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Enhancing the competitiveness of the local business environment and enabling a transparent government to provide its citizens with equitable access to public services and their data by utilising digital technology are central to Thailand’s national development plan, “Thailand 4.0”.

The advancements made by Thailand in implementing its digital government policy will spearhead the digitalization of the private sector and enhance the access of both citizens and businesses to public sector data to drive the country’s overall economic competitiveness.

The demand for data centres and cloud technology in Thailand has been underpinned by the country’s high internet and mobile internet penetration, with individuals and consumers spending more time online and companies adapting to the new business norms of work-from-home and the gig economy. These changing behaviours have been spurred by consumer confidence in the country’s communications infrastructure, 5G technology and legal framework as well as the government’s facilitation of the digital economy.

At the corporate level, the data centre market has been driven by companies’ preference for having carrier-neutral colocation data centre capacity for their network and IT services, while the growing use of digital platforms in the financial and telecommunication industries as well as content and digital media requirements have also contributed to the rising demand.

Looking ahead, the data centre industry is expected to continue enjoying healthy demand with more organisations adopting cloud technology, big data and analytics, and Internet of things colocations as businesses look for more stable and affordable resources for server storage, data analytics and connection. Indeed, the proliferation of tech companies, IT service providers and e-commerce companies has resulted in a shift towards hyperscale colocation data centres.

Thailand 4.0 Drives Demand for Colocations

A key prong of the “Thailand 4.0” national development plan, which seeks to promote the adoption and innovation of digital and automation and robotics technology among SMEs, manufacturing companies and the service sector will underpin the robust demand for data centres. With its focus on ensuring Thailand embraces the opportunities that arise from digital technology to improve its citizens’ quality of life, the participation of all in political governance and the country’s economic competitiveness through initiatives such as the Smart City Development project, big data platform and analytics for agricultural, education and healthcare policies and investment in digital infrastructure, Thailand 4.0 is set to lead to further demand in this segment.

In order to make internet access more equitable for its citizens, the Thai government launched the “Village Broadband Internet” scheme in 2017 as a flagship digital infrastructure development project to expand the country’s high-speed internet network throughout the nation, enabling Thai people who live in remote areas to access broadband or high-speed Internet. At present, all of Thailand’s 74,987 villages are able to access high-speed internet networks, which allow users to access the government’s e-services on health care and online government, as well as e-commerce, e-business and e-banking applications.

Earlier this year, the Thai government designated the internet as part of the country’s basic infrastructure while also pledging to lower the cost of internet services and enable low-income earners to access the service free-of charge under a plan to use digital technology to foster equality and help people adversely impacted by the fallout from COVID-19.

In a bid to strengthen the legislation framework of the country’s digital age, the Thai parliament promulgated the Personal Data Protection Act B.E. 2562 (A.D. 2019) which set out the guidelines for businesses on the management of sensitive areas, including access to consumers’ personal data and data storage protocols, the assignment of data logs, and the prevention of unauthorised access. With the effective date postponed by exactly 12 months to June 1, 2022 due to the pandemic, businesses are required by law to ensure they are fully prepared when it comes into effect.

In terms of external security threats, the Cyber Security Act B.E. 2562 (A.D. 2019) has also encouraged government agencies and businesses to move toward investment in cybersecurity measures to ward off cyber-attacks.

Thailand is witnessing explosive growth in carrier-neutral colocation data centre services from the arrival of new players as well as the capacity expansion of existing providers. Thailand currently houses a total of 18 colocation data centres1 with approximately 400,000 sqft of multi-tenant data centre (MTDC) operational space in 2019.2

Of the country’s 18 colocation centres, 16 are in the capital city of Bangkok and its surrounding area, while the other two are located at the Eastern Economic Corridor, the country’s pilot special economic zone which offers the advantages of being located just 30 kilometres from undersea cables yet 100 metres above sea level3, guaranteeing high-quality infrastructure such as power and water supply.

With its competitiveness in ICT, the strength of its basic infrastructure, its skilled workforce, the support from its public sector and its strategically advantageous location, Thailand is well positioned to become an important destination for colocation data centres that serve the demand of businesses operating within the Association of Southeast Asian Nations (ASEAN).

Digital Government Spearheads Data Revolution

The Thai government’s digital government policy, reinforced by the Digital Government Administration and Services Law B.E. 2262 (A.D. 2019), has set four objectives with the aim of enhancing how the public sector works for the people, including social and economic equitability, the enhancement of economic competitiveness, ensuring government transparency and improving people participation. The policy is comprised of four strategies: 1) delivering end-to-end digital services to citizens, 2) improving the ease of doing business via digital technology, 3) offering open data platforms and 4) promoting people participation in the policy-making process. This framework also aligns with the ASEAN Digital Masterplan 2025.

The Digital Government Development Agency (DGA)4, entrusted by law to move digital government implementation forward, has accelerated the digital government architecture among government agencies in the wake of the COVID-19 pandemic. Among the key measures are the acceleration of the Thailand Government Information Exchange, a central database of government agencies designed to reduce the documentation burden on the private sector, improve efficiency by eliminating redundancy, and promote the use of Digital ID, including digital signatures among government agencies. Another important initiative is the creation of a government data catalogue to enable the private sector to access the public sector’s data more efficiently.

The DGA is also accelerating development of the Government Data Exchange to create an integrated platform of government databases over the next two years by standardising data exchange guidelines among government agencies.

As a result of the digital government implementation, Thailand has moved up the rankings of the United Nations’ e-Government Development Index 2020 to 57th place out of 193 countries from its previous ranking of 68th in 2019, again placing it as the 3rd highest ranked country in ASEAN, after Singapore and Malaysia.5

Pandemic Spurs Digital Way of Life

As people increasingly logged on to manage ever more aspects of their daily life in an effort to overcome the challenges posed by the COVID-19 pandemic in 2020, the “Global Digital Report 20216” confirms the remarkable trends of Thai citizens’ engagement in the digital world. Indeed, the almost nine hours that Thai internet users spend in front of a screen each day is not only above the global average but the 9th highest in the world.

Thailand was ranked third in the world for ecommerce adoption with 84% of the country’s internet users having bought something online over the previous month, trailing only Indonesia and the UK, and comfortably above the global average of 77%. The country was also ranked fifth for using QR codes with 60% of its internet users utilising this service in December 2020. The country also recorded the highest number of transactions through mobile banking and financial transaction apps in 2020, possibly thanks to the government’s digital co-payment scheme as part of its relief package for people affected by the pandemic.

In terms of infrastructure, Thailand has a world-class internet speed, offering the world’s fastest fixed internet connection at 308.35 megabits per second and the second fastest mobile internet connection in Southeast Asia after Singapore at 51.75 megabits per second as of January 2021.

BOI Promoting the Digital Ecosystem

To further strengthen the ecosystem of the digital industry, Thailand’s Board of Investment (BOI) is currently promoting the digital industry through tax and non-tax incentives, with a focus on three groups, namely, software development, digital infrastructure and digital ecosystem supporting businesses. The tax incentives are:

Software Development:

8-year CIT exemption for Software Development, Digital Services Platform or Digital Content including e-commerce

Digital Infrastructure:

8-year CIT exemption for submarine cables, data centres and cloud services

Digital Ecosystem Supported Business:

5-8-year CIT exemption for makerspaces or fabrication laboratories (Fab Labs), digital parks, innovation incubators except for co-working space

6 Digital 2021: the latest insights into the ‘state of digital’ – We Are Social

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