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SOLVE THEM
ISSUES IN THAILAND
PRESENTED AT
PRESENTATION BY
ALLAN RASMUSSEN
2560
THAILANDS TELECOM MARKET AN UNLEVEL PLAYING FIELD
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Without some form of regulatory measures and changes as described in this presentation, Thailands telecoms market will remain an unleveled playing
field, where competition and innovation of mobile services, and thereby the digital economy, may not evolve as it should - or at all.
The government has provided the platform for private industries to participate and form the final stages of Thailand 4.0 however the current regulation
from NBTC - or lack off, has not been able to follow suit but only concentrated on the existing silos in the market instead of getting all the wheels to spin.
Luckily, most of the issues evolves around issues created by NBTC itself i.e. home made quick fix paragraphs, lack of action, or lack of knowhow by the time
MVNO was introduced, which demands less effort to solve.
MVNOS IN THAILAND WHY IT FAILED
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In 2009 five MVNOs where given a license by the telecom regulator NBTC to operate as MVNOs on the state enterprise telecom operator TOT
AS OF NOVEMBER 2017
ONLY 1 MVNO IS LEFT
i-Kool 3G (Loxley)
In 2016, The Inspection and Evaluations Commission (also known as the Superboard) of the National Broadcasting
and Telecommunications Commission (NBTC), failed the telecom regulator and concluded that:
nothing
Pronoun
not anything; no single thing.
Adjective
having no prospect of progress; of no value
BUT CONTINUES TO SELL MVNO LICENSES
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51 COMPANIES
HAVE OBTAINED A MVNO LICENSE IN THAILAND
ONLY 9 HAVE LAUNCHED 5 ARE STILL ALIVE
MVNOS, ARE AN INTEGRAL PART OF THE GLOBAL MOBILE LANDSCAPE
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Over the past 18 years, MVNOs have helped stimulate competition With a predicted compound annual growth rate (CAGR) of over 10% in
in the mobile market, launching innovative tariffs and services and the forecast period to year 2020, the Asia Pacific region is home to the
attracting niche consumer segments at a lower cost than mobile worlds fastest growing MVNO sector, even more than the highly
network operators (MNOs). In Europe virtually every cable and competitive MVNO markets of Europe and North America.
fixed-line operator has a mobility strategy, largely based on MVNO Grand View Research
TODAY, MVNOS HAVE REACHED 214 MILLION USERS WORLDWIDE, AND IS ESTIMATED TO GROW TO 300 MILLION USERS AND A $70 BILLION VALUE IN 2020
Overall connection growth for mobile phone service around the world was Ovum predicts that nearly 24% of all new subscriber connections
about 4.5% end of 2015. MVNO connections are growing at about 18% per over the next five years will come from MVNO subscribers.
annum 4 times faster than the average rate for the mobile industry. Although the current enterprise market represents less than
10% of these connections now, they expect it triple to 30%
1000+ INDEPENDENT MVNOS WORLDWIDE By 2020, IDC predicts that 30% of the top 500
MVNOS INCREASED 70% BETWEEN 2010 AND 2015 companies in Thailand will see the majority of their
72 COUNTRIES HAVE MVNOS IN OPERATION business depend on the ability to create digitally-
MVNOS ACCOUNT FOR 14% OF THE TOTAL EU MARKET
enhanced products, services and experiences
EUROPE IS HOME TO: 595 MVNOS, APAC: 137, US: 111
1 OUT OF 10 PEOPLE IN AUSTRALIA IS A MVNO CUSTOMER
Source IDC Thailand
AND HAVE DELIVERED
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THE RATIONALE FOR THE INTRODUCTION OF MVNO, INCLUDE - BUT ARE NOT LIMITED TO:
Stimulate competition,
Efficient utilization of network resources,
Introduce new or better services aligned to lifestyle propositions currently unserved/underserved,
Promote investment opportunities for local and international businesses in the telecom market.
Consequently, MVNOs are intended to support innovation, bridge digital divide, and contribute to the growth in the ICT sector to
ensure the achievement of the broader industry and DIGITAL ECONOMY OBJECTIVES.
meanwhile in Thailand
THAILANDS TELECOM ECOSYSTEM
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In Thailand the MNOs are: AIS, CAT Telecom, DTAC, TOT and TRUE
MOBILE NETWORK OPERATORS OWN THE INFRASTRUCTURE
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AND LICENSE THE SPECTRUM
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FROM THE NATIONAL TELECOM REGULATOR (NBTC)
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NBTC
THE 900/1800/2100MHz SPECTRUM LICENSES STATES 10% OF THE CAPACITY MUST GO TO MVNOS
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10%
MVNO
HOWEVER IN THAILAND ONLY CAT TELECOM AND TOT HOST MVNOS
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MVNO
HOW MVNOS CONNECT: MVNOS CAN CONNECT TO MNOS DIRECTLY
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MNO MVNO
MVNO
MVNOS CAN CONNECT TO MNOS THROUGH A MVNA
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MVNO
MVNOS CAN CONNECT TO MNOS THROUGH A MVNE
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MVNO
MVNOS CAN CONNECT TO MNOS THROUGH A MVNE/MVNA
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MVNO
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PROBLEM #1 IN THAILAND
THE MNO TRIANGLE
MYSTERIOUS CIRCUMSTANCES - THE BERMUDA TRIANGLE www.yozzo.com
Bermuda
Puerto Rico
MYSTERIOUS CIRCUMSTANCES - THE MNO TRIANGLE IN THAILAND www.yozzo.com
Prior to Thailands 2100MHz 3G auction in 2012, the NBTC released the following Criteria and Procedure for the Spectrum.
16.5.1 The Licensee shall provide telecommunications network service with the minimum
capacity of 10 percent of its networks to the MVNO who is not the Connected Person in
the Shareholding Structure with any licensee when receiving such service request
As with the 2100MHz spectrum, the NBTC has also added a MVNO clause in the terms for the 900MHz and 1800MHz licenses (2015/2016)
(1) The Licensee shall comply with the Commissions Notification Regarding Mobile Virtual Network Operator Service 2013.
(2) The Licensee shall provide telecommunications network service at least 10 percent of its networks capacity to MVNO(s) that
is/are not the connected person(s) with any licensee under this Notification, upon receiving such service request.
1. The NBTC should publish a clear policy statement requiring the telecom network operators to provision MVNOs on their network.
2. The NBTC should exercise its regulatory mandate to monitor the market and the negotiations to ensure that mobile network operators conduct
negotiations fairly and in good faith - and that the policy objectives of the mobile market are fulfilled.
3. The detailed terms and conditions of MVNO provisioning should first be left to the parties to negotiate on a purely commercial basis
4. It would be in the public interest for the NBTC to intervene, and assist the parties - or if necessary, settle and resolve in case a mobile network
operator is acting in bad faith, engaging in any form of anticompetitive conduct, or if, after a reasonable period (1 months) of in-good-faith
negotiations, a commercial agreement cannot be reached between the parties.
5. The NBTC should follow up on a monthly basis to see if there is a progress in on-boarding MVNOs, and take measures if not.
In addition, and as a last resort only, if no progress is made - a regulatory mechanism allowing the NBTC to intervene, to:
Ensure fair and reasonable terms for access
Safeguard fair and non-discriminatory competitive behavior
Bring parties to the negotiating table at the earliest opportunity
Introduce and safeguard the principle of in-good-faith commercial negotiations.
i.e., the mobile network operator shall enter into a wholesale agreement with the MVNO, within a period of 1 months from the date of issuing a Letter
of Intent (LoI) or Memorandum of Understanding (MoU) and submit a copy of the same to the NBTC (licensor).
NBTC would have the power to intervene in the agreement if deemed necessary by one of the parties.
The Regulations/Directives/Orders of NBTC in this regard would be binding on the telecom network operators and the MVNO.
NO MVNO NO LICENSE
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The NBTC has been very active in making sure that terms and conditions, such as minimum roll out
coverage, license payments, maximum retail pricing, etc. has been followed by the 900/1800/2100MHz
auction winners, while zero attention - nor consequences has been given regarding the MVNO capacity.
PROBLEM #2 IN THAILAND
NO FULL MVNO
NO FULL MVNO IN THAILAND = NO CONTROL OF THEIR OWN BUSINESS
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TYPES OF MVNOS AND OPERATING MODELS
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MVNO types, e.g. branded reseller, thin, medium, or full MVNOs, are defined by which of the
operational components the MVNO manages, and which one the network operator or MVNE manages.
MNO Functions Carried out by MNO MVNO Functions carried out by MVNO MVNE Functions carried out by MVNE
APP. CUSTOMER CUSTOMER CUSTOMER SIM & VOUCHER SALES & HANDSET
MNO NETWORK
& SERVICES ACTIVATION BILLING SERVICE
MARKETING
DISTRIBUTION MANAGEMENT
MANAGEMENT
BRANDED RESELLER MNO MNO MNO MNO MNO MVNO MNO MVNO MNO
SERVICE PROVIDER MNO MNO MNO MVNO MVNO MVNO MVNO MVNO MNO
ENHANCED MVNO MNO MNO MVNO MVNO MVNO MVNO MVNO MVNO MVNO
FULL MVNO MNO MVNO MVNO MVNO MVNO MVNO MVNO MVNO MVNO
MVNE MNO MVNE MVNE MVNE MVNE MVNE MVNE MVNE MVNE
MNO = Mobile Network Operator MVNO = Mobile Virtual Network Operator MVNE = Mobile Virtual Network Enabler
FULL MVNO = CONTROL OF OWN BUSINESS AND FLEXIBILITY TO PROVIDE INNOVATIVE SERVICES
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HLR/HSS
SMSC
A Full MVNO has complete control over its operation, data, SIMs, customers and services due
to certain core network elements such as:
MMSC
GGSN
MVNO POSITIONING
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INNOVATIVE
IoT/M2M
MVNOs
MVNOs based on
value addition
SERVICE OFFERING
As a FULL MVNO the MVNO
can have control over services
they can offer in the market,
and thereby the flexibility to
innovate and compete on new MVNOs based
service offerings in the market on convinience
Traditional
No frills Mobile Operators
MVNOs
MVNO
6 Ethnic MVNO wants to launch 2 Travel & Leisure MVNO needs to urgently
mothers day promotions before MVNO MVNO resolve customer billing disputes before start
competitor launches its promotions of Songkran holiday season tomorrow
5 Retail MVNO wants to provide extra 3 Retail MVNO wants to access its user usage
bonus points in loyalty program to drive data) to better address the needs and wants
sales this weekend MVNO MVNO of its own customers
MVNO
This is how it works today in Thailand if MVNOs want to introduce new promotions, service - or tackle issues
INNOVATIVE
Traditional
Mobile Operators
THE SOLUTION
Allow Full MVNOs (like in other markets), to level the playing field,
foster innovation and competition for the benefit of the consumers
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PROBLEM #3 IN THAILAND
DOUBLE / TRIPLE LICENSE FEE
UNFAIR DOUBLE LICENSE FEE HURTING THE MVNO AND CONSUMERS
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In 2009 the NBTC introduced Mobile Virtual Network Operator (MNVO) license along with a license fee scheme up to 1.5% of yearly revenue.
However, the setup of the license fees causes the burden to be pushed to the MVNOs and consumers, as the NBTC is charging double fees on one signal.
Example: Example:
The operator sells THB 100 worth of voice calling to The MVNO sells the now THB 105 worth of voice
the MVNO which is THB 100 + 5% fee = THB 105 calling to customers. THB 105 + 1.5% fee = THB 106,57
OPERATOR MVNO
Un-level playing field as the As the host operator and MVNO each have to pay the
operator can sell directly to license fees of annual revenue, the same mobile
customers for just THB 105 signal (voice/sms/data) ends up having double the
vs. the MVNOs THB 106,57 tax, when it ends up at the MVNO and its customers.
Voice Call 1.50% License Fee New Voice MVNO New Voice
Cost + 3.50% USO Fee
Total 5%
= Call Cost + License Fee = Call Cost
Total 1.5%
THB 100 THB 105 THB 106,57
REGULATOR
2 x 1.5% License Fees (MNO+MVNO = 3%
1 x 3.5% USO Fee (MNO) = 3.5% TOTAL = 6.50%
UNFAIR TRIPLE LICENSE FEE HURTING THE MVNO AND MVNA
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In 2009 the NBTC introduced Mobile Virtual Network Operator (MNVO) license along with a license fee scheme up to 1.5% of yearly revenue.
However, the setup of the license fees causes the burden to be pushed to the MVNA, the MVNO and consumers, as the NBTC is charging triple fees on one signal.
As the MNO, MVNA and MVNO each
have to pay the license fee, the same
mobile signal (voice/sms/data) ends
up having triple tax, when it arrives at
the MVNOs and the consumers
The operator can sell Voice Call 1.5% License Fee New Voice MVNA New Voice MVNO New Voice
directly to customers Cost + 3.5% USO Fee = Call Cost + License Fee
Total 1.5%
= Call Cost + License Fee
Total 1.5%
= Call Cost
for just THB 105 vs. the THB 100 Total 5% THB 105 THB 106,57 THB 108,17
MVNOs THB 108,17
REGULATOR
3 x 1.5% License Fees (MNO, MVNA, MVNO) = 4.5%
1 x 3.5% USO Fee (MNO) = 3.5% TOTAL = 8%
MVNOS MAKES ITS BUSINESS ON MARGINS
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MVNO
The unfair double, and triple taxation changes the
MVNOs makes its business on the
timeline significantly for the MVNO to reach financial
small margins between costs and sale
breakeven if ever - given that the current fee
price. They operate a lean and flexible
structure setup not only adds costs, but also provides
setup where every satang counts.
the mobile operators with an unfair pricing advantage
VS.
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THE SOLUTION
Let the MNO and MVNO (MVNA) split
the 1.5% license fee like we do with VAT
i.e. MNO 0.75% and MVNO 0.75% = 1.5%
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PROBLEM #4 IN THAILAND
BUREAU-CRACY KILLING INNOVATION
MVNO LICENSE APPLICATION IS IN-CORRECT AND NOT UP-TO-DATE
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FILL-OUT & HAND-IN THE APPLICATION NBTC OFFICER HAS TO UNDERSTAND & APPROVE
NBTC has added their own little notice to the act regarding license approval.
The NBTC officer can decline the application if he/she doesn't understand, either due to language, the service, network etc.
LICENSE APPLICATION BUREAU-CRAZY
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HOWEVER
The NBTC officer will not uderstand new innovative service from the MVNO and decline it
because he/she is responsible, and it does not fit the boxes. Therfore all MVNOs are the same
in Thailand - even MVNAs have to use the MVNO application form which makes no sense
?
BUREAU-CRACY KILLS INNOVATION AND OPENS FOR CORRUPTION
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Because
HOW?
GETTING A LICENSE WITHOUT AN AGREEMENT HOW?
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Question: How does a MVNO without a host operator agreement fill out 9,10, 11, 12?
Answer: They fill in ALL operators as example and use a network diagram from the 90s
THE SOLUTION
Update the license application to the present and amend it from time to time.
Drop the added clause that the officer has to understand, approve and be responsible.
There is no reason to provide a license prior to an agreement with a MNO/MVNA/MVNE.
Introduce a real MVNA license application = do not use the MVNO application its not the same.
DISCLAIMER
Some statements made in this material are forward-looking statements with the relevant assumptions, which are subject to various risks and
uncertainties. These include statements with respect to corporate plans, strategies and beliefs and other statements that are not historical
facts. These statements can be identified by the use of forward-looking terminology such as may, will, expect, anticipate, intend,
estimate, continue plan or other similar words. The statements are based on our assumptions and beliefs in light of the information
currently available to us. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to
be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Please
note that the company and executives/staff do not control and cannot guarantee the relevance, timeliness, or accuracy of these statements.