A MODIFIED MODEL OF ICT DEVELOPMENT INDEX (IDI) FOR THAILAND TO ACHIEVE THE ICT LEADER IN ASEAN

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1 International Journal of Advanced Research in Engineering and Technology (IJARET) Volume 6, Issue 12, Dec 2015, pp , Article ID: IJARET_06_12_005 Available online at ISSN Print: and ISSN Online: IAEME Publication A MODIFIED MODEL OF ICT DEVELOPMENT INDEX (IDI) FOR THAILAND TO ACHIEVE THE ICT LEADER IN ASEAN Settapong Malisuwan, Dithdanai Milindavanij, Jesada Sivaraks, Noppadol Tiamnara National Broadcasting and Telecommunications Commission (NBTC), Bangkok, Thailand ABSTRACT After the first allocation of spectrum in the 2.1 GHz band was successfully made in 2012, Thailand s ICT technology has developed continuously, considered at the higher level compared with those of other ASEAN countries. In relation to this, the ITU has revealed the annual survey results regarding ICT-society indices or Measuring the Information Society Report (MIS Report) which is published annually. In this year, the ITU MIS report 2015 identified Thailand as one of a group of "most dynamic countries" that recorded above-average improvements in their IDI ranking over the past five years, supported mainly by improvement in mobile broadband penetration. The objective of this paper is to propose a modified model of ICT Development Index (IDI) to bring Thailand to be the ICT leader in ASEAN. This paper also presents a policy and strategic plan to foster Thailand s ICT sector to move forward to higher level of ICT Development Index in achieving the first rank of IDI level in ASEAN within Keyword Head: Model, ICT, IDI, ASEAN, Thailand Cite this Article: Settapong Malisuwan, Dithdanai Milindavanij, Jesada Sivaraks, Noppadol Tiamnara, A Modified Model of ICT Development Index (IDI) For Thailand To Achieve The ICT Leader In Asean. International Journal of Advanced Research in Engineering and Technology, 6(12), 2015, pp INTRODUCTION The telecommunications market in Thailand is at a successful transformation: despite an initial delay, the commercial launch of 3G mobile networks saw a substantial 39

2 Settapong Malisuwan, Dithdanai Milindavanij, Jesada Sivaraks, Noppadol Tiamnara increase in the use of mobile broadband services. After the first allocation of spectrum in the 2.1 GHz band was successfully made, Thailand has experienced significant progresses in the telecommunications industry, especially positive effects on the overall economic benefits. The opening up of 3G/ 4G services on the 2.1 GHz spectrum by the licensed operators as well as the widespread use of mobile devices like smartphones and tablet computers facilitate users in gaining convenient access to the Internet without limitations in time and locations, generate the wave of consumers requiring round-the-clock Internet access; online social networks in particular, bring about changes in consumer behaviors [1]. The auction of 2.1 GHz spectrum contributes to the overall investment worth thousand million baht per year in telecommunications network devices such as in the core network and cable lines during the first 3-5 years after the auction has been conducted. This is because the licensed operators need to rush the expansion of network coverage to be more extensive. This includes the expansion and improvement of network quality and stability which will promote further growth in telecommunications markets due to the commercial utilization of the 3G/4G networks where mobile phone operators have made more investments on the networks. This is considered the stimulation of the overall economic system through the operators various investment funds: in telecommunications infrastructures, network construction and development, installation of network devices or network system planning, etc. Due to the continuously decreasing trend of communication devices price levels, the populations can gain easier access to the Internet resulting in greater expansion of communication device markets and rapid increasingly widespread use of smartphones and smart devices. It is found that the mobile phone market in Thailand has grown up to 132 percent or around 90 million devices sold; exceeding the population of Thailand. There is an increasing trend of one user owning more than one smart device, and the smartphone market value in 2014 is expected to grow further by 30 percent compared with that before the 3G auction was conducted in This affected the country s rate of smartphone utilization to rise up to 45 percent in 2014 or to be valued around 6 ten thousand million baht. Furthermore, it is found that 66 percent of mobile phones in the market are capable of supporting 3G/4G technology [1], [2]. The aims of this paper is to propose a modified model of ICT Development Index (IDI) to bring Thailand to be the ICT leader in ASEAN. This paper also presents supportive regulatory policy and strategic plan to foster the ICT sector to move forward Thailand to higher level of ICT Development Index in achieving the first rank of IDI level in ASEAN within To achieve the objective of the research, this paper organized the content as follows. Section 2 discusses the 4G 1800MHz spectrum auction results and provides positive impacts of the license. Section 3 presents a conceptual framework of ICT Development Index and also discusses the status of Thailand s IDI. In Section 4, we propose our model by applying the ICT Development Index; indicators, reference values and weights in Section 3, to construct the modified model of IDI to maximize ICT impact (outcomes) for bringing Thailand to the ICT leader in ASEAN. Supportive policy and project initiatives to serve the proposed model are presented in this section. The conclusion is the last section 40

3 A Modified Model of ICT Development Index (IDI) For Thailand To Achieve The ICT Leader In Asean 2. IMPACTS OF 4G 1800MHZ LICENSING In the 4G 1800MHz auction process, the National Broadcasting and Telecommunications Commission (NBTC) announced the winners. Advanced Wireless Network Co Ltd and True Move H Universal Communication Co Ltd won the two 4G licences that ended on November 12, Total receipts for the Thai government were billion Thai Baht (USD 2.25 billion.). True Move H Universal Communication Co Ltd, a subsidiary of True Corporation, won the first licence at billion baht. Advanced Wireless Network Co Ltd, a unit of Advanced Info Service (AIS), offered billion baht for the second licence. The prices were 150% above the reserve price for the first licence and 158% for the second licence. In terms of estimated real spectrum value, the first licence was 200% higher while the second was 206% more [3]. Basically, benefits for the economy and the society will be more influenced after the auction, as operators will have to invest in network infrastructure in order to serve consumers. Based on the NBTC studies, the investments will amount to more than 500 billion baht within 5 years after the auction and will create additional jobs in engineering and IT. In the long term, network investment will transform Thailand's telecom supply chain landscape [4]. The roll-out of new 4G broadband infrastructure (including mobile broadband) is expected to create a positive impact on the jobs market in Thailand by creating new skilled jobs. This will contribute positive changes in the general population and the workforce in Thailand by developing abilities and skills to use new infrastructure and the latest emerging technologies. A study by the NBTC's telecom committee showed that 4G will generate 119 billion baht in telecom business by 2020, another 114 billion for the macro economy, 284 billion in the capital market and financial investments, 50.6 billion in 4G use and 109 billion in mobile transactions. The 4G network deployment will generate 18.2 billion baht for the entertainment sector, 37.4 billion for education, 5 billion for social welfare activities and 111 billion for the public health sector. It will also help generate electronic waste-related businesses worth 76 million baht [3]. The number of 4G subscribers on the 1800-MHz spectrum alone is expected to reach 20 million in The number of mobile subscriptions will top 170 million in 2016, up from million this year. The big trends in 4G mobile applications next year will be video streaming, social commerce, mobile games, mobile advertising, big data, cloud services and machine-to-machine communication or the Internet of Things (IoT). NBTC expects that the rapid roll-out of 4G infrastructure will accelerate the progress of the ICT development. Moreover, Internet of Thing (IoT) is expected to significantly impact almost every social and economic sector, including education, healthcare, agriculture, transportation and manufacturing within 5 years [5]. Most of the value derived from IoT comes from the generation, processing and analysis of new data. This will generate a huge use of ICT infrastructure in the near future in Thailand. 3. ICT DEVELOPMENT INDEX (IDI) The ICT Development Index (IDI) is a composite index that combines 11 indicators into one benchmark measure that can be used to monitor and compare developments 41

4 Settapong Malisuwan, Dithdanai Milindavanij, Jesada Sivaraks, Noppadol Tiamnara in information and communication technology (ICT) between countries and over time [5]. Advancing through ICT development depends on a combination of three factors: the availability of ICT infrastructure and access, a high level of ICT use, and the capability to use ICTs effectively, derived from relevant skills. These three dimensions ICT access, ICT use and ICT skills therefore form the framework for the IDI as shown in Fig. 1. [5] ICT Readiness (Infrastructure, Access) ICT Use (Intensity) ICT Impact (Outcomes) ICT Development Index ICT Capability (Skills) Source: ITU [5] Figure 1 Three stages in the evolution towards an information society Based on the conceptual framework in Figure 1, the IDI is divided into the following three sub-indices, which are illustrated, together with their component indicators, in Table 1. Access sub-index: This sub-index captures ICT readiness, and includes five infrastructure and access indicators (fixed telephone subscriptions, mobile-cellular telephone subscriptions, international Internet bandwidth per Internet user, households with a computer, and households with Internet access). Use sub-index: This sub-index captures ICT intensity, and includes three intensity and usage indicators (individuals using the Internet, fixed broadband subscriptions, and mobile-broadband subscriptions). Skills sub-index: This sub-index seeks to capture capabilities or skills which are important for ICTs. It includes three proxy indicators (adult literacy, gross secondary enrolment, and gross tertiary enrolment). 42

5 A Modified Model of ICT Development Index (IDI) For Thailand To Achieve The ICT Leader In Asean Table 1: ICT Development Index: indicators, reference values and weights [5] ICT access 1. Fixed-telephone subscriptions per inhabitants 2. Mobile-cellular telephone subscriptions per inhabitants 3. International Internet bandwith (bit/s) per internet user 4. Percentage of households with a computer 5.Percentage of households with Internet access ICT use 6. Percentage of Individuals using the Internet 7. Fixed-broadband subscriptions per inhabitants 8. Active mobile-broadband subscriptions per inhabitants ICT skills 9. Adult literacy rate 10. Secondary gross enrolment ratio 11. Tertiary gross enrolment ratio Reference value * Reference value 60 Reference value (%) Weight % (%) Weight 40% (%) Weight 20% Basically, having mobile broadband service at affordable prices for the mass market will be a major factor in narrowing the digital divide and lifting the country's competitiveness. Based on the Measuring the Information Society Report 2015 (MIS report 2015), Thailand is ranked 74th out of 167 countries this year, up from 81st last year, according to the National Broadcasting and Telecommunications Commission (NBTC). NBTC strongly believes the IDI ranking for Thailand will improve to 60th by 2017, based on the fact that the 3G and 4G mobile networks roll-out resulted in a significant improvement in the ranking, to 81st in 2014 from 92nd in The target of the NBTC is that Thailand's IDI ranking will be No.1 in ASEAN by The ITU MIS report 2015 identified Thailand as one of a group of "most dynamic countries" that recorded above- average improvements in their IDI ranking over the past five years. This means that Thailand was the most dynamic country in Asia-Pacific, showing the greatest change in IDI ranking in the region, supported mainly by improvement in wireless broadband penetration. The IDI not only reflected development of a country's infrastructure and ICT use but also represented a major factor attracting investment from international businesses including more global technology companies. In the next year, the NBTC expects massive migration to 4G networks by 3G users next year amid intense competition among the operators of the 4G LTE1800MHz. 4. A PROPOSED MODEL: A MODIFIED MODEL OF IDI FOR THAILAND S ICT ENVIRONMENT To achieve the objective of this research, we apply the ICT Development Index; indicators, reference values and weights in Section III, to construct the modified 43

6 Settapong Malisuwan, Dithdanai Milindavanij, Jesada Sivaraks, Noppadol Tiamnara model of IDI to maximize ICT impact (outcomes) for bringing Thailand to the ICT leader in ASEAN. Supportive policy and project initiatives are presented as following: ICT access (A) 1. Fixed-telephone subscriptions per inhabitants (A1) Accelerate USO projects for fixed-telephone installation in rural area. 2. Mobile-cellular telephone subscriptions per inhabitants (A2) Award available spectrum in the 900MHz and 1800MHz bands to expand 3G and 4G mobile services. Plan to make the globally harmonized 700MHz Digital Dividend band available to ensure good value mobile broadband services - providing good coverage in rural areas, inside buildings, and households. Any spectrum that becomes available for 4G in future such as in the 2.3GHz, 2.6GHz or other bands should be assigned using an appropriate, market-based process to award spectrum licences, in line with international best practice. Ensure the costs of rolling out new technologies are managed in the most efficient way Voluntary infrastructure sharing for potentially providing benefits such as better availability of services through further roll-out into less populated areas. 3. International Internet bandwith (bit/s) per internet user (A3) Ensuring a level-playing field with state-owned companies in international internet gateway by promoting more private companies in the international gateway market. 4. Percentage of households with a computer (including tablets and similar handheld devices) (A4) Fund for affordable computer projects for low income citizens. 5. Percentage of households with Internet access (A5) Fund a competition for ISPs to attract new subscribers in low-income communities. Telecommunications policy has to aim at promoting competition in Internet gateway markets ICT use (B) 6. Percentage of Individuals using the Internet (B1) Transform access to financial services. It enables people to execute e- payment transactions and is expanding to offer person-to-person payment for unbanked customers. Develop applications to specific sectors in the Thai market e.g. Farmer Information superhighway, Smart transportation, Smart city, Smart mobile SME. Government services digitization and establishment of e-government 7. Fixed-broadband subscriptions per inhabitants (B2) 44

7 A Modified Model of ICT Development Index (IDI) For Thailand To Achieve The ICT Leader In Asean Accelerate USO projects for fixed-broadband installation in rural area. Voluntary infrastructure sharing for potentially providing benefits such as better availability of services through further roll-out into less populated areas. 8. Active mobile-broadband subscriptions per inhabitants (B3) ICT skills (C) Policies targeted at improving 3G/4G infrastructure use in rural areas by expanding 900MHz coverage. Plan for 700MHz licensing as a broadband coverage in rural areas as soon as possible. Improve ICT abilities and skills of the population/workforce through building of new mobile networks and related mobile services development opportunities. (C1) Policies to enhance digital literacy. (C2) Policies to initiate SME in mobile economy platform and develop of local content (i.e. to encourage how to produce content and applications)(c3) Source: ITU [5] Figure 2 Thailand s Spider Chart of IDI ratings [5] To determine the weighting on each sub-index, we analyzed the weakness points of ICT development in Thailand from the Spider Chart in the MIS Report 2015 as shown in Figure 2 [5]. Based on the Spider Chart in Fig. 2, we found that there are 5 out of 11 weak indicators. That means that if we can improve these weak indicators which are fixed-broadband subscriptions, Internet users, households with Internet, 45

8 Settapong Malisuwan, Dithdanai Milindavanij, Jesada Sivaraks, Noppadol Tiamnara households with computer, and fixed-telephone subscriptions, Thailand will have a chance to improve the IDI value. This will lead to improve the IDI Ranking. Therefore; in this research, we prioritized the focused indicators as following: 1. households with computer 2. households with Internet 3. Internet users 4. fixed-broadband subscriptions 5. fixed-telephone subscriptions Figure 3 shows the proposed model of this research to improve Thailand s IDI value. The weight of essential indicators were analyzed and identified based on the weakness of each indicator in the Spider Chart in the Fig. 2 which is shown in Table 2. This study also suggested that the NBTC should establish a team to work on assessment, evaluation, and feedback processes. In every 6 months, the assessment and Evaluation & Feedback team will give suggestions to NBTC to adjust any values or policy to maximize the impact (outcomes). Figure 3 The proposed model (the modified model of IDI) 46

9 A Modified Model of ICT Development Index (IDI) For Thailand To Achieve The ICT Leader In Asean Table 2 The weight of essential indicators Indicator Component Weight Fixed-telephone subscriptions per inhabitants A1 25% Mobile-cellular telephone subscriptions per inhabitants International Internet bandwith (bit/s) per internet user Percentage of households with a computer (including tablets and similar handheld devices) A2 5% A3 20% A4 25% Percentage of households with Internet access A5 25% Percentage of Individuals using the Internet B1 50% Fixed-broadband subscriptions per inhabitants B2 40% Active mobile-broadband subscriptions per inhabitants B3 10% Improve ICT abilities and skills of the population/workforce through building of new mobile networks and related mobile services C1 40% development opportunities Policies to enhance digital literacy C2 20% Policies to initiate SME in mobile economy platform and develop of local content (i.e. to encourage how to produce content and applications) C3 40% To achieve No. 2 in 2017 and No. 1 in 2020 for IDI Ranking in the ASEAN countries, Thailand needs to accelerate ICT development against Malaysia and Singapore. Fig 4 illustrates IDI values, Asia and the Pacific, 2015 and the positions that Thailand needs to achieve to be the ICT leader in ASEAN. Figure 4 IDI values, Asia and the Pacific,

10 Settapong Malisuwan, Dithdanai Milindavanij, Jesada Sivaraks, Noppadol Tiamnara 5. CONCLUSIONS After the first allocation of spectrum in the 2.1 GHz band in 2012 was successfully made, Thailand has experienced significant progresses in ICT development, especially positive effects on the overall economic benefits. The ITU MIS report 2015 identified that Thailand is one of the most dynamic countries in IDI ranking over the past five years, supported mainly by improvement in mobile broadband penetration. The next wave of 4G 1800MHz rolling out in Thailand will foster growth in the access and use of ICTs, which should in turn have a positive impact on short and long-term social and economic development. Thailand recognizes the great potential of ICTs and focuses on stepping forward to achieve the ICT leader in ASEAN. This paper proposes a model and presents supportive regulatory policy and strategic plan to foster Thailand s ICT sector to move forward to higher level of ICT Development in achieving the first rank of IDI level in ASEAN within REFERENCES [1] Faculty of Economic, Chiangmai University, NBTC research project, March 2015 A Study on the evaluation of Impacts on Socio-economic Benefits in Mobile Broadband Services [2] Faculty of Economic, UTCC, University of the Thai Chamber of Commerce Impact of Socio-economic and Telecommunications Business in the 2.1 GHz Spectrum Licensing 15 September 2013 [3] Settapong Malisuwan and Wassana Kaewphanuekrungsi, A Review of Spectrum Auction in 4G LTE 1800 MHz: The First Transition of Telecommunications Industry from Concessions to Licensing Regime in Thailand, International Journal of Advanced Research in Management (IJARM) Volume 6, Issue 3, pp , Sep-Dec (2015). [4] NBTC Internal Report, November, Impact on 1800MHz spectrum Auction, [5] International Telecommunication Union (ITU), Geneva, Switzerland, 2015 Measuring the Information Society Report [6] Chandrashekhar R. Suryawanshi, an Importance of ICT on Improvement in Quality of Education. International Journal of Management, 4(6), 2013, pp [7] Settapong Malisuwan and Wassana Kaewphanuekrungsi, Analysis of Mobile Telecommunications Market in Thailand. International Journal of Management, 6(12), 2015, pp [8] Settapong Malisuwan, Noppadol Tiamnara and Dithdanai Milindavanij, THE Impact of Spectrum Assignment on Economic Growth and Competitiveness in Thailand. International Journal of Management, 6(12), 2015, pp

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