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29 Dec 2017

Industry

Wireless Telecommunication Market to rise 5.9% in 2018 but Growth slowing amid Fierce Competition (Current Issue No. 2892 Full Ed.)

KResearch views that Thailand's wireless telecommunication market growth will slow somewhat in 2018 on strong competition, particularly in terms of pricing per megabyte for data transmission services. Consequently, the growth of revenues from these services may decline. At the same time, the income from voice services is shrinking since most Thai consumers now prefer the use of online communications over voice as their main form of mobile network traffic. This trend has been evident since 2013 propelled by the third-generation network (3G). At the same time, operators are faced with managing their business costs, particularly expensive licenses at auctions for the fourth-generation mobile phone network (4G). Also, they have to get ready for auctions of 900-MHz and 1,800-MHz spectrum licenses, which are expected to occur in the second quarter of 2018.

Amid intense competition, KResearch views that the wireless telecommunication market may decelerate to a value somewhere between THB253.93 billion-259.58 billion in 2018, but still growing in a range of 4.7-7.1 percent over 2017 (median at 5.9 percent). Such expansion will be driven by persuasive marketing campaigns to encourage more users to switch to monthly service plans, or upgrade their monthly packages; operators may offer bonuses to gain such interest. Since Thai consumers seem to like wireless broadband service, the wireless telecommunication market should continue to rise, albeit at a decelerating rate. KResearch further expects that in 2018, Thailand's telecommunication service market should be worth around THB186.66 billion-190.49 billion, up between 14.7-17.1 percent, thus slowing from the expected 21.8 percent growth for 2017 due to pricing wars that resulted in lower service fees.

Voice services will likely decelerate further in 2018. KResearch expects that the market value of voice services will be around THB67.27 billion-69.09 billion, contracting 13.3-15.6 percent from 2017. Nonetheless, such performance would represent only a mild contraction compared to the 16.1-percent shrinkage in 2017 because many prepaid users have shifted to monthly contracts due to special campaigns offered by mobile network operators.

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