AIS targets 10‐12 million 3G subscribers in 2013

AIS has revised its target for 2013 in response to positive developments. 

In second quarter of 2013, AIS’s subscriber base increased to 37.7 million with a net addition of 548,000 subscribers. Second quarter 2013 total revenue was THB 36,007 million, an increase of 4.5% year-over-year, underpinned by a growing demand for mobile internet.

Since the official launch of the new 3G 2.1GHz service back in May 2013, revenue from the service has gradually increased and accounted for 8% of service revenue by the end of second quarter 2013.

Data is key growth driver as voice slows

In second quarter 2013, voice revenue was THB 18,202 million, a decrease of 1.4% year-over-year, reflecting a saturated voice market. Quarter-on-quarter, voice revenue dropped 2.6% mainly from the prepaid segment.

In first half of 2013, voice revenue was stable at THB 36,881 million, representing 65% of service revenue, compared to 70% in first half of 2012.

Postpaid voice revenue in first half of 2013, grew 7.8% year-over-year due to growing smartphone package subscription, particularly from 3G‐2.1GHz subscribers who generated a higher ARPU.Prepaid voice revenue decreased 3.4% year-over-year because of natural migration from high value prepaid users to postpaid users.

Social applications and smartphones

Non‐voice revenue stood at THB 7,921 million, an increase of 25% year-over-year and 3% quarter-on-quarter. In May 2013, AIS launched the new 3G‐2.1GHz services which stimulated higher mobile internet usage. 3G received a very positive response from customers with 3.9 million subscribers in second quarter of 2013.

Due to declining smart device prices and rising popularity of social applications, smartphone penetration increased to 22% from 19% in first quarter 2013.

In first half of 2013, non‐voice revenue was THB 15,608 million, an increase of 27% year-over-year, driven by an impressive mobile data revenue growth of 59% year-over-year. Messaging revenue contracted year-over-year for two consecutive quarters, reflecting SMS data cannibalization.

Blended ARPU

Blended average revenue per user (ARPU) in second quarter 2013 decreased to THB 244/month, due to seasonality. Year-over-year, blended ARPU decreased 2.8%.

Comparing AIS 3G (2.1GHz) and 2G (900MHz) subscribers, 2G subscriber ARPU decreased as high value customers and smartphone users moved to 3G-2.1GHz.

  • 3G postpaid ARPU was THB 792/month, compared to the 2012 average postpaid ARPU of THB 676/month.
  • 3G prepaid ARPU was THB 216/month, compared to the2012 average of THB 207/month.

Blended minutes of use (MOU) also dropped quarter-on-quarter due to seasonality. Year-over-year, blended MOU decreased 3%.

10‐12 million subscribers instead of 8-10 million

AIS has revised its guidance for 2013 in response to the positive developments. The target for 2.1GHz subscribers in 2013 has been increased to 10‐12 million up from the previous 8-10 million, due to a positive response from consumers and a faster network coverage rollout than targeted.

Despite a higher OPEX from the 3G‐2.1GHz launch, EBITDA in the first half of 2013 grew 3.9% Year-over-year and net profit increased 8.4% Year-over-year.

The EBITDA margin has also been revised up to 43% because of a lower inter-connection rate (IC) from THB 1/min to THB 0.45/min, effective from July 1, 2013 and a lower roaming rate, despite a higher network OPEX and marketing expense.

The CAPEX guidance of THB 70 billion is maintained to achieve the target of 97% population coverage by 2015, while AIS expect to achieve service revenue growth guidance at 6‐8% from improved non‐voice growth, although this is likely to be offset by a slower voice growth.

Accelerating network roll-out

AIS’s new 3G‐2.1GHz network is now available in 60 key provinces, nearly 3.9 million or 10% of total subscribers have registered as of second quarter 2013. AIS is accelerating the network roll‐out and expect their 3G‐2.1GHz service to be available in all urban areas nationwide within 2013.

Author: Allan Rasmussen
Managing director at Yozzo. Allan’s expertise includes the development and execution of growth strategies, market insights, trends and opportunities, new business models and strategies
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