Thailand's 3G Gap
Thailand has been waiting for a fully operational introduction of 3G technology, it seems, forever. The impact this has on business communications is hard to quantify but many businesses suffer from poor telephone connections, erratic Internet performance and also lack the mobility regional competitors can rely on. When will 3G finally arrive and what can we expect when it does. Director asked Greg Lowe to investigate.
November's news that mobile carrier TrueMove signed an agreement with Apple to bring the Third Generation (3G) iPhone to Thailand received a rapturous welcome on tech blogs and chatrooms.
The latest, sleekest addition of one of the most innovative products in the mobile phone world is expected to sell for THB 25,000 per unit. As TrueMove's deal was non-exclusive, the rumour at time of press was that Thailand's three biggest phone operators – AIS, TrueMove and DTAC – had agreed to sign up one million 3G iPhones between them.
An impressive launch for an impressive product – pity then that there will be no service to make owning the phone more than a fashion statement.
Technology Failure
3G was first launched in Germany in 2001. It provides advanced mobile services, such as wide-area wireless voice telephony, video calls, and broadband wireless data. Its bandwidth should surpass what Thailand's fixed broadband service providers currently offer.
Without this service, users will not be able to utilise the 3G iPhone (or any of the other 3G handsets) cutting edge applications and functionality effectively.
The problem in Thailand is that, despite years of lip service, the industry regulator, the National Telecommunications Commission (NTC), has so far failed to properly license 3G, the frequencies it operates on, or the base stations and other infrastructural technologies needed to launch it in the country.
In May, AIS, the country's largest mobile carrier, launched Thailand's only 3G service, operating on the 900 Megahertz (MHz) frequency, in Chiang Mai, but with limited success. While the lower frequency has better range, making it suitable for upcountry environments, there are much fewer handsets available, and the 2100MHz bandwidth, more of an international benchmark, is as yet unlicensed.
Thailand Lags Behind
Development is complicated further by the fact that mobile carriers have to obtain concessions from one of two state-owned telecommunications companies, TOT and CAT Telecom, which have their own 3G plans.
Analysts say that Thailand will remain on the technological back foot until NTC slashes through the red tape currently restricting 3G's development.
"3G network development has been slow in Thailand, largely due to lack of access to 2100MHz spectrum," says Nathan Burley, an analyst at Ovum, a telecoms consultancy. "This means Thailand trails most other markets in the region on 3G mobile broadband competition.
"We continue to encourage speedy licensing of 2100MHz spectrum in Thailand," he says. "However, planned 3G networks will provide platforms for advanced applications and mobile wireless broadband. Data and mobile broadband services provided by 3G networks will ultimately benefit Thailand and its economy."
Stuck For Words
Despite airing their previous grievances, Thailand's mobile operators are shying away from commenting on the state of play. DTAC was unable to comment until it gained a clearer understanding of current complexities. TrueMove wanted to finalise its new business plan before talking to the press about 3G and the new iPhone.
AIS, however, agrees that Thailand's telecoms industry will not be truly regionally competitive until it launches a nationwide mobile broadband service.
While the firm is ready to roll out the technology, it says the current fees it pays TOT make further developing its 3G900 service uneconomic. As such, it will consolidate its coverage in the major provinces of Bangkok, Chiang Mai and Chonburi, rather than spreading its investment more thinly over smaller areas in many provinces.
A further USD 89 million will be spent on developing the 3G900 service until 3G2100 is licensed.
"Once we obtain 3G2100 licence, which has been pending for four years now, we’ll heavily invest in the network build-up,” says AIS president Wichian Mektrakarn. “We plan to spend USD 720 million per year for the first three years. We keep being told by NTC that the licence will be issued next year."
Waiting Game
Once launched, AIS expects 3G take up rates to be 10 percent in the first year, 25 percent in the second, 50 percent in the third, then 100 percent by the fourth year.
There were some encouraging signs when ICT minister Mun Patanaotai recently told reporters that 3G and mobile broadband licenses would be allocated to operators by mid-2009, after he submits his plan to Parliament in January. He also plans to merge NTC and the National Broadcasting Commissions, which also plays a regulatory and licensing role, simplifying the procedural process.
But after so many false starts, the industry is adopting a wait-and-see approach.
"I don’t want to guess any more," says Wichian. "When it [the license] comes, we’ll invest. There’s no point putting together a big budget just to prepare for nothing."
