Heavy subsidies for smartphone purchases offered by mobile operators and handset makers are stimulating replacement demand for mobile phones despite a saturated market and unfavourable economic conditions.
A wide range of handset campaigns and attractive tariff plans are key strategies for mobile operators to increase their high-margin postpaid customers, said Prisana Ratanasuwansri, senior vice-president for the postpaid division of Total Access Communication (DTAC).
The postpaid market is expected to grow by 6.5% to 18 million subscribers in 2017, up from 16.9 million last year.
"We expect our postpaid users to reach 6 million this year, up from 5.2 million last year, with our discounts of 5,000-10,000 baht for a premium smartphone in return for signing a postpaid contract," she said.
Handset subsidies will be specifically given to postpaid customers this year, instead of the low-margin prepaid segment previously.
Ms Prisana said the number of postpaid customers who failed to make monthly payments was 4% in the first quarter of 2017, up from 2-3.5% at the end of last year.
The local smartphone market is saturated with sales of 60 million smartphones. Smartphone sales in Thailand are expected to reach 16-18 million units per year driven mainly by replacement demand, she said.
Opas Cherdpunt, managing director of M Vision, the organiser of Thailand Mobile Expo 2017 from May 18-21 at Queen Sirikit National Convention Center, said the big smartphone discount campaigns at the event have attracted huge crowds of curious consumers.
He said Chinese handset makers like Oppo and Vivo are offering aggressive discounts at the expo.
M Vision expects sales during the four-day event to reach 1.8 billion baht, equal to a similar event in the first quarter and 10% higher than an event in mid-2016, which he attributed to the arrival of new flagship smartphone models.
The return of the Nokia brand, acquired by HMD Global, to Thailand's crowded smartphone market has also attracted lots of interested consumers at the event.
Sandeep Gupta, HMD Global's regional general manager for Thailand and emerging Asia, said Thailand is the first country in Southeast Asia to see the roll-out of its new series of smartphones.
"This shows Thailand is an important market for us in Asia-Pacific, thanks to the large number of Millennial users," he said.
Nokia established a local office in Bangkok earlier this year.
Nokia plans to launch the Nokia 3 phone in the second week of June, priced at 4,850 baht per unit. The company expects to roll out the Nokia 5 and Nokia 6 next month as well, priced at 6,490 and 7,990 baht, respectively.
Mr Gupta said Nokia phones will be retailed through three mobile operators and distributors such as JayMart and TG One.
"We aim to be one of the top three players globally and in Thailand within the next few years," he said.
Kantawee Saengsai, marketing manager of Nubia Thailand, the local operating unit of Nubia Mobile of China, said Thailand is a fast-growing market for the company. It also has a presence in Indonesia and India.
Nubia is focusing on selling its phones through the online channel, with prices averaging 5,000-7,000 baht apiece.