Wild ride ahead in mobile-Internet market

Even though there are still no signs that full deployment of third-generation mobile technology (3G) will happen any time soon, 2010 is expected to be a year of high mobile-Internet growth in Thailand. This is because of high demand for consumption of mobile data, and this, in turn, is due to consumer behaviour. Asina Pornwasin reports.

Research firm Ovum has forecast that the number of mobile broadband users in Thailand will grow to about 1.66 million this year. The number was only 595,000 last year. By 2014, the number is expected to rise to almost 30 million.

Ovum Asia-Pacific believes that Thailand's mobile-broadband market will continue its helter-skelter growth this year, even without any sign that widely deployed 3G is around the corner. Its researcher Nathan Burley foresees that Thai mobile-phone operators will change business direction to focus more on services, especially mobile Internet and mobile content, rather than continuing to rely on traditional revenue from voice services.

Increasing demand for mobile Internet comes from two main factors: the proliferation of smart phones and the extraordinary popularity of social networks like Facebook, MySpace and Twitter.

Ready to fight

Advanced Info Service (AIS)'s assistant vice president for Value Added Service Pratthana Leelapanang said that mobile operators would have to differentiate themselves in this year's tough competition. For example, AIS is gearing up to provide services and smart handsets to allow its customers to get the best experience from mobile usage, including voice and data.

"Smart phones are driving a change in consumers' behaviour, towards the use of more mobile-data services. This year it seems that competition among mobile operators will fall into applications along with smart-phone offerings," Pratthana said.

AIS is also aiming to increase its non-voice revenue this year, which comes mostly from mobile-data consumption. It is targeting 25 per cent of revenue from this source, up from 15 per cent last year. Currently, the company has 6.5 million mobile-Internet subscribers - users connecting to the Internet with mobile phones and data cards - and it expects the number to increase to 10 million users by the end of this year.

To drive revenue from mobile-Internet usage, AIS will provide two main choices of services: its mobile-Internet portal Mobilelife.co.th as a flagship app store, and embedded applications coming in handsets.

 "Smart phones and mobile Internet this year are expected to grow steeply. We will see a lot more smart-phone devices on the market at affordable prices and a greater use of social-networking websites like Facebook.com. These will be the key driving factors to increase usage," Pratthana said.

DTAC's chief commercial officer Thana Thienachariya said mobile operators would have to differentiate themselves from their competitors and focus more on data and services while maintaining voice revenue. DTAC is planning to focus on delivering smart phones this year, along with services designed to customise phones for micro-segment groups of consumers.

"We are gearing up for the smart-phone market under the DTAC brand. Since this market needs more services and market education, we plan to set up a specific team to provide consultation and services for smart-phone users," Thana said.

 Growth confirmed

According to Kasikorn Research Centre, smart phones are the key to driving growth in Thailand's mobile market. It is expected that the total mobile-phone market in Thailand will grow by 11.5 to 17.5 per cent in 2010, to about 10 million units worth between Bt53 billion and Bt58 billion.

Smart phones - the highest growth segment - are expected to rise from 25 per cent of the market last year to 33.2 per cent this year. At the same time, traditional mobile phones are expected to drop from 63.3 per cent of the total market to about 54.2 per cent. The rest are personal digital assistant (PDA) phones.

KResearch's forecast is similar to that of International Data Corporation (IDC), a global research giant that expects smart-phone penetration to continue growing from only 12 per cent of the total mobile market in 2008 to 24 per cent in 2014.

The research firm also forecasts that Thailand's mobile-data market will grow continuously at a compound annual rate of 34 per cent until 2013. Mobile data usage last year grew by 176 per cent.

This forecast is attracting more mobile-phone manufacturers to launch new smart-phone models on the Thailand market this year to catch a share of the big demand.

 Manufacturers ready

Research In Motion (RIM), the Canadian mobile manufacturer of BlackBerry phones, plans to introduce more new models of its famous smart phones on the Thailand market.

 RIM Southeast Asia's managing director Gregory Wade said that Thailand and the Southeast Asia region were important markets for RIM, and the company was prepared to invest more to keep its success momentum rolling. Even though he denied RIM would bring all of its BlackBerry models to the Thai market, he said it would continue to introduce new models throughout this year with greater features for mobile Internet and mobile data. 

More smart phones on the market will means more use of mobile data and mobile Internet.

Nokia Thailand's general manager Shumit Kapoor said that even though Nokia was focused on all mobile-phone market segments, his company was most concerned with the smart-phone segment. Its new models were offering solutions and services such as messaging, e-mail and navigation in order to allow mobile users to experience more mobile-phone applications, rather than simple voice-call usage.

"This year we will spend more on marketing Nokia's products and services, but I cannot reveal the amount. Thailand is very important for Nokia in the Southeast Asia region," Kapoor said.

HTC Thailand's country manager Nattawat Woranopakul said the smart-phone market was expected to grow by at least 40 per cent this year. The market will be "very active" as all parts of the ecosystem, from mobile operators to handset manufacturers and application developers, will set up flagships to take advantage of the high growth market.

"HTC will continue to release new models with smart features to the Thai market. We will introduce three or four models in the first half of this year and we intend to create new market segments," he said.