The launch of new 3G data plans by all three Thai mobile operators will introduce broad changes to the competitive dynamics among mobile operators, particularly in how they deal with the mass market segment, according to research firm IDC.

IDC issued this warning after a review of the price plans and potential market share of the three mobile operators after the release of their 3G service plans.

IDC believes the industry is set for a slew of promotional and pricing competitive pressures in the next six months, possibly resulting in significant churn among the customer base if one of the telco operators does not keep its defenses up.

"Competition will be won first by price, and then by performance," says Neeranuch Kanokvilairat, Senior Market Analyst covering the mobile service market for IDC Thailand. She explains that for white collar workers with the available disposable income, connectivity and tech gadgets are becoming necessities and packages for unlimited data usage plan will certainly prove attractive.

“This is especially true among those who are on mobile social media all day, have high consumption of mobile video traffic, as well as those who are into mobile gaming applications". Neeranuch however stresses that the real disruption will come from the mass market segment. "If telcos can offer a version of unlimited price plans to blue collar workers, students and younger population with lower disposable income, the  'mass market' impact of 3G/data usage in the country will be significant," she says.

Other comments from IDC Thailand:

Unlimited data plans are increasingly less popular across the globe, including the ASEAN region, because of the cost and network pressure they put on telcos. However for emerging markets like Thailand, this is a 'necessary evil' to drive mobile Internet/value-added service (VAS) market forward, creating a much more dynamic consumer market. At relatively low price points, 3G plans will no doubt appeal to white collar workers and those in the middle and upper income classes of the population.

Jarit Sidhu, market analyst for IDC research Thailand says, "The launch of 3G services may have only limited impact on the mid-end and high-end smartphone markets since almost all of the handsets already support 3G. Vendors have been offering 3G handsets to the market long before the emergence of 3G services. The significant impact, however, is likely to be seen in the entry-level smartphone market as operators will try to convert their existing feature phone users to data-craving smartphones via the introduction of cheaper smartphones and data packages, additional services and additional contents such as e-books and music streaming".

Jarit also states, "The launch of 3G won't have a significant impact on the Thailand shipment of smartphones. Thailand's launch of 3G has lagged behind much of the region, where device manufacturers have already found economies of scale by shipping 3G-enabled models long before any usage of those networks have been made available." On the other hand, with 3G-enabled devices already widely available, the operators will not have to face the usual issue of putting enabled devices in the hands of consumers, and instead focus purely on getting them to upgrade their plans.

The long-term strategy that mobile operators will need to focus on is continuing the expansion of base stations, especially to have high network coverage in Bangkok and key cities across the country. However, the effort might prove difficult as this will involve significant CAPEX spending.  A balancing act between customer service quality and an extensive network of base stations will be necessary to maintain viability while reducing churn rate".

For best mobile phone deals: http://shopping.telecomtiger.com/

For latest updates on facebook: http://www.facebook.com/pages/TelecomTiger/429104257149437