Asia Focus: Customer Care and Billing in Thailand

The government of Thailand has given priority to liberalizing its heavily regulated telecom market during the past decade. While liberalization is moving slowly, there are nevertheless several new, fast-growing operators.

In 2000 the Thai government missed deadlines for creating the country's first telecom regulatory body and legislative framework, further delaying deregulation. In addition, it has taken longer than expected to establish the National Telecommunications Commission, the agency responsible for supervising market deregulation and ensuring fair competition. Due to these delays, liberalization of domestic services is expected to take at least another year, while the market for international services may not be opened until 2006.

Meanwhile, significant restrictions encumber the issuance of new telecom business licenses. Nonetheless, several large infrastructure projects are under way in Thailand, including installation of rural long-distance telephone lines and submarine fiber optic cables, the planned installation of 6 million additional fixed telephone lines and the licensing of new cellular phone service providers.

Thailand has one government agency, the Post and Telegraph Department (PTD), and two state enterprises, the Telephone Organization of Thailand and the Communications Authority of Thailand, which together are responsible for providing the full scope of telecommunications services in the country. The PTD is responsible for international and regional coordination in the field of posts and telecommunications, as well as frequency spectrum management, law enforcement, and developing national postal and telecommunications policies.

Incumbent Operators

The Telephone Organization of Thailand (TOT) is the state enterprise responsible for providing domestic fixed-line services as well as international services to neighboring Malaysia and Laos. In December 2000 TOT awarded Alcatel a major contract to deploy a nationwide 10,000 km DWDM/SDH optical network to increase capacity for fixed lines, leased lines, VPNs and IP services. Facing declining growth from its fixed-line network, TOT is turning its attention to mobile communications. It owns 55 percent of new mobile entrant ACT Mobile (the Communications Authority of Thailand owns another 40 percent), which is in the process of launching 2.5G services, although to date it has only attained a 1 percent market share. Also, TOT was the lucky recipient of an exclusive, and free, 3G mobile license.

In addition to its mobile interests, TOT controls a slew of other concessions and licenses. The complexity in working out how to compensate it for shedding these interests is expected to tie up the privatization process for years, and may also deter potential strategic investors.

TOT is apparently still selecting a new CC&B system. However, as with many Thai operators, the company was not willing to provide much information regarding the status of its billing project. As for IP-based services, TOT has implemented Digiquant's Internet Management System (IMS). According to Martin Kent Nielsen, Asia-Pacific regional sales director for Digiquant, the contract win was due in part to its relationships with Cisco for IP billing and with Hatari Internet, an IP systems integrator in Thailand and a part of the Hatari Technology Group. Digiquant also has an established presence in Asia, with regional headquarters located in Singapore and field offices in Malaysia, Australia and China.

Digiquant's system handles both data and voice services and is used for authentication, mediation, rating, billing and customer care. These services include prefix VoIP routing, prepaid calling card VoIP, prepaid Internet access, leased lines, wholesale Internet services and 1-800 free number services. TOT's EBS (Electronic Billing System) is based on Digiquant's IMS. The IMS installation can support up to 6 million service subscriptions.

IMS feeds billing information to the existing legacy PSTN billing system for certain services. So far localization of the product has not been necessary, as the Thai system operators are fluent in English. For on-line customer self-care, which might be made available to TOT's customers at a later stage, the pages will be in Thai.

The Communications Authority of Thailand (CAT), TOT's sister company, provides international telecom services (except to Malaysia and Laos), as well as telex, data communication, cellular, paging and television broadcast services. It also operates the postal service. CAT has its own mobile aspirations, and it has made large investments in building cellular infrastructure to provide CDMA mobile service in 45 provinces, or about 40 percent nationwide coverage. Similar to TOT, however, CAT's mobile market share is only about 1 percent. CAT is also an important element of the ISP landscape, insofar as every ISP is required to give (yes, give-not sell) a 32 percent stake in itself to CAT as a joint-venture partner. Accordingly, CAT wields a great deal of control over the Internet sector.

Recent discussions have contemplated merging TOT and CAT into a new privatized company called Thai Telecom. Promoters of the idea believe its combined strength would better withstand the foreign competition that will inevitably arise through liberalization. While TOT and CAT together dominate the Thai market, recent years have seen the advent of two important new players, TelecomAsia and Thai Telephone & Telegraph, both of which have been granted operating licenses to provide basic local and long-distance telecom services in certain areas of Thailand.

According to Sarun Thaibuntao, assistant director of data processing, CAT's legacy billing system resided on an IBM mainframe, "and its primary disadvantage was that there were many scattered files on the CCB, creating an inconsistent database." In December 1999 CAT began implementing its current billing system, which it calls Telecommunications Business and Operation Support System (TBOSS). Siam Tel Tech Company was the primary contractor for TBOSS; system vendors included EHPT, Ericsson Thailand and HP Thailand.

Regarding localization, Thaibuntao says that "the current CCB system provides the data content in both Thai and English, but the fixed field descriptions shown on the screens are only in English due to limitations of the software package, and CAT has no source code to customize." Thaibuntao feels the current system has certain limitations: "It is difficult to customize to meet CAT's requirements because of the software package. Moreover, CAT's users were accustomed to the old system, and were not really ready for the new system. Therefore, it has been quite hard for them to get used to."

For international telephone service, CAT has two kinds of customers: internal and external. Thaibuntao explains that internal customers directly register with CAT, and CAT maintains its own customer files for these customers. In contrast, external customers do not register with CAT; rather, CAT periodically distributes so-called "A-No files" to all the local Thai operators whose customers CAT serves. Each such file contains a list of the telephone numbers that have originated international calls, which CAT collates based on the local operator numbering plan. The local operator then returns the file to CAT providing the essential customer data for each telephone number in the list, and CAT then uses this information for bill processing. "Since CAT has no external customer information in hand," explains Thaibuntao, "CAT must request information about the external customers from several local operators."

As for international carrier-to-carrier interconnect, "CAT handles interconnect billing for international telephony and data communication services using EHPT's Settler software," says Thaibuntao. "CAT performs the interconnect billing by deriving CDRs from the mediation device using its Billing Mediation Platform software, and then generates monthly interconnect statements to other carriers according to the interconnect agreements."

CAT's future direction "is not really obvious," Thaibuntao admits. "CAT is going to be privatized and it needs to reorganize in order to prepare for the highly competitive telecommunications world. CAT realizes this issue and plans to have an effective CCB system. We have plans to enhance the performance of our TBOSS system during 2003. CDMA technology is changing from 2G to 3G. Since our current TBOSS system does not support 3G technology, it will need to be changed somehow."

Newer Fixed-Line Operators

Telecom Asia Corporation (TelecomAsia), founded in 1990, is owned 22 percent by the Charoen Pokphand (CP) Group and 18 percent by Verizon. TelecomAsia operates a fixed-line network of 2.6 million lines in greater Bangkok (1.4 million currently subscribed) and 20,000 payphones (currently 11,000 installed) under a 25-year concession with TOT. The company has recently experienced some financial difficulties associated with an inability to use the full functionality of its infrastructure, due to license unavailability, underutilization of its fixed-line capacity and a lower overall demand for services. Yet TelecomAsia has been improving its position by restructuring debt and making plans to introduce more value-added services. It has also recently entered the wireless market, first through the launch of its Personal Communications Telephone (PCT) service, and more recently by obtaining a 41 percent stake in new mobile entrant CP Orange via a CP Group reorganization. PCT is an alternative mobile service promoted as an add-on to a fixed line, and offers limited mobility and coverage within the Bangkok area by combining a Personal Handyphone System with an intelligent network. By late 2000 TelecomAsia had about 350,000 PCT customers, with success of the service driven by low tariffs and handset prices. One of TelecomAsia's ultimate goals is to offer one number per user, so that each customer can have the same number for fixed-line, PCT, as well as cellular (i.e., CP Orange) service.

Asia Multimedia, an affiliate of TelecomAsia, recently announced that it has selected Lucent's Arbor/BP billing platform and Arbor/OM order management system for its high-speed multimedia services.

Thai Telephone & Telegraph (TT&T), established in 1992 and a member company of the Jasmine International Group, cooperates with TOT in providing provincial telephone services under a 25-year concession for 1.5 million fixed lines. In January 2001 TT&T signed a $1.4 million contract with Datacraft (a subsidiary of London-listed Dimension Data) to increase capacity in its infrastructure and bring multimedia and Internet business applications online. The company also plans to leverage the new network to offer value-added Frame Relay services to its enterprise and ISP customers.

Development of the Thai Mobile Sector

Thailand's wireless market is experiencing rapid growth, and the government has invested significantly in developing mobile infrastructure. The country now has some 6 million mobile phone subscribers divided among six analog and digital mobile phone operators and two satellite-based operators. Penetration is only 8.5 percent, but many analysts estimate that it will grow to 30 percent by 2010, or 18.5 to 20 million subscribers. Today the mobile market is dominated by Advanced Info Services and Total Access Communications. However, the structure of this market will likely change much in the next few years due to anticipated reorganizations of existing operators, and with new ones like CP Orange coming online.

Advanced Info Services (AIS), established in 1990, is owned 43 percent by Thailand's Shin Corporation, with Singapore Telecom holding another 19 percent. Operating both NMT 900 and GSM 900 networks, it is Thailand's largest mobile operator with over 3.8 million subscribers and over 200,000 new subscribers per month. The company now has about a 53 percent market share and expects to surpass 4 million subscribers by the end of 2001. According to the company's Web site, AIS' Customer Administration and Billing Computer System (CUBICS) was developed in-house. AIS explains that because it sets different tariffs in different regions and charges based on the point of the call's origination and destination, the billing system had to be custom-developed.

Total Access Communications (DTAC) launched service in September 1991 under a 27-year CAT concession, and now operates its AMPS 800 and digital PCN 1800 services under the DTAC brand name. It is owned 41.6 percent by United Communication Industry (UCOM), 30 percent by Telenor, 9 percent by TOT/CAT and 19.4 percent by the public. The company has a 40 percent share of the mobile market, and as of August 2001 it had 2.2 million subscribers (82 percent postpaid, 17 percent prepaid), with subscribership growing at around 75,000 per month.

According to a company representative, DTAC's CC&B system was developed in-house and implemented in September 1997 by DTAC's own IS Department. The overall system consists of three parts:

o On-Line System, including modules for registration, customer and subscriber, customer care, payment and debt control

o Batch System, including modules for rating, pricing and invoicing

o Mediation Device System, including modules for provisioning and CDR transfer.

DTAC uses this CC&B system for both of its networks as well as for both postpaid and prepaid services. The latter are supplemented by an intelligent network system to control the customer's voucher and real-time charging. DTAC's CC&B system is fully localized for the Thai language.

CP Orange (formerly Wireless Communication Services) is the newest entrant in the Thai mobile market. It is a joint venture owned 49 percent by France Telecom's Orange, 41 percent by TelecomAsia and 10 percent by the Charoen Pokphand Group. CP Orange had originally planned to launch commercial service by the end of 2001. It postponed the launch until early 2002 due to an inability to reach roaming agreements with AIS and DTAC, which want to preserve limited network capacity for their own customers. CP Orange contracted with Alcatel to supply and install its GSM 1800 GPRS network, which will have an initial capacity of 1.1 million subscribers, to be expanded to 2 million by the end of 2002. CP Orange hopes to capture at least one-third of Thailand's cellular communications market in the next five years, and projects 2 million subscribers by the end of 2002.

While AIS and DTAC clearly dominate the Thai mobile market, and CP Orange is an interesting new entrant with powerful backing, a few other operators in the Thai market are worth mentioning:

Digital Phone Company (DPC) began operations in May 1998. The company's ownership structure is currently under reorganization, but ultimately AIS will acquire 98 percent of the company. DPC operates a GSM 1800 network as well as a PCN 1800 network under a concession from CAT through 2013, and the company has a 6 percent market share.

Hutchison CAT Wireless Multimedia (aka Tawan Mobile) markets and operates a digital CDMA mobile service under a CAT concession, although CAT itself built the network infrastructure and performs the billing. "CAT uses TBOSS to bill the CDMA 2G mobile service, but in the future we will employ new software to support 3G technology," says CAT's Thaibuntao.

ACT Mobile, a TOT/CAT joint venture established in July 2000, plans to offer a 1900 MHz cellular service. While the backing of Thailand's two incumbents gives it potential, it has postponed rolling out services due to regulatory obstacles.

ACeS Regional Services will be introducing a regional satellite-based system offering voice and data service, and using a palm-sized dual-mode (satellite/GSM 900) handset.

CC&B Vendor Experiences in Thailand

The difficulty for Western OSS vendors to break into the Thai telecom market, relative to other telecom markets around the world, is hard to gauge. Cultural issues are clearly the No. 1 barrier to entry (see, "Contract Negotiations and Cultural Issues").

It appears that only a very few Western CC&B vendors have established a presence or gained customers in Thailand, among them Digiquant, UshaComm, ADC, Portal and Netherlands-based Mindport (for cable TV billing). As pointed out by one correspondent at a major U.S. telecom operator with business interests in Southeast Asia, "The market is still very closed and noncompetitive, and business is conducted largely with 'inner-circle' or royal connections." Nonetheless, the large incumbents probably (or in TOT's case, definitely) need to update their legacy systems, while the fast-growing new operators will also likely be interested in new or supplemental CC&B solutions.

Les Edelman is a telecommunications analyst based in Budapest, Hungary. He can be reached at +36-70-215-9267 or at edelman@pronet.hu.