Increasing Internet penetration not only accelerates economic growth but also improves social welfare while poor technology readiness will affect Thailand’s competitiveness and attractiveness to foreign direct investment according to a study entitled “Towards A Connected World – Socio-Economic Impact of Internet in Emerging Economies” by the Boston Consulting Group which was commissioned by Telenor.
The study, which covers Thailand, Bangladesh and Serbia, indicated that under the right conditions and with the right regulatory environment, Thailand could have 17.9 million Internet subscribers by 2020, approximately 26 subscribers per 100 inhabitants. At the household level, 70 percent could have at least one Internet subscription, whilst business adoption could lie around 91 percent in 2020.
Overall contribution to GDP from the Internet in Thailand is expected to be 3.8 percent per annum in 2020. The key driver of this is the productivity gains experienced by business users in all industries, which reaches 4.9 percent for service firms and 2.4 percent for manufacturing firms. This allows them to contribute 1.9 percent and 1.2 percent to GDP, respectively.
The Internet could potentially increase the number of new businesses created each year by up to 52,000 in 2020, which corresponds to 114,000 new jobs, of which only 11,000 are projected to be created within the Internet value chain.
Political uncertainty has afflicted Thailand over the last few years, and there are concerns that the current regulatory regime is deterring investment by lack of ability to act swiftly and decisively when necessary. This stems from a combination of concerns around the regulatory capability to analyze complex issues, and perceived political “interference”.
There is also the perception that clear rules and implementation guidelines have not been laid out for critical issues, such as competition regulation, and this concern is exacerbated by the tendency for legal disputes to drag on, tensions between the current concession system and the licensing regime that is expected going forward. There is a strong need to ensure a level playing field for all market participants during the transition process. It is a key priority that these concerns be addressed in order to realise the maximum benefits from investment in Internet infrastructure.
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