Duopoly Dominance and Regulatory Failure Throws MVNOs Into Crisis

NT’s spectrum license in 850MHz, 2100MHz and 2300MHz is nearing its end and must be returned for reallocation according to the National Broadcasting and Telecommunications Commission (NBTC). This development poses a serious threat to the mobile virtual network aggregator (MVNA) and MVNOs who are reliant on network capacity from host operators.

For more than a decade, industry experts, MVNOs, and various organizations have criticized the lack of willingness by the two dominant network operators (AIS and TRUE) to onboard MVNOs. This directly contradicts NBTC regulations that mandate mobile operators to provide at least 10% of their spectrum capacity for MVNOs. Moreover, the regulator (NBTC) has consistently failed to effectively enforce its own rules in this regard. As a result, the industry now faces a crisis that was predicted and warned about for years.

Here on Yozzo we have repeatedly highlighted the structural challenges that MVNOs face in Thailand:

1. Limited Access to Network Infrastructure: AIS and TRUE have been reluctant to offer network access agreements, obstructing MVNO and competition in the market.
2. Uncompetitive Wholesale Pricing: MVNOs who have managed to get a meeting with AIS/TRUE has then been meet with outrageous wholesale rates from AIS/TRUE that makes it impossible for the MVNOs to operate their business.
3. Lack of Regulatory Enforcement: Despite clear regulations requiring AIS/TRUE to provide access to MVNOs, enforcement has never happened, allowing the duopoly to dominate the market and sideline smaller operators.
4. Lack of Regulatory Enforcement on the TRUE/DTAC Merger: The NBTC introduced a set of conditions when DTAC was “sold” to TRUE, these condition include that TRUE must setup their network for MVNOs and must onboard MVNOs on it’s network. The deadline for this was 650+ days ago. None of these conditions have been enforced by the NBTC.
5. Preference for Vertical Integration: Both AIS and TRUE have historically preferred to control their own brands and services, leaving zero opportunity for MVNOs on their networks.

For more than a decade, these issues have stifled innovation and competition in the Thai telecom sector, preventing MVNOs from delivering innovative, competitive services and a choice to customers. This has placed undue reliance on NT’s spectrum as the only operator hosting MVNOs, which is now expiring, exposing the vulnerabilities of Thailand’s telecom ecosystem.

A year ago (December 2023), Dr. Saran Boonbaichaiphruek, Chair of the National Broadcasting and Telecommunication Commission (NBTC), revealed 9 urgent policies that was to be accelerated in 2024, to increase and help facilitate options and services for the people in the country and break market dominance.

Among the 9 policies assigned was:

• The creation and promotion of a easy-to-connect MVNA/MVNE platform to enable and support MVNOs into the market.
• The acceleration and implementation of “One Region, One MVNO” by 2026, with the goal of adding at least seven regional MVNOs in the market to increase options and services for the people.
• Reduce rates of the regional MVNOs by at least 20% from the plans of the duopoly.
• Out-of-area rates and interregional fees that suits the cost of living in that region, with conditions that makes sure the two large mobile network operators cannot own more than 25% of shares in a regional MVNO.

Dr. Sarana Boonbaichaiyapruck, was also speaking at the MVNOs World Congress 2024 in Brussels, Belgium where he said that Thailand is welcoming – and are ready in terms of telecom, regulation and digital infrastructure to support business operations for all forms of MVNOs to do business in Thailand.

The MVNA/MVNE “MVNO Services Co., Ltd” has setup and invested into the business, in line with the above – but similar to the MVNOs, it also needs access to the operators.

We asked A-Telecom, a yet to launch MVNO who received its MVNO license from the NBTC is 2023.

Have you had any conversations or signed any wholesale agreements with AIS or TRUE?

“We have had conversations with some MNOs,” says Ativat Asvasirayothin, Chair of A-Telecom.

In case you have meet with AIS or TRUE how long time have you been meeting/waiting for them?

“Around 3-4 months”

We can see from the minutes of meeting at the NBTC that you asked them for support, and after about a month the NBTC then sent a letter to a MNO?

“Yes, we asked the NBTC to provide support”.

What are your plans regarding host network partner for A-Telecom?

“We are working towards the finalization of commercials with some MNO and anticipate to sign the wholesale agreement within 1-2 months from now.”

The MVNO Redone has also been in talks and negotiations with TRUE to transition its operations from NT to TRUE’s network. But while TRUE has expressed “openness to accommodating MVNOs”, it has so far just been talks and delays and nothing has materialized for months on this.

This rhetoric of “openness to accommodating MVNOs” is particularly intriguing given two crucial factors:

1. Regulatory Obligations: TRUE’s licenses explicitly mandate the company to provide capacity to MVNOs, a legal obligation it cannot simply ignore.
2. Merger Conditions: More importantly, TRUE has been under a regulatory order for over 650 days to open its network to MVNOs as a condition of its merger approval. This legally binding condition further underscores the urgency and necessity of fulfilling its commitment

Redone is a successful Malaysian MVNO with more than 1 million customers in Malaysia. However, its operating results in Thailand exemplifies the sector’s challenges. Operating since 2019, the company has faced persistent losses despite increasing revenues:

2019: No income, loss 89,852 baht
2020: Income 1,305,177 baht, loss 4,762,479 baht
2021: Income 7,280,708 baht, loss 65,163,808 baht
2022: Income 12,008,897 baht, loss 90,966,920 baht
2023: Income 23,899,641 baht, loss 128,891,810 baht

The expiration of NT’s spectrum licenses significantly affects at least 20 Mobile Virtual Network Operators (MVNOs) and aspiring MVNO license holders. These companies, ranging from small startups to larger enterprises, have invested in technology, marketing, educating local talent, and contribute to the economy through tax payments and fees to the NBTC – yet they are unable to operate their business despite fulfilling the requirements of their licenses.

The lack of access to the networks of the two largest players has severely limited the growth of the MVNO sector in Thailand. This has resulted in a market characterized by limited consumer choice and higher prices.

The NT spectrum crisis underscores not only the urgent need for a transition but also highlights the systemic anti-competitive practice that have hindered the investment and growth in Thailand for years.

While the government is trying to attract foreign investment into the telecom and adjacent sectors, the regulator is going in the opposite direction, getting ready to further solidify the power of the duopoly this year by holding a spectrum auction just for AIS and TRUE.