BMI View: Following the 4G spectrum auctions in late 2015 and the re-auction in May 2016, competition
in the telecoms sector has been fiercer than ever. Efforts to migrate 2G subscribers to 3G and 4G networks
have led to increased costs from marketing expenses and handset subsidies, and this has been reflected in
operators' Q216 financials with DTAC experiencing an 89.7% y-o-y fall in net profits and True drawing a
net loss for the quarter. While the licensing of spectrum through auctions has incentivised operators to
speed up service development and network rollouts, the lack of regulator independence and a political
agenda in telecoms will continue to weigh on the industry, and this could be aggravated by the
establishment of the new Digital Economy and Society Ministry.
Latest Updates And Industry Developments
? Jas Mobile failed to generate the estimated USD2.1bn required for the first instalment of the 4G
spectrum licence it won last year. DTAC and True have walked away from the auction and AIS became
the receiver of the spectrum block at Jas's winning bid. The failure of Jas to enter the market will ensure
that competition amongst the three incumbent players will heat up.
? Total mobile subscriptions have rebounded to 86.54mn in Q116 after falling for three consecutive
quarters in 2015 as a result of the compulsory SIM registration drive which lasted till August. This
figure still represents a 7.4% reduction from Q115 figures. However, a notable effect was the
resulting rise in 3G/4G subscriptions as a percentage of total mobile subscriptions to 95%, from 85%
a year earlier, and we forecast total 3G/4G subscriptions to reach 86.6mn by end-2020.
? Despite the focus on the mobile sector this year, latest fixed broadband subscription data from the
regulator has shown a strong continuous growth in subscribers, to 6.4mn in Q116, y-o-y growth of
14.3%. We believe this steady increase will continue into 2016, reaching 6.85mn by the year-end.