2023 marks a decade with zero MVNOs launched on the Big 3 in Thailand

The year of the rabbit marks a decade with zero MVNOs launched on the Big 3 in Thailand

Ten years have now passed since Thailand’s telecom regulator mandated the mobile network operators; AIS, DTAC and TRUE to provide wholesale access to mobile virtual network operators (MVNO), still no MVNO has ever launched

Ten years ago, Thailand finally transcended from its traditional Build-Transfer-Operate (BTO) Concession Regime to a Licensing Regime, with its first spectrum license auction.

As part of the spectrum license terms and agreements, the new national telecom regulator mandated the spectrum license holders, to provide wholesale access to mobile virtual network operators (MVNO) and introduced the “Notification Regarding Mobile Virtual Networks Service B.E. 2556 (2013)”.

NBTC Notification Regarding Mobile Virtual Networks Service in Thailand B.E. 2556 (2013)

…to promote free and fair competition, as well as to promote market entry for small entrants in order to escalate mobile service competition and provide service alternatives to customers.

The Notification requires the licensee (Type III mobile operators and mobile operators under concessions), who is a wholesaler – to treat Mobile Virtual Network Operators (MVNOs) on a fair, reasonable and non-discriminatory basis, and charge can be determined by the agreement between the wholesaler and MVNO on a fair, reasonable, and non-discriminatory basis, as well as must be reasonable comparing with the retail rate paid by the wholesaler’s customers.

In addition, this Notification has also prescribed criteria and procedures for contract negotiation and dispute resolution where an agreement cannot be reached among the licensees.

Despite the official Notification and the license terms and condition, AIS, DTAC and TRUE remained reluctant to open up for wholesale partnerships with MVNOs.

So much so, that claims surfaced of the three operators having a “mutual gentleman agreement” not to be the first to enable MVNOs on their networks, but if one did, the deal was off and the remaining two would immediately follow.

Consultancy firms, brands, retailers and MVNO companies contacting DTAC and mentioning the letters “MVNO”, in their email or telephone call would not receive a reply.

AIS and TRUE could occasionally be persuaded to a meeting but would either end up saying they did not have enough capacity (despite 10% have to go to MVNOs) – or would come back with ridiculous commercial terms, such as maximum 10% margin to the MVNOs.

The Big three’s self-interest caused a collective outcome of resisting MVNOs on their networks, If not the result of a coordinated behavior between the operators, then by deciding individually that MVNO access should be prevented.

The proof of the reluctance is evident from the fact, that no MVNOs have launched on any of the private telecom operators network, despite 10 years since the introduction of the MVNO Notification and the terms and conditions, that minimum 10% capacity must go to MVNOs, in the network operator’s licensing terms.

60+ MVNO licenses awarded

In the years that followed, the NBTC kept selling MVNO licenses like ice-cream on a hot day in Bangkok, to small and big enterprises as well as foreign telecom enterprises setting up or having local entities, i.e. Softbank, BT, NTT DoCoMo, Celom, Axiata. I stopped counting when it reached more than 60 MVNO licenses issued.

MVNOs that did launch, did so on the network of the former concessionaire grantors, CAT Telecom and TOT – two state enterprise telecom operators, who never had to compete in anything themselves to stay afloat.

In the beginning, the MVNOs on TOT showed promising results, achieving more subscribers combined than TOT itself. However, it didn’t take long before the MVNOs faced issues, i.e. lack of investment, due to the lack of creating a unique positioning and value proposition to attract a defined niche segment – having positioned themselves, as a pure copy of the existing operators with no differentiation – just cheaper.

In addition, the host operators doesn’t provide any platform for the MVNOs to monitor, measure or being able to control their own business, causing them to swim totally blind in waters infested with sharks and dinosaurs.

Speaking of sharks and dinosaurs, AIS, DTAC and TRUE were not blind when it came to opportunities with the MVNO model. All three of them obtained MVNO licenses through various subsidiaries to become quasi-MVNOs themselves to use the network of the two state-enterprises, TOT and CAT Telecom.

TrueMove H (TRUE) was actually a MVNO before it was allowed in Thailand, setting up an illegal deal with CAT Telecom to purchase access to and control CAT’s network, in order to provide 3G before the spectrum licenses was a reality. The deal was changed and cleared later when MVNOs was introduced. AIS and DTAC followed and made similar quasi-MVNO setups with TOT, seeing the opportunity in MVNO – as long as it was for themselves.

The Emperor's New Clothes

In 2019 – or around the time where NBTC was awarding its 60’th MVNO license, people started questioning – Where did they go – all these shinny new MVNOs supposed to bring competition and innovative services to the market?

NBTC decided to call for a public hearing and an update to the MVNO Notification, again using the words not heard often, in the Thai telecom sector = free and fair competition, innovation, non-discriminatory.

Weirdly enough, NBTC decided two split the public hearing in to two versions. One for the MVNA and MVNOs – and one for the MVNA/MVNOs and network operators – as if the crack between the two side wasn’t already big enough.

TRUE managed to sneak itself into both of them being both a MVNO and MNO. On the first day (MVNOs), it was all soft and with the yes-hat on. The next day, together with its MNO peers, not so much. NBTC itself had “studied” the wholesale model in another market and spoke about retail minus 30, as the model to look at for Thailand. They failed to mention that the study was based old data from Poland = from when voice calling and ringtones was dominating and data was something with GPRS/WAP.

As usual, despite the high participation and several feedbacks both at the public hearing and the following written feedback – NBTC just went ahead with the revision it had already drafted.

Upon its release, the regulator stated, that the revision to the Mobile Virtual Network Mobile Phone Service Notification B.E. 2556 (2013) was in order to be consistent with the current situation, support free and fair competition and promote fair entry for smaller entrepreneurs, which increases the level of competition in the Thai mobile market and give users an opportunity to access more service.

The new MVNO Notification came into force on July 20, 2020 and boy did that change …Nothing!

NBTC's public hearing on MVNO July 2019
NBTC's public hearing on MVNO July 2019 - saw a large crowd of interested parties over two days

Do You Hear The People Sing?

Ten years has passed since the first MVNO Notification and basically everything else, than what was stated as the intention, in both the old and new MVNO Notification has happened.

CAT and TOT has been merged into National Telecom (NT), thereby further limiting the access to network and wholesale negotiations for MVNOs (from two to one) and TRUE has agreed to swallow DTAC, in what they have nicknamed “an amalgamation” to make it look like an entirely new company called …wait for it…TRUE.

The regulator decided, not decide – but instead opted to acknowledge that someone in the industry they were supposed to regulate, had decided to do what suited them.

With that, the Thai telecom market goes from being an oligopoly to a duopoly with AIS and TRUE sitting on 98% of the market. The NBTC has found some merger conditions on the Internet to use for TRUE’s takeover of DTAC, including that the two parties MUST add MVNOs to their networks…yes, you are right! Exactly the same as the last ten years.

Despite the vague regulation (or lack of), customers are however much more vocal and active than ever before. The request and need for MVNOs has never been bigger – Do you hear the people sing?

More on that soon!

Author: Allan Rasmussen
Managing director at Yozzo. Allan is a MVNA/MVNE/MVNO specialist with hands-on experience from more than 60 projects in both competitive and greenfield markets. His expertise includes business case development, execution, launch and growth strategies. Advisor and consultant to mobile network operators, MVNA, MVNE, MVNO, National Regulatory Authorities, Government Agencies, Broadcast Companies, TMT Industry Associations, Innovation and Investment Banks.
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