|Local Wireless Telecommunication Business
|AIS is the leading Thai mobile telecommunication service company with 52% of revenue market share and serving 43% of subscriber market share (more than 40 million subscribers) on 900 1800 and 2100MHz spectrums as of December 2013.
In 2013, AIS successfully moved from 2G technology to the 3G platform that offers download speeds of 42 Mbps, enabling customers to experience faster speed of mobile internet. With the popularity of smartphones and social networking applications continuing to rise, AIS focuses on insight to customer behaviour to deliver services that meet their various demands. From this, AIS has promoted 3G services throughout the year, providing different price options according to volume of usage. In addition, there are also packages tailored to suit customers who especially enjoy social networking applications or recently began using the internet via their smartphones. Meanwhile, the 2G service is still available, although it is expected to decline.
Thanks to the faster data speed of 3G technology, AIS can support rich and various new applications such as video streaming. AIS has launched “AIS Mobile Barclays Premier League” which allows customers to enjoy live broadcasts of Premier League matches through their smart devices, while “AIS mPay Rabbit” makes it easy and convenient for customers to pay their BTS and BRT fares and purchase food items at multiple well-known shops simply by using smart devices that feature the NFC technology (Near Field Communication). In response to the growing popularity of mobile internet usage among customers who frequently travel abroad, AIS has designed unlimited data roaming packages. We also developed “AIS Data Roaming” application from which customers can easily check the volume of data roaming.
To reach a wider range of customer groups, AIS has also launched a marketing campaign to provide quality smart devices that support 3G technology at multiple pricing options. The world leading branded smartphones offered include Apple, Samsung and Sony, as well as co-branded mobile phones through cooperation between AIS and such manufacturers as Huawei, Acer and ZTE.
In 2013, AIS opened “AIS Service Point” as a channel through which customers could upgrade from 2G to the 3G platform. To achieve this, AIS worked with 500 dealers across the country to upgrade their service. At the same time, over 40 Telewiz outlets were upgraded to Telewiz Plus. The upgraded outlets are able to deliver an even better customer experience, by allowing customers to test and try popular mobile devices before making a purchase decision, and by helping transfer data such as numbers, photos, messages, and music from the customers’ old devices to the new ones through the innovative “Cellebrite”. For improved convenience, Telewiz Plus shops have also been equipped with an effective queuing system and payment kiosks. Over 200 AIS Promoters have been trained and assigned to provide advice on products through multiple distribution channels around the country, including such key account and modern trade locations as JMart and GT; modern trade outlets such as Tesco Lotus, Power Buy and 7-11; and computer shops such as iStudio, Banana IT, and IT City.
In response to the growing numbers of smart device users, AIS has increasingly focused on a proactive approach to managing customer relations in order to ensure best customer experience. Early in the year, AIS introduced 3G on the 2.1GHz spectrum to the market. When encountering connection problems, customers will receive a message with step-by-step instructions and settings to help the customers solve the problems by themselves. For customers who are beginners using mobile internet, AIS has provided Usage & Package Notification to facilitate customer use of the service. AIS has also opened new shops and renovated its service offices under the concept of “Experience Shop”, allowing customers to try and test smart devices before making a decision to buy. Smart Table has also been introduced in 19 shops to provide customers with the opportunity to learn about new applications, compare promotion options, and check the specification of smart devices in a multimedia format. Additionally, AIS has trained over 705 staff to be experts in 3G technology and mobile phone accessories. At the same time, AIS continues to offer “AIS Privileges” to satisfy customers’ lifestyles through a range of programs such as the “AIS Privilege App”, which helps customers locate nearby shops that participate in the program, and “AIS Dining Cuisine”, which allows customers to enjoy delicious dishes prepared by Michelin Star Chefs, and “AIS Trip”, which can arrange wonderful trips for customers.
Industry and Competition
In 2013, the telecommunication business was mainly driven by non-voice services, which grew by 24% while voice services shrank constantly as the penetration rate reached 137% (number of subscriber per population). The official launch of the 3G network on 2.1GHz spectrum during mid-2013 was the turning point in the telecommunication business in term of technological and structural changes. It resulted in a better network quality for the growing demand of the data usage. It also paves the way toward transformation of business based on concession to licensing. This encouraged the competition to be fair (revenue shared 25-30% on the contract compare to regulatory fee 5.25% on license). The operators also encouraged 2G subscribers to upgrade to 3G service for continuity in service as the contract are about to expire.
The 3G licensing has brought to Thai market acceleration of network expansion, as well as increasing advertising, marketing activities, and dealer incentives to promote 3G service. The overall industry spending on marketing has been increased during the past year. Operators offered 3G package with more value by increasing the voice minutes and data usage which make an average price per unit lower than 2G by 15% according to NTBC guideline. However, pricing remained fairly rational and focused on bringing variety of packages designed to meet customers from the upper level to the lower segment. The price of starter package was lowered to attract new smartphone beginners and push for mass adoption. Meanwhile, operators had to address 3G handset penetration and have offered several campaigns to attract customers to change devices from 2G to 3G. In 2013, 3G handset is up to 50% of total market sales. To bring affordable price of handset to customers in middle to lower tier, operators partnered with mobile device manufacturers to build their house-brand.
In 2014, the expansion of 3G network coverage is expected to reach nationwide in response to the customers’ demand on mobile internet. By middle of 2014 when network coverage is more extensive, we may expect higher competition for market share through variety of campaigns to attract both new and existing customers. Comparing to last year, there will be more marketing campaigns to attract 2G subscribers to upgrade to 3G on 2.1GHz as the 2G contract will expire in 2014-15. Meanwhile, price of smartphones and tablets will continue to decline and help expanding market in mid to low tier. The operators will continue to focus on strategic marketing campaigns with leading vendors offering customers more convenient in accessing to affordable 3G devices.
Data service is also a major factor in driving growth on telecom market in 2014. The demand for mobile internet continues to grow and post-paid market will play more important role as customers can connect to the internet constantly. Apart from the use of mobile internet and social apps with it, the development on 3G technology can create new business opportunities supporting life in a digital information age such as m-commerce, mobile marketing, and cloud services for SMEs, etc. In addition, NBTC plans to have license auction on 1800MHz and potentially 900MHz for LTE and 3G which will help strengthening mobile data network and support further variety of services to customers.
|Satellite and International Businesses
THAICOM is the leader in satellite business in Thailand. It uphold the customers’ demand via three satellites, which are Thaicom 4 (IPSTAR), Thaicom 5, and Thaicom 6 (conventional satellites). THAICOM also enhances to related businesses, which are telephone services abroad and internet and media services.
Satellite services and related businesses
THAICOM, founded in 1991, has a 30-year agreement for the operation of domestic communication satellite with the Ministry of Information and Communication Technology (MICT), expiring in 2021, to operate the national satellite communications project. THAICOM launched six satellites into the orbit; however, THAICOM operated three satellites currently, which are
Thaicom 4 (IPSTAR), a broadband satellite, offers a network throughout 14 countries of Asia Pacific Region. THAICOM began the marketing of the IPSTAR service in 2001, using beehive wave distribution technology, thus enabling efficient frequency reuse with massive bandwidth capacity of up to 45 Gbps – 20 times that of conventional satellites. The technology has enabled THAICOM to cater millions of high speed internet users, from individual subscribers to corporate users, including internet and telecommunication service providers.
Thaicom 5, a conventional satellite, receiving the signal from an earth station (transmitting station), amplifies, and retransmits the signal on a different frequency to another earth station (receiving station) anywhere under the satellite’s footprint. This allows telecommunication operators, service providers and broadcasters to benefit from the satellite’s nationwide and cross-regional coverage.
Thaicom 6, a conventional satellite, was launched in the beginning of 2014. It has 18 C-band and 8 Ku-band transponders. Thaicom 6 is co-located with Thaicom 5 at 78.5 degrees East, the Company’s prime orbital slot for broadcast services. In addition to Asia, Thaicom 6 will provide broadcasters and telecom operators in Africa with a full range of end-to-end satellite communication services via its high-power C-band beam dedicated to Africa under the name AFRICOM 1.
Thaicom 7 will be placed at 120 degrees East orbital slot in 2014 and will have maximum 14 high-power C-band transponders serving Asia and Australia. It will be the first satellite that THAICOM operates under the 20-year license from the National Broadcasting and Telecommunications Commission (NBTC), which will enhance THAICOM’s ability to compete in the market as the cost structure reduces.
Telephone services abroad by Shenington Investments Pte Limited (SHEN)
THAICOM is a provider of telephone services abroad through an investment in SHEN, which is a holding company. Its main objective is to invest in international telecommunications in Lao Telecommunications Company Limited (LTC). LTC is a joint venture between the Government of Lao PDR and SHEN. LTC has a 25-year license, expiring in 2021, to provide comprehensive telecommunication services for Laos using the latest digital technology including fixed-line (PSTN and CDMA 450) and mobile (GSM 900/1800MHz and 3G networks), international calling and internet.
Internet and media services by DTV Service Company Limited (DTV)
DTV attaches importance on producing satellite dish of small size to receive signals from Ku-band Thaicom 5 satellite. The dish will enable clear viewing of every TV channel with targets at various buildings in town and out of town. This is because DTV has many more interesting and outstanding programs; for example, news, documentary, movies, cartoons, music, and a lot of more education channels. In addition, DTV will adjust price of the product to be suitable for the market and continue to develop new equipment with capability for appropriate application which, in turn, gives rise to more convenience to expand customers group and creating customer satisfaction. The mentioned equipment includes HDTV Box to support viewing program with High Definition TV system and Hybrid Box which offers an alternative for customer to view TV program via Satellite and Internet with the same box.
Another key investment of DTV is CS LoxInfo Public Company Limited (CSL), which provides Internet-related businesses under the satellite agreement for the operation of domestic communication satellite from CAT, granting it the exclusive license to provide television transponder services via satellite and internet for 22 years, expiring in 2016. CSL has major services including internet services via leased circuit/leased line, high-speed internet services via telephone line (ADSL), high-speed internet services via satellite network (IPSTAR), internet services via telephone line (Dial-up), Internet Data Center (IDC), internet value added services, VoIP service, and Uplink/Downlink services.
Industry and Competition of Conventional Satellite
THAICOM plans to make its satellites, which are located at 78.5 degree East, to be "Hotbird" or demanded satellites based on: the number of subscribers, number of channels in the platform, and being a leader of broadcasting satellite TV services throughout Asia continent. Thailand in present, there are approximately 14 million households having satellite TV and cable TV, and more than 11 million households are pointing at Thaicom 5. Others are cable television's consumers.
In the Asia Pacific region, THAICOM’s major competitors include the satellites from Hong Kong, Malaysia, Luxembourg, and Vietnam. However, as one of the established satellite operators in this region, THAICOM believes that the effect from the competitions will be minimized due to its long-term reputation, relationship with the customers, and the selective neighborhood channels on THAICOM satellites.
In African market, some of the major players in this market include the satellites from United States of America, Luxembourg, Saudi Arabia, and France. However, as the second largest continent in the world that has high density of population but low percent penetration rate of telecommunication technology, Africa is full of potential demands. THAICOM believes that the effect from competitions will be minimized by the cooperation with strategic partners and expansion of the existing customers’ networks. THAICOM will focus on interesting markets and provide selective solutions such as mobile backhaul, VSAT, internet trunking and video distribution. In addition, THAICOM will apply its experience in the Asian market in an African context.
In 2013, THAICOM strongly focused on satellite TV marketing both domestic and international markets. As a result, the business of satellite TV has greatly soared as an increase of 465 channels in 2012 to more than 600 channels in 2013 (as of 30 September). Growth of video distribution for C-band and Direct-to-Home (DTH) services for Ku-band are the key drivers for upcoming year.
In 2014, THAICOM main strategy is to develop strong neighborhood by broadcasting premium channels. THAICOM has also deployed new technology i.e. MPEG-4/DVB-S2 and HDTV to facilitate future demands.
Industry and Competition of Broadband Satellite
At the end of June 2013, there were 656 million fixed broadband lines worldwide. This represents a growth of 6% YoY in 2Q13 (source: www.point-topic.com). Even though the number of global fixed broadband subscribers continue to show growth, rural and underserved areas where access to cable or DSL internet is still not available, continues to be a challenge for nationwide coverage. With such conditions, satellite broadband is still the best available option to provide connectivity in these areas. With gradual decreases in costs in recent years, satellite broadband equipment and associated services is becoming more competitive with other broadband technologies. As newer generation applications are coming online, more and more applications through satellites are being served, such as internet access, virtual private networks, mobile backhaul, and personal access
The consumer behavior is changing to more data dependent, watching movies, making VoIP phone calls, and browse the web. With these changes, the demand of bandwidth for mobile backhaul services is expected to increase dramatically in the near future. This increase in mobile backhaul services will continue to drive High throughputs satellites (HTS) capacity demand in Asia-Pacific in the coming years
Even though Thaicom 4 (IPSTAR) is still the only HTS in the Asia Pacific region, there will be future launches of Global HTS players with coverage over Asia Pacific. With this in mind, THAICOM has continually ensuring that it is differentiating itself from these potential competitors. In addition maintaining good relationships with customers and business partners to ensure customer satisfaction and a win-win cooperation framework.
Currently, Thaicom 4 (IPSTAR) also enables new applications that is “Mobility”, which provides services to mobile sites; for example, ships, planes and vehicles to support varies demand of customers.
|Matchbox’s operating businesses are advertising and production services, producing advertising materials, and coordinating media, such as television, newspapers, radio, advertising signs and websites. Matchbox also organizes event marketing for customers to build up end-user feelings toward products and impress them with the product quality.
According to Nielsen Media Research, the total advertising expenditures in 2013 was at 115,029 million baht, slightly increased by 0.95% from 2012. The nearly flat growth advertising expenditure was from advertising budget-cutting among major consumer product brands, such as Unilever, Beierdorf, and Coca Cola, due to weak economy and political chaos.
Venture Capital Project under “InVent”
InVent was launched in 2012 by INTOUCH to support high potential startups and SMEs in telecom, media, IT, digital content, and also other INTOUCH related businesses. It was a new paradigm shift for Thai industry to have corporate venture capital injecting funds into SMEs who have great potential and performance in telecom, media, IT, and digital content. Therefore, this will support Thai SMEs to gain their competitiveness for the coming AEC in 2015 and also expanding INTOUCH investment portfolio.
After successful project launched and business network establishment in the related ecosystem, great success outcome can be acknowledged after many interested SMEs came to applied. After careful consideration by InVent Committee, INTOUCH invested in three companies so far; Ookbee Co., Ltd., Meditech Solution Co., Ltd., and Computerlogy Co., Ltd..
“Ookbee” is the largest application platform provider for e-publication in Thailand, and expanding into Vietnam, Singapore, and Malaysia. INTOUCH invested 33,400 newly-issued shares or equivalent to 25.03% of the paid-up capital, amounted to 57.48 million baht.
Later, INTOUCH invested 4.99 million baht for 30% shares of “Meditech Solution” who is manufacturing and providing communication solution for paralytics and disabled persons by eye blinking method. Currently, the communication solution from the company is now providing assistance to paralytics and disabled persons to communicate to doctors, nurses, and their relatives nationwide.
“Computerlogy” is one of the leading social media management tool providers who currently providing the solution to many large corporates and enterprises in Thailand. INTOUCH invested 3,334 newly-issued shares or equivalent to 25.00% of the paid-up capital, amounted to 29.01 million baht.
InVent is valuable not only in facilitating investment capital but also provide business opportunity and networking with INTOUCH Group which would be very beneficial to SMEs and innovative to the industry. Therefore, it is a good opportunity for other SMEs to gain their long term competitiveness from InVent and this will be beneficial to the economy of the country.
In 2013, INTOUCH had expanded and strengthened its new business unit to support the eight Breakthroughs initiatives. For any new investment, INTOUCH will go through well-established assessment processes professionally and make prudent decision to ensure that the new business align with INTOUCH overall strategic direction and enhance shareholder value in the longer term.
For 2014, we will continue exploring new business opportunities around INTOUCH’s defined industry namely: Telecom, Media, IT, and Digital Content. Specifically, we will focus at the media arena and gear toward the digital world with big data.