Techniques for Estimating Demand for Public Internet Service: An Empirical Study of CATNET Demand and Usage Rattanawan Rattakul Senior Business Analyst, Thailand Post Company Limited Ministry of Information and Communication Technology THAILAND

Thailands initiatives in PIACs Thailand IT2010 lays out the countrys ICT roadmap towards Knowledge- based Society with seven strategies Strategy 1: The development of ICT industry into a regional leader Strategy 2: The utilization of ICT to enhance the quality of life and society Strategy 3: The reform and enhancement of the capability on ICT research and development Strategy 4: The reinforcement of social capacity for future competition Strategy 5: The development of entrepreneurs capacity for the expansion of international markets Strategy 6: The utilization of ICT in Small and Medium Enterprises Strategy 7: The utilization of ICT in government administration and services To increase knowledge-workers to 30% of labour force, the Royal Thai Government aims to introduce telecenters in every villlage and increase the value of the ICT industry to 40% of the countrys GDP. The initiative has begun since 1999 and been ongoing.

Thailands 2004 ICT Uptake Source: NECTEC, Ministry of Science and Technology, and National Statistical Office, Ministry of Information and Communication Technology (See handouts) Telecommunications Computer Units Internet

Thailand Internet Users Population: Million (2004, NSO) Internet users: 7.03 Million (NSO survey, 2003) PC Owners: 726, 767 (2003, TU/IDC) Broadband subscribers: BKK 130,000 Province 10,000 CATNET users: 78,283

Public Internet in Thailand as of 2004 CAT Telecom: CATNET Public Kiosks in 1,107 offices nationwide TOT Corp: TOT Tambon.net to all TAOs 13,254 points and SchoolNet to 21,013 schools Private Internet Café: 2,253 cyber cafes as of March 2004 TOTAL 37,907 PIACs per Million Thais

Compatibility of ITU Survey to the Thai statistics on digital divide 1. Major agencies handling census and survey in ICT-related issues are NECTEC under MoST, and NSO under MICT 2. Classification of PIAC by localities does not suit the Thai context, as our data collection stored most info in the Bangkok and its vicinity, and its decentralized provinces in North, N/E, Central, South 3. To fill in the ITU survey, the agencies need to launch a specific survey for this questionnaire

CATs Study on CATNET Demand and Usage Research Objective Examine CATNET user demographics and Internet usage Acquire customer insights Identify attributes of their service need Promote awareness of inhibitors in narrowing the digital gap

Research Methodology Survey Method: Stratified Random Sampling across all 761 CATNET outlets (as of December 2002) Outlets categorized into four groups 2,550 questionnaires mailed 1,223 questionnaires returned (48% of response rate) 2% rejected as respondents are unqualified (See questions on their application used on the Internet) = 1,174 questionnaires Coding and Analysis conducted using SPSS Reliability test on answers resulted in 89.55% alpha value

Four groups of CATNET outlets CATNET cards soldNo. of outlets Survey sent (copies) Over , Total Sent1702,550

Findings BKKNorthCentralEastWestNortheastSouth 14%13%16%3% 30%21% Telecom CenterPost Office 49.8%50.2% Questionnaires received by sampling units Demographics

Findings Employment StatusIncome (000 Baht) AgeDomicile

Findings Public Sector Employees32.6% Private Sector Employees16.3% Self-employed17.5% Retirees1.1% Student32.5% Computer Ownership Yes44.0% No56.0% Occupation Education Primary School2.6% Secondary/junior High School 8.2% High School20.1% Vocational Student23.7% Bachelor Degree40.4% Graduate Degree5.0%

Internet Usage of CATNET users Internet access 0-5 hour / week53. 5% 5-10 hour / week28.3% hour / week10.2% hour / week8.1% First usage of the Internet In % In % In % In % Prior to %

Internet usage Duration < 30 Min.15.1% Min.53.4% Min.16.7% Min.8.6% > 2 Hrs.5.9% Always logged on0.3% Frequency

CATNET usage Duration Frequency < 30 Min.27.4% Min.50.7% Min.13.4% Min.5.5% > 2 Hrs.3.0%

Do you use Internet at the following places? No. of CATNET users who access Internet At home371 At work334 At school308 At public booth985 Distribution of Point of Access Home Work School Public Booth 18% 15% 12% 55%

Purpose of Usage

Application used on the Internet NeverSometimesMost often 16.8%38.6%44.6% File Download29.4%51.2%19.4% File Upload47.7%43.3%9.0% Chat36.1%43.7%20.2% Playing Game33.2%47.3%19.5% Web browsing7.5%35.9%56.6%

What did they browse on the web? Ever UsedNever Product Info Search82%18% Corporate Info search87%13% Search Product before purchase70%30% Browse new web site88%12% Order product via Internet41%59%

Why do they use Public Internet? Two major reasons emerge: Public Internet is cheap (584 respondents) No Internet access at home (525 respondents)

Perception on Internet Benefits Internet helped reduce communications and search costs Internet enhance their productivity, i.e.job vacancies, suppliers CATNET helped lengthen their Internet use (67%) CATNET helped increase their usage (68%)

Perception on Internet Benefits A bivariate correlation analysis with 90% degree of freedom implied that frequency of CATNET usage and duration of CATNET usage explained positive relationship that CATNET helped increase Internet usage, and lengthen Internet session.

CATNET Pricing

Conclusion CATNET survey helped identify actual CATNET users CATNET survey helped in decision-making on sites for service expansion, based on customer profiling CATNET survey reveals price points affordability and elasticity of user demand After the survey, service expansion from 761 outlets to 1,100 outlets Price decrease to 0.12 Baht per minute from 0.50 Baht per minute

Thank You

CATNET Pricing PricingMean SDSDN One hour of CATNET services Suggested Price Point (THB/Hour) CATNET Price per hour before surveyTHB 30 CATNET Price per hour after survey THB 10.2