Industry Competition in 2021
and Outlook for 2022

Mobile business

%

Fixed broadband business

%

Subscriber market share in mobile and fixed broadband businesses

Industry Competition in 2021

Despite the COVID-19 impact to various industries stemming from a decline in economic activity and weaker purchasing power, the mobile telecommunication industry tended to be less affected than many other industries as it is considered a basic need for consumers. In 2021, the mobile telecommunication industry encountered multiple challenges since the beginning of the year through to the third quarter, and yet it managed to record a total revenue of Bt 320,000 million, up 2% from the previous year, thanks to the government’s economic stimulus to promote consumer spending. This coupled with the easing of COVID-19 restrictions resulted in an increase in the number of mobile subscribers to 96 million, a growth of 6% year-on-year. Nevertheless, the dampened purchasing power prompted operators to focus on price competition to maintain their customer bases and expand market shares, offering unlimited data plans at lower prices for prepaid and postpaid customers, resulting in a lower average revenue per user (ARPU) for the industry.

In 2021, mobile operators were competing to build awareness around 5G technology and expanding network in key areas with a high density of demand including the major cities in 77 provinces and the Eastern Economic Corridor (EEC). This year saw 5G adoption reaching 4 million subscribers, propelled by the growing demand for advanced and high-speed technology and the rollout of new 5G handset models at more affordable prices as well as the AR (augmented reality) and VR (virtual reality) services that deliver the superior 5G experience to customers. In the meantime, B2B clients were also keen to embrace 5G technology in different applications including smart manufacturing & smart factory, smart property, and smart transportation & logistics among others.

The home broadband market grew 13% over the past year with the penetration rate reaching 57% of the total population in Thailand following demand for work and learn online from home in response to the changing consumers’ behaviors and lifestyles. Nevertheless, the subdued economy during the COVID-19 outbreak pressured service providers to continue offering low price packages, starting at B400/month. Discounts were also offered to new customers or those switching service provider, resulting in a decrease of the industry’s ARPU from the previous year. Their strategy to maintain customer bases also extended to providing a variety of contents, value- added services, and a long-term 24-month service contract. Emphasis was also placed on enhancing service quality to ensure customers’ maximum satisfaction through multiple services such as 24-hour customer care and fast installation service within 24 hours.

The enterprise market has demonstrated a high potential of growth as businesses from small to large-sized enterprises are rushing to undergo digital transformation, opening up growing opportunities to generate more revenue from cloud services, cyber security solutions, and Internet of Things-(IoT). As a score of international players are eyeing entry into Thailand’s cloud market, they are likely seeking to form a strategic partnership with a local telecom service provider already with a large customer base to push new technologies to the enterprise client market more quickly. Moreover, opportunities abound for driving new product offerings to accommodate customers’ adapting to a new normal life that incorporates digital technology into their day-to-day activities such as digital financial services and online medical and healthcare services.

Outlook for 2022

Thailand’s economic outlook for 2022 shows signs of steady recovery following the relaxation of lockdown restrictions. In December 2021, the Bank of Thailand announced a GDP growth forecast of 3.4% for 2022 due to the easing of restrictions and reopening to foreign tourists without requiring quarantine, starting on November 1, 2021. The moves are expected to help reboot the tourism sector, a key driver of the country’s economy. This coupled with consumers’ feeling less concerned about the spread of COVID-19 because of the lower rate of coronavirus infections and deaths toward the end of 2021 and the rising rate of COVID-19 vaccinations has culminated in a pickup in consumer confidence. Such favorable factors could help drive the overall revenue of the mobile industry.

As the COVID-19 uncertainties with any new coronavirus variant have a downward pressure on the country’s economy and purchasing power, price competition could be strongly influenced by the mobile phone spending of consumers since they will look for the best value-for-money packages.

In 2022, 5G adoption is expected to expand more toward mid-tier customers as 5G- enabled smartphone models with more affordable prices are entering the market in numbers, fueling the growth of the 5G market. In response, service providers are likely to roll out more 5G packages that suit the needs of mid-tier customers, leading to an increase in the industry’s ARPU among 5G subscribers.

Aside from individual customers, 5G technology has played a key role in facilitating the business operations of enterprise clients in various industries such as health care, agriculture, transportation and logistics, and production, thereby maximizing their operational efficiency and productivity. This provides lucrative business opportunities for 5G services in the corporate client market. For their part, 5G operators are anticipating introducing a diverse range of 5G-related services and solutions to better address the needs of enterprise clients such as 5G private network, 5G MEC, 5G network slicing among many others.

The home broadband market in Thailand is expected to sustain its growth amid the spread of COVID-19. Currently, households with fixed broadband connectivity in Thailand is at 57%, demonstrating high growth potential especially in suburban areas. Multiple favorable contributing factors include the more affordable starting price of the home internet package and the offering of a variety of value-added packages. Central to this are home internet packages bundled with IoT devices and home solution packages that control the security of the home or control and monitor electrical appliances, all to accommodate a new normal lifestyle. The operators also attach significance to building an image of offering excellent service quality to attract and boost customer confidence. Given these positive factors, the home broadband business is expected to sustain robust growth in 2022.

Price competition in 2022 is expected to remain unchanged from the previous year. The package price still starts at Bt 399/Month, triggered by the subdued economic situation and dampened purchasing power. The market will also see service providers compete on delivering services with unique and valuable characteristics. Examples include offering a 24-month service contract at an affordable price as well as a diverse range of products, and a higher discount rate to attract new customers while protecting the customer bases as a means to maintain market share.

There is a growing trend of numerous industries incorporating digital technology into their businesses to enhance competitiveness and corporate management efficiency. In addition, the work from home trend that necessitates the need for employees to connect online to the organization’s systems has propelled the growth of cloud business, cyber security service, Internet of Things (IoT), and IT solution service over the year. Other contributing factors include the enactment of Thailand’s Personal Data Protection Act and Cyber Security Act that has raised awareness about the importance of technological data among organizations, fueling more investment in cyber security systems. At the same time, the relaxation of lockdown restrictions and reopening to international tourists have enabled businesses to regain momentum and resume their business operations which had stalled amid the pandemic. It is anticipated that in 2022, the strategy employed by service providers to consolidate their cloud and ICT business is to form a strategic partnership with other companies, both domestic and foreign, to deliver services that better answer the needs of clients, driving the cloud and ICT businesses to accomplish sustainable growth.