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Thai telcos talk about the chat app era (INTERVIEW)

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We’ve noticed the trend of chat apps becoming more and more popular in Asia. It’s basically destroying SMS in India as Indians now only send 2 SMS per day. And there are over 18 million Line users in Thailand who constantly using this app to send messages and stickers to each other, plus 24 million Facebook users, who can use Facebook chat instead of SMS.

I can’t help but wonder if these numbers worry telco companies as now they can lose money from their main revenue generators – voice calling and SMS. I reached out to the three main telcos in Thailand asking for their opinions on this. My question to all of them was the same “With the growing popularity of chat apps, which on one hand increase the data usage of your customers, but on the other hand, definitely affect the revenue from SMS and voice calling, what’s your take on this?”

Here are their responses:

DTAC

Pakorn Pannachet, Dtac VP of marketing:

The potential growth in data is much higher than the potential drop in voice and sms revenue. The SMS revenue is not big in Thailand therefore the impact is very minimal. For voice calling, certainly there will be impact but it will be gradual which will allow us to adjust to the needs accordingly. In addition, the number of data connections needed will be much more than number of voice connections needed. Imagine one customer normally need one voice connection but he/she will need one data connection for phone, one for tablet and in the future one connection for all the “internet of things”.

He also added:

Voice will continue to be majority of our revenue in the foreseeable future, therefore we will not forget about voice. Our strategy on data has been solid, ‘Internet for All’ is our key strategy on data for today and the future. Data is our future.

AIS

AIS’s assistant vice president for wireless business marketing Prattana Leelapanang:

I have to accept there’s an affect. We can see it in the big drop of usages in SMS among our customers. I believe, in the future, SMS service will go extinct because the trends of the data usage is really strong. It’s a global trend, not only in Asia. However, if we look specifically into the Thai market, that will not happen just yet. This trend relies mostly on smartphone penetration rate (There were 14 million smartphone users in Thailand as of Q4 2012). For AIS, the SMS service will continue for a big while as there is still high demand from customers who use this service.

Thitipong Kiewpaisarn, AIS’s EVP of marketing also commented:

We’re aware there’s a higher demand for using chat applications. Therefore, we’ve shifted our focus to answers those demands and being competitive with our data packages. For example, we have a special “Unlimited Chat Roaming” package for customers who travel abroad. This package was created specifically to answer the question of higher need of being connected through a chat app while travelling.

True

Kirana Cheewachuen, ‎deputy director for wireless content and apps at TrueMove and TrueMove H:

The growth of smartphones this year definitely has a big affect on mobile internet. We’ve noticed the increase in usages of application over voice or SMS. The app that is being used the most among our customers is Line, which has a significant growth comparing to last year. However, SMS is still being used among customers with feature phones. The revenue we generate from SMS service has dropped about 18 percent this year, but the revenue from SMS that related to promotion and advertising is still continuously growing.


From these answers, it seems like the telcos agree with me: the chat app era is here. However, being big telcos as they are, they are pretty much prepared for this. I, for one, have no complaints about this. As they’ve become more aware of how big the data demand is, the more effort they have to put into creating better data services. That’s definitely a win for customers, like myself.

(Editing by Charlie Custer)



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