3G service will likely play a significant role in revamp of mobile phone services, whereas the National Telecommunications Commission (NTC)'s ultimatum warning mobile phone service providers to officially institute mobile number portability (MNP) – which is needed to support 3G service – would be another factor toward shaping the direction of the mobile service market in the future.
KResearch views that the Thai mobile phone service market in 2H10 (before 3G service officially becomes available) will show some growth, but may be lower than during 1H10 due to a high base from last year and an apparent trend of economic deceleration overall. Nevertheless, demand for Value-Added Services (VAS) should help boost market growth, so we expect that the cellular phone service market will likely achieve 6.8 percent growth overall in 2010, versus the 1.0-percent growth in 2009. Voice service turnover may grow about 3.0 percent, while VAS services should grow up to 25.0 percent.
As for the near-term outlook on MNP, KResearch expects that porting fees will affect customers' decisions toward changing service providers, particularly those who subscribe to prepaid services. In long-run when the competition in 3G service is expected to be more intensified, service providers' marketing strategies may include porting fee reduction or exemption to increase the number of new customers.
After 3G becomes officially available, we expect that service providers may begin using price strategies and develop new services to attract customers from other networks, as well as persuading their existing 2G users to try 3G, particularly for VAS services because bright future tends to lie ahead for increasing VAS service revenue. The current revenue of non-voice service is not over 20 percent of total cellular network income in Thailand. In countries where 3G service is already available, it has reached 30-70 percent of their total mobile service turnover.
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