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AirAsia risky bet on Thailand’s 3G

Could 2011 be the year that the Thai telecommunications market finally overcomes the many obstacles placed in the way of the proliferation of high-speed multimedia services?

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Asia’s largest low-cost airline signed a 49:51 joint-venture deal last week with a group of Thai investors to establish Tune Talk Thailand Co.

Could 2011 be the year that the Thai telecommunications market finally overcomes the many obstacles placed in the way of the proliferation of high-speed multimedia services?  This question could be answered very soon as the government appears to be keen to fast-track 3G  long due development.

This new development will turn TOT and CAT into the sole operators of nationwide 3G services, which allow better and faster flow of such data as text, e-mail, social media and video on mobile phones. These services are considered crucial in generating revenue in an industry where traditional voice revenue is declining because of intense competition.

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AirAsia joint venture company, with 100 million baht in registered capital, will provide 3G wireless broadband services on behalf of TOT Plc, with the planned debut of its Tune brand on Jan 13.

Private operators in Thailand currently operate second-generation mobile-phone services under concessions granted by either TOT or CAT Telecom, which require revenue sharing of around 20%-30% with the state companies.

Tony Fernandes, the founder and CEO of AirAsia, said his entry into the Thai mobile market was intended to create a new value-added lifestyle and low-cost communications service with “one SIM card, one flat calling rate throughout the region”.

“We have the necessary elements for success – solid distribution channel and the extensive customer base of AirAsia – to make our mobile expansion in Thailand gain a greater foothold in the region,” he said.

AirAsia expects to carry 33 million passengers on Asian routes this year, 12 million of whom are inbound and outbound passengers in Thailand. It wants 51 million passengers in the region in 2011.

Tune Talk will use the Celcom (Malaysia) network in the region.

AirAsia, known for the slogan “Now Everyone Can Fly”, has also invested in a no-frills hotel business to develop Tune hotels throughout the region.

Tune Talk will market 3G services on behalf of TOT as a so-called mobile virtual network operator (MVNO).

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