So far, however, most of the revenue has not yet fallen into the hands of local developers or content providers because the existing structure of revenue-sharing flows mostly to the mobile-phone operators and the copyright owners.

Under the revenue-sharing structure, around 50 per cent of the service charge, for a music download, for example, belongs to mobile-phone operators, while 30 per cent is paid to music rights owners. Service providers or application developers therefore receive only 20 per cent.

This situation makes it difficult for local providers to survive since their share is so small. To survive, they must have strong funding to pay for 80 per cent upfront. This is impossible for local small and medium-sized companies.

It appears that if this situation continues, the digital-content industry will be dominated by international companies that have the money to pay -- not only for upfront costs, but also for new product and service development.

Realising this problem, a group of struggling local mobile-application developers and digital-content providers have come up with the idea to form an association to help address these problems.

They believe this situation requires government support to help them stay in business and create competitive advantages. They hope the new digital-content association will be a mechanism to push the government to pay more attention to the area.

Pongrapee Thongsrinoon, the chief executive officer of Popidols, a member of the group that set up the new association, said they were in the process of formalising the association. He expects the association will be up and running by early next year.

The association, he said, would help identify problems in the digital-content industry and help the government to find answers to the problems.

"On the industry side, we hope to call on the government to develop a method to determine a new revenue-sharing structure which will allow more revenue to come to local developers," he said.

In countries like Japan, South Korea, and China, where mobile applications and the digital-content industry have grown dramatically, the government has determined the ceiling that mobile operators can charge for applications, and service providers for network usage. This helps application developers and providers to gain a higher margin and allows local businesses to grow.

In Japan, mobile operators can take only 12 to 15 per cent of revenue, while in South Korea and China the proportion is 30 per cent.

"To increase this business in Thailand, we should study other countries' models and apply the best practise to drive our local businesses," Pongrapee said.

In addition, funding from the government is a major factor to boost the industry. Currently, local developers, mostly small and medium businesses, still lack funds, and this impairs their ability to conduct more research and development to improve their products.

It's accepted that many local companies can develop applications of good quality, but when they come to launch their products in the market, they are below standard. Pongrapee said that because they didn't have the money for research and development, they had to complete their product too quickly, because they needed to gain income.

"This situation really hurts local businesses because if they don't do R&D, they will not have good products to compete in the market. So the risk is that the market will eventually be dominated by international companies, who have better products and services," he said.

To tackle the problem, the government needs to offer more funding support to encourage local businesses do more R&D for product development.

"As a local business, we would like to see a clear vision from the government to support and promote this industry so that we can eventually put Thailand on the world map as a digital content development country," he said.