4G to Boost Smartphone Sales 14.7% in 2016 (Current Issue No. 2687 Full Ed.)

Auctions for licenses to operate telecom services on the 900MHz and 1800MHz frequencies will bring Thailand into the high-speed mobile broadband era via fourth-generation (4G) mobile telecom technology. Fierce competition is expected, due to limited availability of bandwidth, especially with a new network operator entering the market. However, this metamorphosis and competition in the 4G arena will inevitably be conducive to 4G smartphone growth here.

KResearch is of the view that 4G telecom service providers' marketing strategies to win customers, as well as smartphone producers and merchants looking to reap from 4G technology, should be important boosters to Thailand's smartphone sales. Within this market, two major consumer segments are expected to contribute to smartphone sales growth: 1) users of 2G phones, wherein at present there are about 16 million 2G mobile numbers held by about 10.7 million users, growth in this segment being likely to be encouraged mostly by telecom network provider promotions; and, 2) users of 3G phones that do not support 4G technology. They will be a significant segment for smartphone sales, urged by a desire for faster performance supported by telecom network providers, as well as promotions by smartphone manufacturers and merchants.

KResearch expects that smartphone sales will reach 17.9-18.7 million units in 2016, expanding 14.7-19.9 percent YoY, while a market value of around THB93.88-THB94.48 billion, growing 5.1-5.8 percent YoY. Since the retail price per unit of smartphones is now much lower, overall market value expansion may be marginal compared to growth in the number of smartphone units sold.