Connections between research questions and theoretical framework

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Empirical study

This chapter starts with a description of the ICT market. Further the chapter will give a detailed data of the ICT market in Sweden and Thailand in laws and regulations, institutions, operators and consumers to be able to answer the research questions.

 ICT market

ICT includes all technologies in communication of information. Technology for receiving, storing and broadcasting information via any voice, sound, text, images and video is included. The telecom network and common standards for communication has created a worldwide network of communication (Nationalencyclopedin, n.y). ICT has become a core technology within many industries is a technology for consuming services (Pierce, 2013). In ICT market it is important for companies to co-work to compete to reach world class within ICT, such as operators doing investments together in infrastructure or co-operating in service level (Näringsdepartimentet, 2009). Thailand is behind other countries in applying pro-competitive regulation in the ICT market. They could draw benefit when using experience of other countries in order to implement a best case regulatory (Xavier, 2008). ICT are having a rapid change. The mobile communication is increasing, as fixed network expansion is needed to support higher technology. Internet is increasingly getting a substitute for calls and text. Video distribution is increasing and expected to increase more (Mr. Waiwanijchakij, personal communication, 19 April) The use of ICT are not only a part of the everyday life for companies, organizations and citizens, it also have impact on the growth, competition among companies and the development of a sustainable society (Näringsdepartimentet, 2009).

Government

The government creates laws that are to be followed by the people in the country. These laws affects business and can creates barriers for business.

Sweden

Sweden has a powerful position when it comes to ICT. Receiving top rank in several different comparisons to other countries (Näringsdepartimentet, 2009). Sweden have a constitutional monarchy. The parliament and government have the power and the parliament are chosen by the citizens every fourth year (Nationalencyklopedin, n.y). The Swedish government task for ICT market in Sweden is to create opportunities and goals for the market as well as removing barriers in the market including creating relevant control so all actors will be able to act on the same terms. The market participants are leading the development of services, products and investments (Näringsdepartimentet, 2009). Sweden was one of the first countries to deregulation the telecommunication market. Telelagen (Law of telecommunication) was implemented in 1993, which later became The law of electronic communication (LEK). Telelagen was changed in 1997 to fit with European union where PTS at the same time got increased power in the telecommunication market (Florestedh, 2012). Strategies within broadband in Sweden have been changed since 1999 to benefit the Swedish telecommunication market and influenced the breakthrough in Sweden. The first strategy regarding broadband in Sweden are: “An information society for all, which has its purpose to guarantee that every household in Sweden has access to Internet.” After that two strategies were introduced: Open up the Telia network by implementing Local loop unbundling (LLU) (Srinuan et al., 2012). LLU will allow other companies to enter the telecommunication market and provide broadband services to customers. LLU policy increase competition because it removes the barriers for entry (Lee et al. 2011). The second strategy was government funding which made the broadband infrastructure develop (Srinuan et al., 2012). There are two main laws concerning telecommunications in Sweden. These two laws are the competition law and LEK. The competition law states that it is illegal to abuse the dominance in the market (Florestedh, 2012). Further it is illegal to work together to barrier, limit or distort the market (Konkurrensverket, n.y). LEK was founded in 2003 and replaced the radio law and telelagen. The purpose of the law are that individuals and authorities will have access to safe and effective electronic communications, also to have a wide selection of price and quality within electronic communication. To achieve this purpose the competition and international harmonization in the telecommunication market should be promoted. The Swedish näringsdepartimentet (Ministry of industry) (2009) believes that high usage of IT is important for Sweden to stay competitive within the telecommunication. Through the broadband strategy that Sweden has, the government is continuing the work to improve the conditions for the actors and competition. The goal within the information technology is to be leading in the world on utilizing the digitization opportunities; this goal was developed in 2012. To be able to reach this goal the government has on an overall perspective chosen four main strategies from the consumers’ perspective: Easy and safe to use /Have services that creates advantage/ The need for development of infrastructure/ The IT’s role for the development of society (Näringsdepartimentet, 2011) The objective have been set as following: “The whole of Sweden should have an effective, robust, and future-proof infrastructure for electronic communications with high transfer capacity in both directions, so as to enable good technical quality of transfer for multimedia services, in a functional, cost-effective and competitive market.”

Thailand

Thailand has since May 2014 a temporary government after the military coup. Thailand has been switching from parliamentary democracy and military rule since year 2000 (Nationalencyklopedin, n.y.). Thailand is late in introducing, installing and applying regulations that are fostering the competition. TOT and CAT the two state -owned companies were given concessions agreement in 1990 and 1991 to provide analogue mobile service (Srinuan et al. 2013). The digital divide between urban and other population in Thailand are affecting the competitiveness for Thailand in the long-term (National broadband policy, n.y). Thailand has three main laws concerning telecommunication. The first one is Trade competition Act (TCA) that was implemented in 1999 with the content of restricts all trade practices, which creates monopoly, and/or reduces competition (Xavier, 2008). The second one is telecommunication business act (TBA) of 2001 also called the frequency act or NBTC Act were the basis for deregulation Thailand’s Telecommunication market (ITU, 2015). The purpose of the act is to: “contribute to the promotion of public welfare by encouraging sound development of telecommunications business and ensuring convenience to the users of telecommunications service through proper management of such business.” (ITU, 2003). The third law is foreign business act, which states that Thai citizens must own 51% of the investment, and that foreigners only can own 49% of the total investment and are therefore a minority. Further foreigners are restricted to work in different areas, for example rice farming, Thai handcraft and trade in property. It is also forbidden to have jobs connected to national security. The restrictions of work are because Thai are not ready to compete with foreigners in some areas (Board of investments, 2014). The new regulatory framework of TBA did not apply for those concessionaires happened before the law was enforced but will be applied when the arrangement change or the concession expires. Because the concessions remain NBTC cannot regulate the companies under the concessions directly. To be able to change or convert the existing concessions it would require both the Constitution and the TBA to agree on the arrangements. If a company that is in a concession and want another agreement the company will be restricted to the 49 percent foreign ownership by FBA (Xavier, 2008). Instead NBTC regulate the companies through TOT and CAT, which are the concessionaires (Xavier, 2008). When the concessions ends NBTC gains more power to regulate the companies since they provide licenses to the companies directly instead of through CAT or TOT, but today there are still a few companies under concessions. The government in Thailand had planned to make TOT private but have delayed the process because of the actors. Many actors have been critical to privatization, actors like politicians, academics and TOT’s employees. They are worried about job security and increasing inequality in access (Srinuan, 2010). The government of Thailand wants the ICT infrastructure to be a basic tool by 2020. To achieve that goal encouragement of investments to expand the ICT in the country need to be made. To be able to do this they need to have a free and fair competition. The private sectors should come together to make efficient use of shared resources. It is important to promote broadband to all people and to improve the quality of the network so it will be prepared for the next generation network, following the lead of developed countries. Thailand needs to ensure the network security in order to create trust and confidence among business and people to make transactions online. It is important to create appropriate legal infrastructure that should be modern and responsive to changes within technology. Laws that are waiting on approval should be adopted immediately, new laws should be prepared and existing laws should be evaluated in an urgent matter. Promote and support research and development (National electronics and computer technology center, 2011). The government needs therefore to consider reviewing and updating the laws within telecommunication so that is adapts to new developments and challenges (Xavier, 2008).

ICT institution

Institutions within ICT are presented below. Delimitations to PTS in Sweden and NBCT in Thailand have been made because they have big impact on ICT actors and are controlled by laws from the government.

Sweden

The institution in Sweden that regulates the market is called PTS. PTS is an authority that monitors electronic communication and postal services in Sweden, such as telecommunication, IT and radio. It was created 1992 and based their work on telelagen (the law of telecommunication). From year 2003, PTS base their work on LEK and the vision of PTS is that everyone in Sweden will have access to a wide choice of good and secure electronic communication services (fixed and mobile calls, broadband and postal services) at a reasonable price and quality. PTS has four goals that are to shape (1) long-term consumer benefit, (2) long-term sustainable competition, (3) efficient utilization and (4) secure communications. 1.Long-term consumer benefit always aims to give consumer benefits within the ICT The ideal situation is that the consumers’ active choice is shaping the market and to make it possible for the consumers to have access to a wide range of services and good information of what the market offers (PTS, n.y). If consumers send complaints on the operators to the authority, PTS will oversight the specific operator. The most important means for a wide range of services is effective competition according to PTS. 2.The goal for long-term sustainable competition. One way for PTS to assure this is to ensure competition between network suppliers and the operators. The market is expected to achieve economic efficiency on its own, with a wide range of affordable goods and services. The government authorities are setting regulation of the sustainable relationship between network suppliers and the services provided by the operators. When effective competition is reached the regulations can be removed or changed. The ICT market is characterized of factors that unfavor the possibilities for long-term sustainable competition. PTS role in helping new actors get into the market on clear and fair terms is to view the market and analyze the situation. If there is a competition problem on one part of the market PTS will identify which actor/actors that has major impact on the market and thereafter take decisions of obligations to this actors, for example give other actors access to network and services. 3.Efficient utilization comprises certain resources that are required to operate within the field of electronic communication that are limited, for example the radio spectrum that is a requirement for mobile usage. Another limited resource is the number of telephone numbers. This is international agreements and structures which sets the limits. The resources need to be regulated to be able to be utilized of the consumers. PTS divides telephone numbers between different usage and the Swedish number plans.4. Secure communications comprises good function and secure electronic communication because the society is depending more on it. PTS is working for a secure and functional usage of electronic communication by working on robustness and also the users security and integrity. The basics for a community depending on the ICT market is the infrastructure, networks and nodes is functional and protecting against disruptions, sabotage and other incidents. The willingness to use new opportunities and services can be inhibited of poor security and integrity protection. One important part to increase security on Internet is to inform and have conscious consumers, therefore PTS inform consumers on these areas. PTS is also analyzing the field of security to control if the actors on the market comply the regulations of integrity. The analysis of security consists of management of complaints, inspections and monitoring requirement (PTS, n.y.). PTS has since 2010 created strategic plans for regional growth. The first plan between 2010-2013 focused on growth strategy within electronic communication especially in broadband. The regional growth strategy plan in year 2014-2020 is a long-term strategy that will lead and develop the authorities part in regional growth in regional level of the country. Increase the dialog between the authorities and development actors to be able to support growth. In the field of electronic communication PTS is working to benefit the broadband expansion with measures and tools that is indirect and direct supporting regional growth. PTS promotes regional and local actors with support in different forms. One tool that PTS has developed to support broadband expansion is a map over broadband availability and speed on broadband where people live and work. It also shows regional strategy of broadband expansion for each area in Sweden, which is called “Bredbandskartan”. Another tool PTS has developed is “Ledningskollen” which is a service that tracks networks in Sweden to help planning and coordination expansion of new networks and thereby the infrastructure of broadband. This was developed because due to high cost when excavations are damaging existing lines and infrastructure. The highest cost of broadband expansion is the excavation. Government has one law propose on how the expansion of broadband will decrease. The law will decrease cost in new opportunities of coordination. When an actor is building a broadband the actor gets access to use the channels in previous excavations and also other network owners infrastructure. The new law is proposed to get in action from July 2016. PTS will get new duties with national dispute resolution and a base of information. To increase the robustness in the networks PTS is financing supportive activities. Local representatives are involved in the dialog with suitable investment because they know about needs and gaps/flaws in the specific area in Sweden. PTS is also executing exercises, “Telö-övningar”, for actors in the field of electronic communication. “Telö-övningar” has the purpose to create increased capability and preparedness between national and regional level, to fulfill the society’s need of available, reliable and sustained communications in crises and extraordinary events.

Thailand

The institution within ICT in Thailand is called NBTC. National Telecommunication Commission (NTC) was started to promote free and fair competition as well as support growth, protect customers right and make sure telecommunication services are equal and universal throughout the whole country (Xavier, 2008). NBTC later became an independent state telecommunication regulator that regulates broadcasting and telecommunication services. According to the law, NBTC need 11 commissioners that has to be experts in the area of each field of radio broadcasting, television broadcasting, telecommunication services, law, and education between the age of 35 to 75 years old. Laws that NBTC base their work on is Frequency act, also called NBTC Act, and the telecommunication business act. In year 1997 the Institution for national communication and national broadcasting was created because the change of ownership of the spectrum. From being owned by the government the Thai people now owned it and an independent institution were therefore needed and the first article that claimed that the spectrum belong to the people was official. The previous two organizations, NCT and NBT were merged in 2007 by the government. NBTC became one organization handling both broadcasting and communication and to take care of spectrum licensing. ”Thailand is late in developing ICT but we are getting ahead very fast” (J. Sirvaras, personal communication, 14 May, 2015). Since NBTC did not make any progress in assigning spectrum the frequency act was formed 2010 to give NBTC power to assign frequency for telecommunication and broadband. In 2011 a full board of 11 members was assigned to work at NBTC. NBTC created a spectrum plan in 2012 a nd a national broadband plan for national communication. In 2013 the ICT market in Thailand faced a big issue concerning the concession with TOT and AIS. “It is a weak point in the law when all consumers that is included under the concession will be outside the spectrum” (J. Sirvaras, personal communication, 14 May, 2015). 18 million people will be outside the spectrum in two or three years from now and need to be moved to another spectrum under another operator, which still remains as a problem according to Sirvaras (Personal communication, 14 May, 2015). Spectrum licensing is an action that NBTC has done so far that has had a major impact on telecommunication. NBTC provides statistics on how many subscribers and market share but does not provide information about availability and speed of network in specific areas in Thailand (J. Sirvaras, personal communication, 14 May, 2015). NBTC´s core responsibilities are to regulate for broadcasting and telecommunication industry by arranging auctions of frequency allocations and to formulate broadcasting masterplan and telecommunication masterplan. The masterplan provides directives for broadcasting, radiocommunications and telecommunications services of the country during a five-year period. The masterplan has been formulated as a guideline for NBTC in frequency licensing and regulation telecommunication business in line of Telecommunications Act. The goal is to provide the public with a wide range of telecommunication services via modern telecommunication network that is equal accessible at an affordable price as a result from fair competition and efficient management with the vision “To develop telecommunication business, bridge the gap of access information technology, enhance the country’s competitiveness, and improve quality of life of people.” (NBTC, n.y) NBTC has six goals during 2012-2016. 1.To provide the general public with telecommunication services with quality and affordable and fair price, for the utmost benefits of the public in both national and local level in education, public health, cultures, state security, and other public benefits This goal is done by promoting the competition in the industry. “Spectrum belong to the country of Thailand and the people and we are handing out spectrum via auctions,” (J. Sirvaras, personal communication, 14 May, 2015). The right to use spectrum belonged to government and has formatted concessions that has the right to use the spectrum. Free and fair competition is created in the auctions. NBTC can create more competitiveness in auctions by having a cheaper fair. After the auction the competition is lost. “We use policies instead of control and command” (J. Sirvaras, personal communication, 14 May, 2015). NBTC is promoting price policies to ease barriers for the utmost benefit of the public, and so that the price is high enough for the operators to get profit and not to expensive for consumers. This goal can be reached within three years and they are working towards the goal but they need to develop 3G and 4G to a lower price first to complete the goal (J. Sirvaras, personal communication, 14 May, 2015). Another issue to reach goal number one is how to get more private companies to access the market in order to increase the competition and lower the prices. 2.To develop and promote free and fair competition among telecommunication operators both incumbents and new entrants By working with a new concept, infrastructure sharing, this goal can be reached. When building new cable or fiber network, the network owners has an obligation to share the network with service operators at an affordable price. The policy loaning agreement means that if you won a spectrum on an auction the operators has the right to loan the network. If a new operator comes to the market the operator has the right to negotiate of frequency with the older operator at a fair price. This goal has already been reached (J. Sirvaras, personal communication, 14 May, 2015). 3.To promote the utilization of telecommunications and radiocommunications resources in an worthy, efficient and sufficient manner in both the normal case and the case of an emergency and disasters. By implementing a critical situation plan, also the concept of infrastructure sharing is contributing to reach this goal. All operators need to have a critical business plan for emergency. “In a critical situation, operators need to open their towers so that all customers in the area can use their network” (J. Sirvaras, personal communication, 14 May, 2015). This goal is not reached but NBTC has a plan to start cooperation with the service operators to implement a warning tower. This will serve as a warning tool for public messages instead of using TV and Radio as a channel and public messages on phone will be more efficient because almost everyone in Thailand has a phone (J. Sirvaras, personal communication, 14 May, 2015). NBTC will conduct a plan at the end of this year for the warning tower, last year NBTC did a demo on a warning tower in Phuket but it did not succeed. 4.To increase the opportunities in accessing to basic telecommunications service in both voice and broadband services This goal focus on providing basic telecommunication services in the rural areas of Thailand. NBTC provide a minimum fund that makes it possible for companies to receive in order to build network in rural areas. NBTC have plans to reach this goal in four years (J. Sirvaras, personal communication, 14 May, 2015). 5.To promote consumers awareness in their rights, and develop effective and fair systems and mechanisms for consumer protection in telecommunications “Conflict often comes from misunderstanding in communication” (J. Sirvaras, personal communication, 14 May, 2015). Negotiation process between the service provider and the consumer that leads to a conflict can often be solved before reaching the court. NBTC also has a minimum condition of service, which means they are checking quality of service every day according to an assurance plan. If there is a technical difficulty the operator needs to pay back to the consumer or give compensation of 3G for free. NBTC can give solutions to either the consumers or the operators if they have complaints. This goal is already met (J. Sirvaras, personal communication, 14 May, 2015). 6.To raise the competitiveness of the country at international level This can be reached by increasing the number of operators in the market, which will increase the competition (J. Sirvaras, personal communication, 14 May, 2015). NBTC is only handing out license of spectrum and it is up to the operators to select the best technology to the consumers. It is up to the operators if the speed and availability is accessible to all consumers in all provinces in Thailand. On global perspective Thailand needs more time to reach this goal. NBTC support their goals through tools like infrastructure funding, access through licensing the operators to use the spectrum. “NBTC major tool is promoting and do not force” (J. Sirvaras, personal communication, 14 May, 2015). To support the expansion of infrastructure the owners do not need a telecom license to operate network. Infrastructure is available in every province, however the network needs to be spread out to provide local broadband and meet the target (J. Sirvaras, personal communication, 14 May, 2015) . “Infrastructure is the biggest problem today for the telecommunication to get faster in both fixed and mobile network” (Vice Chairperson ICT working group, personal communication, 28 April, 2015). The biggest challenge of NBTC´s goals today is how to regulate apps providing services in Thailand. The owners do not have investment or license in Thailand but provide services like Facebook, line and Whatsapp. This is a problem because they do not pay any fee and it is not fair to the operators that once got revenue from texts and calls (J. Sirvaras, personal communication, 14 May, 2015). One of the toughest barriers in ICT is the telecommunication adoption in a local content in rural areas (J. Sirvaras, personal communication, 14 May, 2015). It is very expensive for consumers to buy equipment (smartphone, computer, iPad) and services on network. To get more competitive NBTC need to reduce the cost of equipment and services to get more people in Thailand to get active on ICT market. If more people use network services in Thailand, NTBC can reduce the regulation fee. The availability with network needs to expand in the rural areas and the Government has had a policy plan to get penetration of 80 percent in four years. TOT and CAT that is state owned service provides have asked for financial support by the government but been denied due to the government’s tight budget. The broadband expansion has been handed to the responsibility of the people. It is difficult to increase fixed network in rural areas because of the lack of companies willing to provide that type of service. NBTC mean that themselves create more barriers in these situations when asking for a license to operate in areas with little revenue. In those cases NBTC wants to decrease the barrier for more people in Thailand by working towards more affordable fixed broadband. “NBTC is trying to regulate to deregulate”, NBTC means that if the competition is enough on the market they would not need to regulate (J. Sirvaras, personal communication, 14 May, 2015).

1 Introduction 
1.1 BACKGROUND
1.2 PROBLEM DESCRIPTION
1.3 PURPOSE AND RESEARCH QUESTIONS
1.4 DELIMITATION
1.5 OUTLINE
2 Methodology
2.1 STUDY DESIGN
2.2 WORK PROCESS
2.3 APPROACH
2.4 LITERATURE STUDIES
2.5 DATA COLLECTION
2.6 ANALYSIS OF DATA
2.7 CREDIBILITY
3 Theoretical framework
3.1 CONNECTIONS BETWEEN RESEARCH QUESTIONS AND THEORETICAL FRAMEWORK
3.2 INTERNATIONALIZATION
3.3 BENCHMARKING
3.4 CONTINGENCY THEORY
3.5 HOFSTEDE’S CULTURAL DIMENSIONS
3.6 STRATEGIC MANAGEMENT
3.7 CONNECTION OF THE THEORIES
4 Empirical study
4.1 ICT MARKET
4.2 GOVERNMENT
4.3 ICT INSTITUTION
4.4 NETWORK SUPPLIERS
4.5 MOBILE OPERATORS
4.6 FIXED NETWORK
4.7 CONSUMERS
5 Analysis
RESEARCH QUESTION ONE AND TWO
6 Discussion and conclusion 
6.1 RESULT
6.2 IMPLICATIONS
6.3 METHOD DISCUSSION

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