Thailand is missing out on the mobile broadband boom because the lack of any clear authority by the regulator to set 3G auctions has created a gap in the market.
"Thailand is missing out in enjoying the advantage of 3G services," said True group CFO Noppadol Dej-Udom.
He noted that the country has only about seven million fixed lines and less than three million of those can handle broadband. So 17 million of the country's 20 million households don't have access to broadband. "This is very bad for the country. The quickest and easiest way to introduce broadband in those areas is through 3G," he said.
Its recent acquisition of Hutchison Thailand gives True 800,000 subscribers, but more importantly 10 MHz of spectrum in the 850-MHz band. So with its existing 5 MHz in the same band it will have 15 MHz. True will upgrade the frequency for 3G this year and has enabled CAT to stop losing money on the previously high interconnect charges from Hutch.
"This will give True first-mover advantage in the Thai market where people have been waiting not only for data service but for high-speed wireless data service," he said.
The new arrangement, Noppadol said, is structured according to the new telecom law and can be sustained in the future. "We no longer have a concession type of arrangement for the Hutch deal, but of course True Move, AIS and Dtac are still imprisoned in that concession arrangement."
Casting a shadow on the deal, Dtac last month filed a suit seeking a judicial review of the deal it said was anti-competitive.
To raise ARPU on broadband services True started trials at the end of last year of Docsis 3 cable-modem technology, which offers speeds of up to 400 Mbps per home. True launched the service with a minimum speed of 10 Mbps and a maximum speed of 100 Mbps in March. Noppadol said it can now compete head-to-head with DSL providers that offer a maximum speed of 8 Mbps.
The company added 122,000 broadband users last year and had just over 800,000 subs at the end of 2010. Less than 20% of users are outside the Bangkok metropolitan area, but Noppadol said that will change this year with the launch of nationwide coverage with Docsis 3. By the end of the year it aims to cover 26 cities and will invest some 9.5 billion baht ($312 million) over the next three years.
He explained that the primary use of hybrid fiber coaxial (HFC) networks is for pay TV, which is what True plans to offer in addition to broadband service. The HFC network gives it the ability to offer almost an unlimited number of channels, including high-def offerings.
The operator's pay-TV arm, True Vision, can now show advertisements and last year, the first full year ads were allowed, it had 500 million baht ($16.6 million) in ad revenue. "This is very small compared to the 100-billion-baht ad market. But it's a start and we've learned to be a lot more aggressive in pricing, and we've had to break up the programs to be able to add more premium rates," he said.
Of the 26 channels produced by True Vision, eight are in the top 10.
On the mobile side True added 1.3 million subscribers last year and now has a 24.5% market share with 17.1 million subs. ARPU increased marginally after bottoming out the previous year. The increase is a result of True focusing on higher-value subscribers.
Noppadol claimed True was the only player to add post-paid users last year and take advantage of the expanding smartphone market. The tradeoff was that its prepaid base didn't expand as quickly as many users shifted to AIS and Dtac as the industry faced yet another price war in the third quarter, particularly on on-net pricing.
The company has long pushed bundled packages and now has more than one million subs using True Mobile and True Vision and about 300,000 using both broadband and paid TV. But it's now expanded the range of bundled packages, looking to deliver seamless service across mobile, fixed broadband and paid TV as well as looking at giving customer higher speeds when they demand it, said Adhiruth Thothaveesansuk, managing director of its convergence group.
While revenue from its fixed-line operations continued to decline, Noppadol noted that the rate of decline was slowing.
He said that overall revenue was stable but EBITA fell due to its spending to fight off the price war.