Growing MVNO interest in Thailand

Thailand is seeing a growing interest in Mobile Virtual Networks Operators (MVNOs)

According to Kitisak Sriprasert, CEO at CAT Telecom, there is a growing interest in becoming an MVNO in Thailand. A handful of retailers, handset distributors and one insurance firm have approached CAT Telecom to become MVNOs.

Central Group, Thailand’s largest retail conglomerate as well as Tesco Lotus, was among the names announced in local news yesterday, as being in talks with CAT Telecom to provide MVNO service on the state enterprise network.

Kittisak Sriprasert, said there were at least five companies now asking to lease the airtime of CAT Telecom’s 3G service. “365 Communication and M Link were the first two companies to approach us, and deals with them are expected to be finalized this year”. He told Bangkok Post. Another company that has approached CAT to make a similar MVNO deal is an insurance firm, he added.

Central Group as possible MVNO in Thailand
Central Group as MVNO in Thailand
Central Group as MVNO in Thailand

Central Group is a family-owned conglomerate holding company in Thailand it operates:

5 Department store chains: Central Department Store, ZEN, Robinson, La Rinascente and Illum, in Thailand, China, Italy, Indonesia and Denmark.

3 Supermarkets chains: Tops, Central Food Hall and SuperKhum.

1 Convenience store chain: FamilyMart Thailand.

8 Specialty retail stores chains: PowerBuy – Electronics store, SuperSports – Sports store, B2S – books, entertainment and stationary store, homeWorks – home improvement and D.I.Y. center, OfficeMate – office products and supplies store, Thai Watsadu – home hardware and improvement store for builder, Page One – international bookstore chain, Home Department Store – upscale department store for home improvement.

7 Franchise/Licenses specialty retail stores chains: Watson’s – healthcare and drugstore, Marks & Spencer – British’s department store chain, Muji – Japanese’s household and consumer goods shop, Uniqlo – Japanese’s fast fashion store, Build-A-Bear Workshop – D.I.Y. teddy bears and other stuffed animals shop, Sanrio – shop of Japan license products of Sanrio, Komonoya – Japanese’s 100-yen shop chain by WATTS Japan.

Mr Kittisak said the retail giant wants to lease CAT’s bandwidth under a mobile virtual network operator (MVNO) model to add value to its retail business and plans to bundle a mobile promotional packages with Central Group’s loyalty and privilege program for its retail stores and B2S bookstores. The program may also cover the Central Department store credit card and the Robinson 1 Card.


Tesco Lotus as possible MVNO in Thailand
Tesco Lotus MVNO Thailand
Tesco Lotus MVNO Thailand

Tesco Lotus started as Lotus Supercenter chain in 1994 by the Charoen Pokphand Group (CP All, True Corporation, 7-Eleven master franchise in Thailand) with the first store opening in Seacon Square. In 1998. The British supermarket chain Tesco took a stake in the company to create “Tesco Lotus”. CP Group sold most of its shares in 2003.

MVNO is not a new concept for the European part of Tesco Lotus, Tesco Mobile, is one of the most popular and successful retail branded MVNO’s in Europe operating in the UK with 3.2 million customers, Ireland (100,000 customers), Slovakia and Hungary.

In May 2013 Tesco Mobile announced it will open in the Czech Republic as well. Tesco Mobile is operated by Tesco, using the O2 network as its host operator except in Hungary where the host operator is Vodafone.

However, Tesco Lotus is a hypermarket chain in Thailand operated by Ek-Chai Distribution System Co., Ltd and has no prior history of running an MVNO.


M Link as possible MVNO in Thailand
M Link as possible MVNO in Thailand
M Link as possible MVNO in Thailand

M Link Asia Corp PCL wholesales and distributes telecommunications equipment and mobile phones from suppliers including Motorola and Alcatel. The Company also provide after sale services on mobile phones through its M-Link Service Centers.

M Link’s President, Directors, and Executives, include daughters, sisters and nieces to two of Thailand’s former PM’s Somchai Wongsawat and Dr. Thaksin Shinawatra, who founded Thailand’s largest mobile operator Advanced Info Service (AIS).


365 Communication already an MVNO in Thailand
365 Communication MVNO in Thailand
365 Communication Is already operating as a MVNO in Thailand

365 Communication is one of the original five Bangkok MVNOs operating under an agreement with the other state-run operator, Telephone Organization of Thailand (TOT).

365 Communication has around 10,000 active subscribers on TOT’s 3G network. According to CAT Telecom, 365 Communication plans to provide a service for up to 300,000 users, and pay CAT THB 300 million ($10 million) a year under the deal.

CAT Telecom’s 3G/850MHz network has total capacity for 17 million users. Currently, Real Move a MVNO subsidiary of True Corp is leasing 97% of the capacity. Real Move has about 3 million users and CAT also uses the network to serve 100,000 of its own customers.


GMM Grammy as MVNO
GMM Grammy as MVNO
Local record company GMM Grammy as a MVNO

Thailand’s entertainment company GMM Grammy Plc. announced back in August 2010 that the company planned to invest THB 1 billion (US$32 million) into a MVNO setup in Thailand.

According to Bangkok Post, Grammy has received a mobile virtual network operator (MVNO) license from the National Broadcasting and Telecommunications Commission and has asked TOT Plc to provide 3G service as host MNO.

Grammy’s CFO, Premon Pinskul was quoted in a Bangkok Post article, in January 2012 for saying:

We plan to become a 3G reseller for TOT, pending the state’s approval. We have no plan to either become a mobile operator or an internet service provider. Our MVNO will only complement the group’s digital music service to increase revenue and streamline business operations.”

The company also notified The Stock Exchange of Thailand that Music Copyright Collection Co., Ltd., a 100% owned subsidiary of GRAMMY had changed its name to “Digital Gen Co., Ltd.” In addition, the subsidiary had added its business objective to MVNO business (Mobile Virtual Network Operator) in order to obtain a license as a service provider in 3G network.

In GMM Grammy’s 2012 annual report, Chairman of the Board of Directors, Paiboon Damrongchaitham mentions that:

2013 will provide a full-fledged 3G technology for which the Company has plans to develop digital content business to be part of its core business, to grow revenue with over-the-top technology (OTT) through 3G service, which can provide services in both image and sound to consumers through all platforms, namely television, tablet, computer and mobile telephone. Currently, the service is being developed in cooperation with foreign business partners. Besides, the Company has a plan to provide exclusive services for fan club members through MVNO system. In all, it is expected that the service will generate strong revenue in mid-2013 onwards“.

Grammy has not yet officially launched any MVNO service as of September 2013.


TOT keen on MVNO partnerships for survival
TOT is keen on MVNO partnerships
The state enterprise operator TOT is keen on MVNO partnerships

TOT has been busy drafting a series of business models for partnerships as part of the state-run enterprise’s bid to continue operating once its concession revenue disappears.

The partnership plans and 17 other survival measures will be submitted to the Information and Communication Technology (ICT) Minister for approval.

TOT is facing the end of all three of its concessions, the mobile concession from Thailand’s largest mobile operator, Advanced Info Service (AIS) will expire in 2015 and two fixed-line concessions from True Corporation and TT&T, will expire in 2017 and 2018.

TOT’s Chief executive Yongyuth Wattanasin said TOT is now focusing on providing network rental services to private firms instead of being a telecom operator.

TOT’s board chairman Udom Puasakul announced in June 2013 that TOT had finalized the details of a new mobile virtual network operator (MVNO) contract with Samart Corp. a TOT source told the Thai newspaper “The Nation”, that Samart will pay 46% of revenues to TOT under the finalized terms, which allow it to utilize up to 40% of TOT’s recently expanded 3G mobile network, the network reportedly has a capacity to serve 7.2 million customers.

The contract expires in 2025 and will be revised every two years. During the first year Samart corp is to guarantee a minimum payment to TOT of THB 476 million ($15.34 million) and THB 597 million in the second year. The new contracts for Samart Corp and the four other MVNOs are designed to replace their previous short-term MVNO agreements with TOT which were agreed in 2009 at the launch of its 3G network covering the Bangkok area only.

In 2009 TOT signed with five Thai MVNOs, Samart i-Mobile, Loxley, IEC Technology, M Consult, and 365 Communications to provide 3G service on the 2100-MHz spectrum which was scheduled for launch in the country’s capital December 2009. TOT committed to allocate 100,000 mobile numbers to each MVNO.

However with the announcement of only ~120,000 combined MVNO subscribers 4 years later (2013) it is safe to say this has not been a success for any of the five MVNO’s or TOT.

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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