AIS’ profits hit by price war

17 Aug 2006

Thailand’s leading mobile operator Advanced Info Service (AIS) reported a 5% drop in second quarter earnings, as the domestic price war ate into revenues and margins. AIS posted a net profit of THB4.13 billion (USD110 million) for the April-June period, down from THB4.35 billion a year earlier and THB5.3 billion in the preceding quarter. Revenues fell nearly 7% to THB18.4 billion, while costs rose 7%, due mainly to higher marketing expenses, the firm said in a statement. ARPU fell 16% from the first quarter. The latest price war in Thailand took off in late March when operators rolled out new packages to deter users from switching to rivals. AIS expects earnings to recover in the third quarter, but the long term outlook remains shaky on worries that price competition could escalate again. The company’s full-year net income is forecast to rise 2% to THB19.3 billion, according to 15 analysts polled by Reuters. AIS had 17.318 million subscribers at the end of June, up 9% from a year earlier. It competes with second placed DTAC (which had 10.622 million subscribers at the same date), True Move, Hutchison CAT Multimedia and smallest player Thai Mobile.

Thailand, Advanced Info Service (AIS)