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Thailand: International call service in year 2006 worth THB12 Billion, VoIP to be monitored

September 29, 2006
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(Thai Press Reports Via Thomson Dialog NewsEdge) Section: Research - The National Telecommunications Commission (NTC) recently granted a type-three license to AIS International Network Co., Ltd. to operate an international call service. Therefore, there are now three players in the market providing an international gateway service, including the existing operators, CAT Telecom Pcl. and TOT Pcl. Many other telecom operators, particularly mobile phone service providers, already having their own customer bases, are expected to jump on the bandwagon. Meanwhile, the licensing of PC-to-PC phone service to internet service providers is also likely to intensify the heated competition in the international internet gateway market. Against the backdrop of an increasing number of operators in this market, this is another step toward liberalization in the telecom industry, where the international call service had long been monopolized by a state enterprise. In the midst of greater rivalry among a rising number of operators, international calling rates are set to come down, with improved services, which will end up benefiting end-users.



The use of sophisticated Voice over Internet Protocol (VoIP) technology for international calls made via mobile and fixed-line telephones has resulted in a steady reduction in overseas calling rates, and rising call traffic. In 2005, international calling volume reached 171 million calls, up 9.32 percent from the year earlier. In terms of value, however, the market turnover totaled some THB14 billion, down 6 percent from 2004. Kasikorn Research Center (KResearch) estimates that market turnover is set to drop further, to some THB12 billion this year, declining by 15 percent from 2005. The slowdown can be attributed to a slump in international calling rates in an environment of increasing communications alternatives, i.e., e-mail, PC-to-PC phone service, etc.

Though international calling rates are falling, the fact that market turnover remains higher than THB10 billion has caused many operators to be interested in offering the service. In addition, the NTC has granted more new operation licenses, both a Phone-to-Phone license to one more operator, and PC-to-Phone service, which is offered by 7-8 operators at present. Moreover, the NTC also permits internet service providers to offer PC-to-PC internal calls without having to ask for a new license, which intensifies the competition even further. Also, the development of new technologies has made market access for such services easier than before.

In 2006, the international call business has started to show a change in direction, with more new entrepreneurs offering service alternatives for end-users. This has introduced an environment of competition, as this service had previously been monopolized by a state enterprise. Concerning the next phase of the international call business, KResearch is of the opinion that calling rates are likely to drop steadily, while the number of telecom providers is expected to rise - but by what amount still depends on the decisions of the NTC, which has the direct authority to grant licenses to entrepreneurs who want to offer the service. Previously, many operators had expressed their intent to offer international call service, because they feel that this business is growing steadily and has a high value, while the related technology will be developed further, particularly with the introduction of Voice over Internet Protocol or IP telephony.

However, the current situation shows that international call service usage is still concentrated in large operators in the market who possess a stronger business network, including a larger service network, overseas circuit connection network and group of business allies. Therefore, it is necessary to speed adjustments to support the constantly intensifying competition, as more operators, i.e., the group that already has service networks and customer bases, e.g., mobile phone and internet customers, are being granted licenses to offer international call service. Apart from them, there are also telecom operators from overseas that can offer global connections and convenient service through the internet, which means that the competition is not only limited to other operators in this country, but has expanded to an international level.

(Kasikorn Research Center: 29 September 2006)

Copyright 2006 Thai Press Reports


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