Thai MVNO Penguin SIM throws in the towel

The MVNO was launched in March 2016 by a group of former executives from the local mobile network operator DTAC. Target segment in the beginning was factory workers, motorbike drivers and university students.

On its website, Penguin SIM announce that the journey has come to the end of the alley. Customers are advised to change their Penguin SIM to a 4G SIM at a National Telecom (NT) center, where they will receive a similar package or left over credit.

Penguin SIM, positioned itself as a low-cost mobile services, where customers would be charged on the basis of their real usage = per second for voice call and per megabyte for internet use with its main promotion of  less than THB 20 (USD 0.53) per day for maximum mobile data use.

The MVNO entered into a wholesale agreement with one of the two state enterprise operators back then, “CAT Telecom”, as host operator and later it also entered into an agreement with the other state telco, TOT. Both operators have since then merged into National Telecom.

From its launch in 2016 the MVNO reported a solid growth in subscribers with 80% of their total customers coming from the provinces. CEO, Chaiyod Chirabowornkul said the company booked revenue of about THB 100 million (USD 2.65m) in its first year of operations.

2018 started of well and the MVNO expected to reach break-even in the first quarter of 2019, and list on the Market for Alternative Investment a year later.

But in August 2018 Penguin SIM’s subscriber numbers peaked at 600.000 and then fell sharply to under 200.000 in the months that followed and continued to drop over the years, to end with just 25.578 active SIMs end of 2021.

MVNO issues

Despite a solid growth in the first two years of operation it was (and still is) a major issue for the MVNOs in Thailand to follow up on its service offer, marketing and churn. There are no MVNE or platform available from the host operator to the MVNOs in the market and the MVNOs are only allowed to operate as Thin or Medium, thus they are operating in the dark without any control of their own business and data on what works and not.

Due to the background of its founders, the MVNO quickly managed to setup a nationwide distribution of Penguin SIMs including in many rural areas. However this also resulted in large costs (SIMs, printing, distribution, regulatory fees) on SIMs collecting dust in many outlets.

At the time, operators and MVNOs in Thailand would pay THB 2.00,- per mobile number per month to the regulator. Penguin SIM managed to notify the regulator of the fee issues and the fee setup was later amended.

In 2018 Penguin SIM had around 130 employees and operated with an organizational structure of five divisions: Marketing, Branding, Sales, IT and Human Resources. Customer services was outsourced. The setup and number of employees was rather high at such a stage.

Penguin SIM’s initial segment target quickly became a target for some of the operators, including its own host operator (CAT Telecom), who launched packages similar to the MVNO.

Penguin SIM began to spread itself thin, into many other (too many) segments – ranging from teens to elderly, tourists to M2M, startup companies to migrant workers etc., and with the lack of being able to process customer data, its positioning in the market became blurred.

Penguin SIM was one of the four founding members of the Thailand MVNO Club. Together with the three other (now defunct) MVNOs; I-Mobile, 168 Communication and Myworld 3G – operating on CAT Telecom.

The four came together to strengthen their position as MVNOs and to promote an affordable alternative mobile service in the market. Although the club managed to get the regulator to amend the fees on mobile numbers for all operators, the club and regulator never managed to solve the larger issues in the market.

The exit of Penguin SIM comes at a time where MVNOs are on the agenda, as two of the big three telcos (TRUE and DTAC) are looking to merge. The regulator’s new board seem to understand the need for changes in the market (merger or not) and Penguin SIMs exit should only push this topic to the top of the agenda and timeline.

Penguin SIM and the MVNO i-mobile, have actually showed that it is possible to achieve break-even as a MVNO in Thailand, despite a range of barriers. But their exit has also shown that the barriers makes it impossible to maintain the business without a suitable platform.