AIS reports 17.3% drop in 2Q profits as competition bites

11 Aug 2005

The effects of an ongoing price war between Thailand’s mobile operators has been blamed for a 17.3% fall in second quarter profits at the country’s largest wireless network operator Advanced Info Service (AIS). The company posted net income of THB4.17 billion (USD102 million) in the three months to June, down from THB5.04 billion for the corresponding period of 2004, and worse than analyst consensus forecasts of around THB4.43 billion. Revenues also took a hit, declining from THB24.10 billion to THB22.31 billion, on the back of a lower profit margin from price-cutting, higher adspend and falling handset prices.

The Thai mobile price war was initiated by the country’s second and third largest players, Total Access Communication and TA Orange in the first quarter, and intensified in April when AIS joined the fray with a THB0.25/minute airtime charge, down from its standard tariff of THB3/minute.

Thailand, Advanced Info Service (AIS)