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BMI View: We maintain our view that the focus in the Thai mobile sector in 2016 will be on 4G, as operators forked out exorbitant amounts for valuable spectrum in 2015. The spectrum will enable operators to expand their LTE networks and value-added-services (VAS) without having the state-owned operators taking a cut, as per the previous BTO-concession model. On the fixed broadband side, the National Broadcasting and Telecommunications Commission (NBTC) and ICT ministry have laid out investment and roll-out plans for a national broadband network, using proceeds from the spectrum auction, enlisting state-owned CAT and TOT to carry it out. However, the lack of regulator independence and a political agenda in telecoms still inhibit development of the industry. Looking ahead, the lack of new operators entering the market suggests that its competitive dynamics may remain unchanged for the foreseeable future. As a result, we expect renewed competition to heat up in the market, based on innovative technologies and price.
|Big Three Operators: Financial Outlook Stable|
|Source: BMI, Operator Data. Note: Data for True, DTAC and AIS. All figures in THBmn.|
Latest Updates And Industry Developments
JAS Mobile won the spectrum auction last year but has failed to generate the estimated USD2.1bn required to pay for the 4G spectrum license. DTAC and True have walked away from the auction and AIS is the likely candidate to procure to spectrum initially allocated to JAS Mobile. The failure of JAS to enter the market will ensure that competition amongst the three incumbent players will heat up.
Total mobile subscriptions fell sharply to 83.05mn in Q415 as a result of the compulsory SIM registration drive which lasted till August. This was a 14.5% y-o-y contraction of total mobile subscribers. However, a notable effect was the resulting rise in 3G/4G subscriptions as a percentage of total mobile subscriptions to 96%, from 85% a year earlier, and we forecast total 3G/4G subscriptions to reach 86.6mn by end-2020.
Despite the focus largely on the mobile sector this year, latest fixed broadband subscription data from the regulator has shown a strong continuous growth in subscribers, to 6.4mn in Q415, y-o-y growth of 12.5%. We believe this steady increase will continue in 2016, reaching 6.85mn by the year-end.