Why Thailand to set up Data Center company?

The ASEAN, has a booming e-commerce economy

The increasing middle class will be the driving force behind digital firms. As the globe transitions to the post-COVID new normal, this segment of consumers will make more digital purchases and spend more time online. To highlight some key statistics, total streaming time on mobile devices in ASEAN countries such as Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam increased by 60% from January 2020 to April 2021, and consumers spend an average of 4.2 hours per day on mobile screens, which is 1.2 times the global average.

Thailand is one of ASEAN’s most prosperous economies, and it aspires to be an ASEAN center in a variety of ways. Thailand’s position as a significant producer of agricultural and industrial products in the globe helps it to be one of the strongest economic countries in ASEAN. As the country’s sustainability grows, it will lead a national development plan, Thailand 4.0, using the digital sector as one of the growth methods. Thailand has a high proportion of internet users. According to Hootsuite, the population of Thailand is 69.88 million people, with 90.66 million using mobile connections during the pandemic epidemic. The fact that the number has climbed since 2020 demonstrates that digital has become a part of daily life in areas such as education, grocery, lending benefits, food delivery, and online payment and financial services, among others.

Those elements constitute the industry’s primary obligation to support today’s ever-increasing digital in everyday life, including in the future. Another important aspect that must be properly supported in the future is the Data Center and Cloud sector, which will stimulate the expansion of the digital industry not only in Thailand, but also in neighboring countries such as Myanmar, Cambodia, Laos, and Vietnam.

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Thailand, a market of digital opportunity

ASEAN’s digital economy, particularly Thailand’s, are growing. According to the e-Conomy SEA 2020 Report, the total number of internet users in ASEAN would increase from 360 million to 400 million by 2020. This is exacerbated by the fact that the COVID-19 outbreak prompted a large number of individuals to use online digital services for the first time. Most crucially, the survey states that 94% of new users would continue to utilize digital services long after the pandemic is over. The scale of Thailand’s addressable digital market is immense, as seen by the latest numbers from January 2021 supplied by Hootsuite (2021).

➤ The internet is used by 69.5 percent of the population, and this ratio is expected to rise as a result of the government's online outreach activities.
➤ 88.1 percent of individuals aged 16 to 64 searched for items or services online.
➤ 74.2 percent of individuals aged 16 to 64 bought a goods online using a mobile phone app.
➤ E-commerce expenditure is greatest in the categories of travel & lodging, electronics & physical media, and food & personal care (which also has the fastest growth rate among all e-commerce transaction categories).

Thailand's Exciting Digital Ecosystem

Thailand’s thriving digital ecosystem is continually changing because a digital ecosystem is the establishment of an ecosystem that combines numerous systems and services to enable convenience for customers in multiple applications via a single channel. Thailand is also one of the countries that spends money on internet platforms, such as smart phones or websites. Since Thailand is a leader in 4G and cellphones in such a vital part of people’s lives.

Every aspect of regular Internet use has become normalized. Service providers in a variety of sectors, including the government, commercial sector, and startup, have turned to platform development to give customers with quick access to use. The country will formally adopt 5G in the future, and the digital ecosystem will be established and ready to support development. According to the aforementioned Hootsuite research, Thailand is now one of the ASEAN Community’s top online platform users. Among the different platforms that have been built for the convenience of sectors are:

1) General banking finance has its own apps as well as a variety of private services that allow customers to execute transactions without needing to meet in person. Both banks and other commercial service providers, such as the e-payment system (PromptPay) in Thailand, which has 39 million registered customers, include the payment system that is convenient and quick.

2) Online shopping is one of the businesses that has grown in popularity and availability to the Thai market. There are currently apps from numerous handy suppliers, such as Shopee and Lazada, as well as other consumer goods providers with their own apps.

3) There is also a communication app that users may use for leisure as well as for business. For example, well-known platforms such as LINE, Instagram, Twitter, and Facebook. Thailand is also integrating digital to utilities such as government agencies, boosting payment alternatives and contacting agencies through apps such as water, electricity, and complaints.

Create data center Thailand

In addition to the transportation infrastructure, several service sectors used online platforms to assist the distribution of consumer products, including consumer goods and food delivery to customers, during the COVID-19 outbreak. The ecosystem plays a significant role in Thailand’s future transition to a completely digital society by allowing people to work from home and adopting digital technology in other areas. This is due in large part to the availability of excellent collaborations with creative enterprises, trailblazing ICT entrepreneurs, and significant client demand. During the COVID-19 epidemic, e-commerce in Thailand became a fundamental part of everyday life and grew considerably, and other Thai entrepreneurs also reached more clients. This most likely indicates that prospects in data centers and cloud services will be a component of digital growth.

Thailand's Data Centers and Cloud Services

The majority of organizations or enterprises that utilize the Private Cloud are those that demand high security and data security, such as government organizations, security-related agencies, or private-sector firms that need to keep their information hidden at a high degree, and so on.

For small to medium-sized firms or corporations looking to cut expenses, Public Cloud is the way to go. However, if there is a worry about data leakage or the need to keep some information hidden, Hybrid Cloud is the way to go. Also, in terms of flexibility and cost-cutting.
Each business has a system that performs a range of jobs that are ideal for various types of Cloud systems, for example.

SaaS (Software as a Service)

This solution includes a ready-to-use application with the specified capabilities, with the added benefit that the service provider handles everything. Fees for software, debugging, and data storage are often depending on the number of users or the quantity of labor performed:

➤ Email systems like Microsoft Exchange and Google Gmail.
➤ Office automation systems like Microsoft Office 365 and Google Apps.
➤ A customer relationship management (CRM) system, such as Salesforce.com
➤ Workday, for example, is a personnel management solution.

PaaS (Platform as a Service)

A hybrid app system or a brand-new application (New System). Its goal is to serve a huge number of people, maybe hundreds or even millions. This might be a Web App or a Mobile App. Because the cloud allows for more scalability, this sort of solution is ideal for deployment. It is also more cost-effective in terms of investment:
Its goal is to serve a huge number of people, maybe hundreds or even millions. This might be a Web App or a Mobile App. Because the cloud allows for more scalability, this sort of solution is ideal for deployment. It is also more suitable in terms of investment for well-known PaaS platforms such as:

➤ Analytics and Big Data systems such as Microsoft HDInsight, Amazon Elastic MapReduce.
➤ Data Management systems such as Amazon RDS, Amazon Redshift, Microsoft Azure Database.
➤ Mobile Services systems such as Microsoft Mobile Services, Amazon Cognito.
➤ Application Service systems such as Microsoft Cloud Services, Pivotal Cloud Foundry.

IaaS (Infrastructure as a Service)

The system makes use of a virtual machine, often known as a VM, on the cloud to enable quick and low-cost hardware acquisition:

➤ Microsoft Azure or Amazon AWS
➤ Disaster recovery is required. However, many agencies may not have adequate room or funds. Can bring the Cloud system to be utilized as a disaster recovery site.
➤ From the development phase to testing and QA, a software development system requires either a server or a storage device.

As technology and digital platforms have become critical components in the fight against COVID-19. The number of people who utilize the internet has grown dramatically. As a result, the demand for space to develop a data center has surged significantly over the world, including Thailand, and it is estimated that the ASEAN Data Center Market will be valued up to 5.4 billion dollars in 2024.

China is the epicenter of the Asia Pacific region’s largest data center market. However, there are other significant competitors, such as Singapore, Japan, and Hong Kong, despite the fact that neighboring nations, Singapore and Hong Kong, have established a reputation for offering data center services in recent years. However, these countries are confronted with land-development constraints. This power for Thailand to promote with tax breaks and other specific non-tax breaks by the Board of Investment (BOI) would assist investors in making informed selections. Because of Thailand’s strategic location, it is feasible to expand data center services to neighboring nations. It is also 30 kilometers from the underwater cable and more than 100 meters above sea level, which reduces the risk of flooding. In the near future, 5G technology will be employed, paving the way for Internet of Things (IoT) infrastructure in Thailand, and enabling 5G will lead to the transformation of the data center in both areas and applications with space design to support 5G frequency.

The Thai government is now taking the digital economy seriously, with the goal of pushing Thailand to become a “ASEAN’s Digital Hub,” with plans to create enormous data centers (big data) that satisfy international standards.

Big data must be stored in “Data centers” with high standards and security, human resource development for the digital labor market with expertise in electrical, engineering, and IT, and with Thailand’s current potential and readiness, it can be confident that Thailand will be able to create regional digital business growth, similar to Singapore and Indonesia, in the near future.

Internet infrastructure of the highest quality

Thailand has the world’s second fastest average download speed for fixed broadband connection, according to the prominent website speedtest.net.

There are now 10 international internet gateways, 11 internet exchange points, and over 200 Internet Service Providers in the United States (ISP).

As the foundation of these operational infrastructures, the nation is linked to 13 undersea cable networks with three landing stations.

Most importantly, Thailand is linked to the AAE-1 international underwater cable, one of the world’s most significant and newest cables linking East Asia to Europe.

CAT is also linked to six international undersea cable networks capable of transmitting data at 54 terabits per second. FLAG (Fiber-Optic Link Around the Globe) cable, SEA-ME-WE 3 (Southeast Asia- Middle East- Western Europe 3), TIS (Thailand-Indonesia-Singapore), SEA-ME-WE 4 (Southeast Asia- Middle East- Western Europe 4), AAG cable systems (Asia- America Gateway), and APG (Asia Pacific Gateway).

Thailand’s government, for its part, continues to expand the capacity of digital infrastructure in a variety of ways, including expanding high-speed internet networks in various villages across the country, providing free Wi-Fi at 50,000 locations under the “Smart Sign On” policy, including non-formal and informal schools, border patrol police schools, and digital community centers, doubling international bandwidth to meet the demands of growing economic activities, and establishing digital Thailand infrastructure Fund. These efforts will play part in expanding the size of the addressable market in the future.

Data Center investment opportunities

One of the most important drivers of the global digital economy is data center and cloud services. It offers fundamental infrastructure to a wide range of services, from the most basic to the most complex. Existing digital services such as e-commerce, e-payment, and digital video streaming will drive demand for these services, as will new and soon-to-be widely used services such as the Internet of Things.

Furthermore, their sources are determined by both consumer and industrial factors. As previously stated, Thai and ASEAN customers are driving an increase in service digitalization.
Simultaneously, organizations and sectors are undergoing enormous digital transformations, which will raise demand for data storage and cloud-based digital services. To consider utilities such as water, energy, and location in the business operations while investing in a Data Center and Cloud service in Thailand.
Thailand has an Eastern Economic Corridor (EEC) program that encourages such investments. Including agencies that serve the government sector in their requests for water, power, and assistance from the Office of the Board of Investment.

Paying taxes is simple and straightforward. Including the preparedness of persons with the knowledge and capacity of more than 259,878 graduates in 2020, capable of assisting investors in operating data center and cloud service enterprises in Thailand.

The following is a list of existing data centers and cloud service providers in Thailand. It demonstrates the country’s ability to accommodate Thailand investment in these areas. However, more is always needed to prepare for future growth.

SUPERNAP (Thailand) provides data center services to major corporations, international corporations, governments, and cloud service providers with mission-critical IT requirements.

INET’s services include Cloud Solutions, comprehensive internet connection service, and the provision of INET Data Operations Center (INET-IDC) for customers seeking efficient services in accordance with international standards.

(TOT + CAT) work together to decrease redundancy in both investment and to prevent overlapping issues with certain types of services.

CSL operates the most data centers in Thailand.

PROEN Data Center Cloud HM Company is a prominent supplier of Cloud Services in Thailand. Domestic Cloud, Global Cloud, and IT as a Service options are available with 24-hour service. The first service is provided in collaboration with SUPERNAP (Thailand) MFEC: the firm is Thailand’s largest listed System Integrator. Cloud service provider with a one-stop shop. Cloud consultation, design, construction, and administration are all part of the service.

NTT Global Data Centers (Thailand) Limited is an acronym for NTT Global Data Centers (Thailand) Limited. NTT maintains 98 data centers in the Asia Pacific area, totaling 182,000 m2. In addition to data center products, the entire NTT platform can supply a wide range of technological solutions.

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BOI Support for Data Center business

BOI Incentives

The Thailand Board of Investment provides a variety of extremely appealing investment incentives, including exemption from import duties on machinery, exemption from import duties on raw materials used in export manufacturing, and other non-tax incentives such as BOI company facilitation services.
Both investments in data centers and cloud services may be eligible for an 8-year corporate income tax exemption with no upper limit on the amount of CIT that can be exempted.

Government Support

The agencies listed below are important government players in Thailand’s digital ecosystem. They will aim to assure Thailand’s digital economy’s development by providing a variety of resources.

The Digital Economy Promotion Agency (a public organization) fosters the growth of the digital economy via innovation and digital technologies. Its funds comprise a digital manpower fund, a digital manpower executive fund, a digital transformation fund, a digital infrastructure fund, and a digital RDI fund.

The National Science and Technology Development Agency (NSTDA) is a key driver of national science and technology capabilities, providing R&D support in five core areas: agriculture and food, energy and environment, health and medicines, bio-resources and communities, and manufacturing and service industries.

The National Electronics and Computer Technology Center (NECTEC) to promote research and development possibilities in electronics and computer technology. It also creates a one-of-a-kind relationship between research communities and companies.

National Innovation Agency (NIA) (Public Organization): The NIA, which operates under the Ministry of Science and Technology, is tasked with conducting and promoting activities that accelerate innovation in industry, business, and government sectors. In addition, the NIA regularly collaborates with the commercial sector. Bangkok Cyber Tech District, a startup park developed in cooperation with True Digital Park, is one example.

Specific regulatory process of Data Center

The Telecommunications Business Act B.E. 2544 (2001) distinguishes three types of licenses for the NBTC authorization. The distinction between them is based on whether the operator manages its own telecommunications network and how influential it is in the broader competition environment.

Type I. licenses are only awarded to operators that do not own and manage their own telecommunications network.

Type II. licenses are awarded for private networks or networks whose presence has no influence on the general competitive environment, independent of the telecommunication network’s ownership status.

Type III. licenses are granted to operators who operate their own telecommunications network and whose presence has the potential to effect the overall competitive environment.

To apply for a Telecommunication Business License, submit the application to the NBTC together with the necessary evidence and documentation. The entire procedure takes around ten days. As part of the application procedure, the following documents and information must be submitted.

1. Corporate papers, including the certificate of formation, memorandum of association, and shareholder list
2. Additional corporate entity information: corporate profile of the parent firm as well as subsidiary; corporate and ownership structure; business model; names of directors; and organizational charts
3. Operations: service kinds and locations supplied, target consumers, and other pertinent information
4. Technical information includes a general synopsis, network diagram, network deployment (route and international exchange utilized), point of connectivity, and a list of connected equipment.
5. Business plan:

➤ Financial projections include funding, an investment strategy, and an expected ROI for the first five years (10 for Type III applicants), as well as predicted NPV, IRR, and payback duration.
➤ Market research and marketing strategy.
➤ Service provision plans over the next five years (10 for Type III applicant).
➤ Plan for system security, network security, network dependability, emergency and catastrophe response, and consumer protection.

Privacy and Data Protection Laws

According to an article published in Data Guidance by Suwanprateep (2020), the Personal Data Protection Act (PDPA) 2019, which goes into effect on 1 June 2021, is Thailand’s first full-fledged personal data protection law. The main points are given here.

The Personal Data Protection Committee, which has yet to be created, will be the primary regulator of the PDPA.

The PDPA defines important rules concerning permission, data sensitivity, public interest, and the grounds for judicial action in the event of a breach.

The PDPA includes requirements for processing notification, data records, impact assessment, appointment of data protection officers, breach notification, retention, and management of sensitive persons’ data as a data controller and processor.

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