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24 Jun 2010


Mobile Service Investment Plans Awaiting Clarification on Draft Information Memorandum of 3G and Beyond Spectrum Assignment (Business Brief No.2857)

Some revised content and added conditions in the draft information memorandum of IMT (International Mobile Telecommunications) or 3G and beyond spectrum assignment will likely increase operational costs for mobile operators, as well as intensifying competition within the mobile phone service market because new operators with low capital may be allowed to enter the market as mobile virtual network operators (MVNO).
Although the revised draft should help to clarify some issues, there will be other matters that we should keep an eye on, such as the starting price for new licensing, clarification on technological requirements for new frequency and details on concession conversions before the auction which would affect mobile service operators' financial plans. As a result, service providers will have to pay close attention to public hearing scheduled to be held on June 25, 2010, because it may bring to light other issues or affect some conditions of the frequency allocations. In addition, the discussion during the public hearing may reveal the timing of the frequency auction. Many interested parties remain doubtful whether the auction will take place by August, as expected by the NTC.
3G-2.1GHz spectrum is expected to help enhance the effectiveness of mobile phone service, particularly value added services that need a network with high quality and adequate bandwidth to enable high data transfer rates. 3G service would thus help boost value-added service (VAS) market growth. Previously, the VAS market expanded well, but the growth was decelerating due to limitations in transmission quality, which is a barrier to the introduction of other new technology into the market.

Although some private sector mobile operators have already launched 3G service on existing frequency, VAS has seen little response due to limitations in service availability and spectrum quality. In 2010, KASIKORNRESEARCH (KResearch) expects that the VAS market will be valued at around THB27-28 billion this year, growing 10.5-14.6 percent YoY, against the 15.22-percent growth seen in 2009. After full 3G service on 2.1 GHz band becomes available next year, it is expected that VAS will likely post higher growth.