Graduate School of Global Information and Telecommunication Studies, Waseda University
Abstract of Doctoral Dissertation
A Consumer Centric Approach to the Evaluation of Major ICT Policies in Thailand
タイにおける主要なICT政策の評価に関する 消費者を中心としたアプローチ
Satitsamitpong Manit サティトゥサミトポン マニット
Global Information and Telecommunication Studies
Economics and Social Impact Analysis of Telecommunications II
June 2013
The last decade of the twentieth century witnessed the introduction and subsequent growth in information and communication technologies (ICT) industries. The developments of these industries are believed to be the drivers for economic growth of the nations. With this in minds, governments and national regulatory agencies (NRA) have been issuing policies to increase the adoption of new technologies and to promote competition in those industries in hope that this will translate into prosperities of the countries. Although this policy centric approach has been researched and implemented dominantly, the utilization of ICT has not increased as planned. Also, the approach contains some flaws which it lacks inclusion of consumers’ point of view and many times it favors suppliers in the market. In addition, there have been limited researches which investigate the current situations from different perspectives.
This thesis aims to propose a new approach to evaluate ICT policies from the consumer’s perspective. The approach measures consumers’ utilities on ICT usages which better reflects the policies’ goal to increasing nation welfare. The proposed approach premises that technology adoption (switching) can be examined through the theory of consumer decision making. This theory assumes that a consumer rationally attempts to choose among from available goods or products to maximize his/her utility (satisfaction). It also assumes that a good or service is viewed as a bundle of attributes (features). Using this approach, it can understand how a consumer values each attribute and in turn decides to choose a particular good or service, which is ICT service in this thesis.
To validate this approach, the thesis applies the proposed model in three different ICT industries. These three industries are in different stages of development, namely matured mobile service industry, emerging broadband Internet industry, and non-existing but introducing digital terrestrial TV industry in Thailand. Thailand is chosen to be the case study site because the three industries are currently still in different phrases while most developed countries have passed these periods. In addition, since most researches on ICT are largely conducted in developed countries, the results of the thesis can help understand the current situations in less explored, developing countries.
The first case study examines the Thai mobile subscribers’ awareness and adoption decision of MNP service as well as the determinant factors of switching operators after the implementation of MNP policy. The results indicate that subscribers are reluctant to switch their operators and their awareness of MNP service is quite low. However, after learning of its existence, some mobile users decided to switch operators and adopt the MNP service. In addition, the study found that postpaid users want to adopt MNP and are willing to pay more than the prepaid users do. In terms of switching factors, the result indicates that the expected reduction in the monthly mobile bill is the most significant factor behind subscribers’ decisions to switching operators. Mobile subscribers, especially the postpaid users, are likely to switch to mobile operators that provide add-on services, such as 3G services. The study also found that setting a lower fee and reducing the MNP process time
could increase the chances of adopting the MNP service. Contrary to other previous studies, the thesis found that MNP may result in helping the incumbent firms grow larger, while a smaller player is losing its subscribers due to smaller network coverage.
Second, the thesis investigates the broadband market which is in the beginning but growing stage of the industry by using two sub-research studies. With the data from Japan and Thailand, the first sub-research study found that price, a proxy for economic factor, has an important influence on the decision to adopt broadband Internet, especially in a developing country like Thailand.
Demographic factors such as income and location also contribute to the broadband adoption decision;
however, their influence is smaller than that of the price factor. The second sub-research study extends the first sub-research by including application factors and updating technological factor into the new model with the nationwide data collected from the National Statistical Office of Thailand. The results indicate that price of Internet service, age of users, household income, living area, availability of fixed phone line, Internet usage, and application factors are important for broadband adoption decision in Thailand. Therefore, this study not only confirms previous literatures about the importance of economic factor and demographic factors on the decision to adopt broadband service, but also found that other factors such as the type of applications and availability of fixed line that could possibly lead to higher broadband Internet adoption.
The third case study is the digital terrestrial TV (DTTV) industry. At the time of the study in 2010, there is no DTTV available in the market in Thailand. The study tries to understand the awareness of this new technology as well as the factors that affect consumers’ adoption decision.
Since there is no service in the market yet, the study employed a stated preference questionnaire survey and evaluated by using the mixed logit model to understand decision making via reception devices which are a set-top box (STB) and a new digital TV (DTV) set. The results show that awareness of DTTV services in Thailand is quite low. In addition, the thesis found that low-income viewers tend to adopt STBs as opposed to DTVs. The study also indicates that benefits provided by DTTV services such as better video quality, more available TV channels, basic data services, and advanced data services influence the adoption decision. However, advanced services, for instance, live data broadcasting and interactivity ability statistically do not affect STB adopters in making decision. Moreover, price of a STB in the market is higher than consumers’ willingness to pay (WTP) for a STB. Therefore, to promote more adoption of STBs, the policy maker could consider subsidizing for these people.
The proposed approach therefore revealed contributions to three different stakeholders, who are academic community researchers, policy makers, and managers as follows.
Academic
From the past, Thai telecommunications and broadcasting industries have been monopolized by two state-owned enterprises and their concessionaires. As a result, most
implemented policies involve and tend to benefit those companies. This thesis introduces a different approach to evaluate ICT policies by taking consideration of consumer’s perspective, contrary to mainstream viewpoints such as policy centric and ICT adoption.
Therefore, it gives insights to the policy makers from consumer’s view point, which could provide much-needed information that could benefit policy making.
This proposed approach allows policy makers to analyze the (possible) impacts of policies to be implemented as well as to modify current policies. Therefore, it helps save time and cost as well as increase national welfare by avoiding and mitigating unintended consequences of improper policy implementation.
This approach is applied to three different ICT industries (mobile, digital TV, and broadband) in developing countries, particularly Thailand and therefore extends the body of knowledge on ICT policies in developing countries, which studies are limited.
Policy Makers
Education
Policy makers should educate consumers about new technologies and their benefits as those are shown to increase adoption.
Price
Policy makers should be careful about setting MNP service fee and porting time to motivate the subscribers to adopt the service.
Policy makers could consider different means to make adoption of STBs more affordable.
Services
Policy makers can consider promoting content/application developers to create more applications that are attractive to Internet users.
To promoting DTV adoption, policy makers could encourage broadcasters to provide value-added services.
Managers
To compete in standardized services such as voice service and broadband service, cost leadership should be the key strategy to compete with other players.
Providing advanced services and applications could attract consumers to adopt technologies.
