Overview
In Thailand, the digital economy’s contribution to GDP in 2023 was approximately six percent of national GDP, or $36 billion, and is expected to reach approximately 11 percent of GDP in 2027. Following the Covid pandemic, Thailand swiftly adopted digital technologies in both the public and private sectors. This shift has been encouraged by government support aiming to establish Thailand as a regional ICT hub. Consequently, the ICT sector has grown, driven by technology adoption across industries, increased smartphone and internet usage, and a booming e-commerce sector. This growth has attracted a competitive landscape with both local and international players like Huawei, ZTE, Intel, Ericsson, Cisco, Samsung, and HPE vying for market share.
Market Challenges
Regulatory environment
Data privacy
The Personal Data Protection Act (PDPA), in effect since June 2022, is Thailand’s first law expressly intended to govern data protection. The law is heavily influenced by the EU’s General Data Protection Regulation (GDRP). Key aspects of the PDPA include rules surrounding data processing, collection, storage, and consent protocols. The PDPA mandates that data controllers and processors who use personal data must receive consent from data owners and use it only for expressed purposes, with financial penalties for non-compliance.
AI regulation
1). The Electronic Transactions Development Agency (ETDA) released the draft AI Promotion Act and held associated public hearings in 2023. The objective of the Act is to promote the development and use of AI, and it includes provisions on an AI sandbox, data sharing, standards, contracts, and risk management. ETDA is working on a revised draft with no specific timeline set for completion.
2). The Office of the National Digital Economy and Society Commission (under the Ministry of Digital Economy and Society) is in the process of drafting an AI Business Law intended to prevent public harm caused by AI business implementation. The draft law covers AI system business classifications, market entry and registration, transparency, monitoring, and compliance assessment. The authority is working on the draft, but there is no specific timeline for completion.
Cross-border data flows
The Personal Data Protection Act allows for cross-border transfers to destination countries that offer an adequate level of data protection.
Cybersecurity
In 2021, the National Cybersecurity Agency (NCSA) published regulations under the Cyber Security Act (CSA) that define critical information infrastructure (CII) and establish a national coordination center to monitor and resolve cyber threats. The seven sectors classified as CII are national security, essential government services, banking and finance, information technology and telecommunication, transportation and logistics, public utilities (electricity, petroleum and natural gas, water utilities), and health.
Online harms regulation
Thailand’s Computer Crime Act provides the government with expansive authority to regulate online content. The Act establishes a liability shield for online service providers with respect to non-IP-protected, user-generated content if they comply with requirements to remove certain content within specified timeframes. The mandated timeframes vary across content types and are as short as 24 hours for some types of content.
Standards development
Thailand Industrial Standards Institute (TISI) falls under the Ministry of Industry, Thailand. The authority has a key role in developing both mandatory and voluntary standards to serve the needs of specific industries and the country’s overall economy. TISI normally publishes a work program every six months for standards development in the country. These standards are established to support government policy in aspects of consumer protection, environmental protection, industrial promotion, and natural resources preservation.
Subnational market regulation
Generally, Thai regulations are readily available for public review, though typically only in the Thai language. Thai government agencies are legally required, in most cases, to hold public consultations before finalizing draft regulations or laws. However, public consultation periods are, in some cases, short, making it logistically challenging for foreign stakeholders to participate.
Market entry
Partnering with a local agent or distributor is generally the most effective way to enter the Thai market and reach potential Thai buyers. The agent or distributor can facilitate and expedite market entry with their extensive market knowledge, established distribution networks, and relationships with key business and government officials.
Public sector procurement
The key to successful bidding on Thai government contracts and supply tenders is to have a reputable local representative with good access to the procuring agency and knowledge of specific procurement requirements. Without this intermediary, it is very difficult to win a government project since procurement is decentralized among more than 200 government agencies and state enterprises. Representatives are accepted as legitimate players in the bidding process and often provide an early “heads up” to U.S. firms when they hear of attractive tenders. Before tenders are issued, agents help to ensure a principal’s product will meet the required tender specifications.
Companies bidding on government projects should note that technology transfer, training, and after-sales services are important features considered in the review of all proposals. U.S. companies should plan to build additional training costs and expenses into the bid. American firms may find it more cost-effective to send engineers or specialists to train larger groups of employees at a plant or specialized government facility, such as a military installation.
Digital Trade Barriers
Data localization
There are currently no requirements for foreign IT providers to localize their data or turn over source code. However, Thai companies and government agencies may still request companies to store and process data locally, even when not legally required. Pending regulations under consideration by NCSA may mandate that “high” impact information systems with “seriously severe” effects must use a local data center and a backup data center in “Thailand” or “ASEAN, including Singapore and Hong Kong.” The scope of these regulations remains under consideration.
Technology barriers
Barriers to Internet Services
Telecommunications is considered a national security sector and is therefore reserved for Thai ownership. Pursuant to the Telecommunications Business Act (2006), the Thai government generally prohibits foreigners from working or offering professional services in the sector. Foreign entrepreneurs in Thailand should consult with legal service providers or contact the Department of Foreign Trade at the Ministry of Commerce for further information.
Third country bias/influence
In Thailand, approximately 70-80 percent of digital equipment and solutions are imported. Products from the United States, China, Japan, Korea, Taiwan, and other European countries are the most popular because of consumer perceptions about the quality and innovation of technology in these countries. U.S. equipment is perceived to be of high quality with the best technology, but the Thai market is price-sensitive, and equipment and solutions are often procured from the lowest bidder. Non-U.S. companies may be heavily subsidized and supported by their governments in various ways to secure Thai government projects.
Digital Trade Opportunities
Cross-Sector Enabling Technologies, i.e., digital technologies that enhance productivity, efficiency, and functionality across different industries. Examples (including alignment with CETs):
Communications and Networking Technologies
Under Thailand’s national ICT strategy known as Thailand 4.0, the Thai government envisions Thailand becoming an ASEAN digital hub. According to the Office of the National Broadcasting and Telecommunications Commission (NBTC), wider adoption of applications using 5G could contribute $9.3 billion to the Thai economy or 10 percent of GDP by 2035. With the support of the Thai government, the plan encourages digital creativity and innovation, the development of new technology, and the move toward a digitally driven economy.
After the global pandemic, there has been widespread adoption of digital solutions in key economic sectors, including retail, manufacturing, and transport and distribution. In 2023, the number of internet users reached 10.4 million, an increase of 1.6 percent from 2022. The penetration rate of internet broadband in the country was estimated at 48 percent, while the total industry value of the broadband market amounted to $1.7 billion at the end of 2023.
Currently, 5G in Thailand is deployed primarily in the internet and network services space. Most Thai businesses, particularly small and medium-sized enterprises, are still in the early stages of digital transformation, with many opportunities for 5G technologies to improve their operations.
Advanced Computing
Advanced Computing in Thailand is emerging across industry sectors, and most companies want to adopt and transform themselves with advanced technologies. There is potential for advanced computing, including AI and machine learning, high-performance computing, edge computing, and IoT.
Human-Machine Interfaces
In Thailand, the Human-Machine Interfaces (HMI) sector market is expected to grow rapidly as industries adopt HMI applications/solutions in manufacturing and automation processes.
Artificial Intelligence
The Thai government has approved the Thailand national AI strategy and action plan (2022-2027) for driving AI country development plan, supervised by the Ministry of Higher Education, Science, Research, and Innovation (MHESI) and the Ministry of Digital Economy and Society (MDES). In the Thai FY 2023, a budget of approximately $216 million was allocated for AI initiatives among 68 government agencies at the department level. These projects have involved the development of infrastructure and data to support AI adoption and utilization, plus training for government officials on integrating AI technologies in the agencies.
6GHz:
NBTC has opened the lower portion of the 6GHz spectrum to unlicensed applications but has yet to decide regarding the remaining portion. The authority is also likely to look to the results of two ongoing pilot projects being conducted on the 6GHz spectrum.
Open Radio Access Networks (OpenRAN): OpenRAN is a technology that holds the potential to bring further competition to areas where Huawei and ZTE have been traditionally dominant. Thai mobile operators, while interested in the technology, are not yet convinced of its commercial viability.
5G Spectrum: Nearly 90 percent of the Thai population enjoyed 5G coverage at the end of 2023. Data consumption per subscription in Thailand is expected to grow from 32.7 GB per month in 2022 to nearly 80 GB per month in 2025.
The National Broadcasting and Telecommunications Commission (NBTC) expects to auction licenses for three spectrum bands: 850 MHz, 2100 MHz, and 2300 MHz in the first quarter of 2025. Most telecom operators are eager to participate in the auction and plan to obtain sufficient spectrum to support the rollout of 6G services.
Other opportunities: Quantum computing, Open Radio Access Network (ORAN), information communication technology (ICT), internet access, 5G and 6G, sub-sea cables.
Specific Industry Sub-sectors:
Cybersecurity
- According to the (NCSA, the number of cybersecurity incidents in Thailand increased significantly, from 135 incidents in 2021 to over 772 incidents in 2022, with most being data breaches occurring through educational and public sector websites.
- Spending on IT security and risk management technology in Thailand is expected to surge due to the growth of remote work, cloud computing, and risk management. The key industry sectors investing in cybersecurity technologies are the healthcare sector, financial institutions, IT and telecommunications, and the public sector.
- In Thailand, approximately 70-80 percent of cybersecurity equipment and solutions are imported. U.S. equipment is perceived to be of high quality with leading technology, but the Thai market is price-sensitive.
Digital Economy-related trade events.
- Thailand Smart City Expo 2024, November 6-8, 2024
- DigiTech ASEAN Thailand & AI Connect 2024, November 20-22, 2024
- Money 20/20 Asia in Bangkok, April 22-24, 2025
Helpful Resources:
- I&A’s Office of Digital Services Industries (ODSI)
- National Trade Estimates Report – Digital Trade Barriers
- White House CET List, e.g., Artificial Intelligence -> Machine Learning