre
TACS Total Access Communication System (Cellular)
TAD Telephone Answering Device
TAE Trans-Asia-Europe (cable)
TAF Telecommunications Advisory Forum
TAP Transferred Account Procedure
TAPI Telephone Application Preparing Interface
TARBS Television And Radio Broadcasting Services
TASI Time Assigned Speech Interpolation
TAT Trans-Atlantic Cable
TAX Trunk Automatic Exchanges
TC RES Technical Committee Radio Equipment and
Systems
TCAM Ternary Content Addressable Memory
TCAP Transaction Capabilities Application Part
TCI Telecom Cook Islands
TCNZ Telecom Corporation of New Zealand
TCP Transmission Control Protocol
TCP/IP Transmission Control Protocol/Internet
Protocol
T-DAB Terrestrial-DAB
TDC Transparent Data Channel
TDCC Time Division Cross Connect
TD-CDMA Time Division CDMA
TDD Time Division Duplex
TDM Time Division Multiplexing
TDMA Time Division Multiple Access
T-DMB Terrestrial-Digital Multimedia Broadcasting
TDOA Time Difference Of Arrival
TD-SCDMA Time Division SCDMA
TDSL Time Division Duplex DSL
TDU Tube Distribution Units
TECC Tasmanian Electronic Commerce Centre
TEL Trans-European Line
TET Trans-European Telecommunications
(network)
TETRA TErrestrial Trunked RAdio (formerly Trans
European Trunked Radio)
TEX Transaction Exchange Limited
TGNS Telstra Government Network Services
TIA Telecommunications Industry Association
TIDA Telecommunications Industry Development
Authority
TINA-C Telecommunications Information Networking
Architecture Consortium
TIO Telecommunications Industry Ombudsman
TIPHON Telecommunications and Internet Protocol
Harmonisation over Networks
TIPIA TIPHON IP-telephony Implementation
Agreement
TISPAN Telecommunications and Internet converged
Services and Protocols for Advanced
Networking
TISSC Telephone Information Services Standards
Council
TKIP Temporal Key Integrity Protocol
TLD Top Level Domain
TMN Telecommunication Management Networks
TNSP Transmission Network Service Provider
TNZIA Telecom New Zealand International Australia
TNZM Telecom NZ Mobile
TPBN Telstra Notes Public Network
TPC Trans-Pacific Cables
TPOI Transmission Points of Interconnection
TQIP Transmission Quality Improvement Program
TRASA Telecommunications Regulators’ Association
of Southern Africa
TRI Technology Resources Industry
TRIMS Traffic Information and Management Systems
TSAG Telecommunication Standardisation Advisory
Group
TSAPI Telephone Switched Application Programming
Interface
TSKL Telecom Services Kiribati Limited
TSLRIC Total Service LRIC
TSO Telecommunications Services Obligation
TTC Telecommunications Technology Committee
TTC Tonga Telecom Commission
TTS Telecom Transaction System
TTY Telephone Teletypewriter
TUANZ Telecommunications Users Association of New
Zealand
TUP Telephony User Parts
TVC The Value Channel
TVNZ Television New Zealand
TVoIP TV over Internet Protocol
TVRO Television Receive-Only (satellite dish)
TVSN TV Shopping Network
UAWG Universal ADSL Working Group
UCE Unsolicited Commercial Email
UDP User Datagram Protocol
UETA Uniform Electronic Transactions Act
UGC User Generated Content websites
UHF Ultra-High Frequency
UICC User IC Card
UIFN Universal International Freephone Number
UIH Universal International Holdings
ULL Unbundled Local Loop
ULLS Unconditional Local Loop Services
ULSI Ultra Large Scale Integrator
UMA Unlicensed Mobile Access
UMB Ultra Mobile Broadband
UMTS Universal Mobile Telecommunications Service
UNCTAD UN Conference on Trade and Development
UNDP United Nations Development Programme
U-NII Unlicensed National Information Infrastructure
UPT Universal Personal Telecommunication
UPTN UPT Number
URL Uniform Resource Locator
USAID US Agency for Internal Development
USAL Unified Access Service Licence
USAT Ultra Small Aperture Terminal
USF Universal Service Fund
USG Universal Subscriber Gateway
USIM User Service Identity Module
USO Universal Service Obligation
USSD Unstructured Supplementary Service Data
USTA United States Telecom Association’s
U-TDOA Uplink Time Difference of Arrival
UTO Universal Transport Operations
UTP Unshielded Twisted Pair
UTRS UMTS Terrestrial Radio Access
UTV Universal Cable Television
UWB Ultra-Wideband
UWCC Universal Wireless Communications
Consortium
V2oIP Voice and Video over Internet Protocol
VAEIS Video and Audio Entertainment and
Information Services
VAMS Value-Added Mobile Services
VAN Value-Added Network
VARs Value-Added Resellers
VAS Value-Added Service
VBI Vertical Blanking Interval
vBNS very high-speed Backbone Network Service
VBTS Video Based Telecommunications Services
VDSL Very High Data Rate Digital Subscriber Line
VDT Video Dial Tone
VEC Video Embedded Code
VEIL Video Encoded Invisible Light
VERONICA Very Easy Rodent-Oriented Netwide
Index to Computerised Archives
VICS Vertical Interval Control Signals
VIP Video Information Provider
VIS Voice Information Services
VLAN Virtual Local Area Network
VLSI Very Large Scale Integration (semiconductor)
VMD Virtual Manufacturing Devices
VMNO Virtual Mobile Network Operator
VMO Virtual Mobile Operator
VMS Voice Messaging Service
VNI Voice Network Interface
VNNIC Vietnam Internet Network Information Centre
VNS Virtual Network Services
VoBB Voice over Broadband
VoD Video-on-Demand
VoDSL Voice over Digital Subscriber Line
VOI Voice over the Internet
VoIP Voice over Internet Protocol
VoN Voice over Net
VOP Visa Open Platform
VoP Voice over Packet
VoWLAN Voice over Wireless LAN
VPDS Virtual Private Data Service
VPLS Virtual Private LAN Service
VPN Virtual Private Network
VPPs Village Pay Phones
VPS Video Programming System
VR Virtual Reality
VRML Virtual Reality Modelling Language
VSAT Very Small Aperture Terminal
VT/VTP Virtual Terminal/Virtual Terminal Protocol
VTS Video Telephone Standard
VXML Voice eXtensible Markup Language
W3C World Wide Web Consortium
WACC Weighted Average Cost of Capital
WAIS Wide Area Information Service
WAN Wide Area Network
WAP Wireless Application Protocol
WAPI Wireless Authentication and Privacy
Infrastructure
WARC World Administrative Radio Conference
WASC West Africa Submarine Cable
WBT Web-based Training
WBT World Business Traveller
WCDMA Wideband Code Division Multiple Access
WCIT World Congress on IT
WCS Wireless Communication System
WDM Wavelength Division Multiplexing
WDM-PON Wavelength Division Multiplexing
PON
WiFi Wireless Fidelity
WiFiRAN WiFi Radio Active Network
WiMAX World Interoperability for Microwave Access
WIN Wireless Intelligent Networks
WINForum Wireless Information Networks
Forum
WIPI Wireless Internet Platform for Interoperability
WipLL Wireless IP Local Loop
WIPO World Intellectual Property Organisation
WISP Wireless Internet Service Provider
WIZ Wireless Internet Zone
WLAN Wireless Local Area Network
WLL Wireless Local Loop
WLNP Wireless Local Number Portability
WLR Wholesale Line Rental
WME Wireless Multimedia Enhancements
WML Wireless Markup Language
WORM Write Once Optical Media
WOS Web-On-Site
WPA WiFi Protected Access
WPAN Wireless Personal Area Networks
WPBX Wireless PBX
WPSS Wireless Private Subscriber Service
WRC World Radio Communication
WSP Wireless Service Provider
WTN Worldwide Television News
WTO World Trade Organization
WWW World Wide Web
XML eXtensible Markup Language














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