AIS lights the fuse of new price war

2 Oct 2006

Thailand’s largest mobile operator Advanced Info Services (AIS) has launched an aggressive pre-paid promotional package, aiming to attract up to 800,000 new subscribers in the next two months. The promotion, valid until the end of November, offers new SIM owners calls for a flat rate of THB1 (USD0.026) to any network between midnight and 2pm and THB1 per minute to any network at all other times. A company spokesperson said: ‘We want to ignite a price war to test our network capacity and those of our competitors… We’re very confident we can handle the rising call traffic from the promotion.’ AIS vice president Titipong Khiewpaisal said that the promotion was aimed at erasing the market perception that AIS was the priciest cellular service provider in the country. AIS hopes to add 1.2 million net subscribers by the end of this year. According to TeleGeography’s GlobalComms database, at the end of June 2006 AIS had 17.318 million subscribers, ahead of Digital Total Access Communications (DTAC) with 10.622 million, True Move with 5.406 million and Hutchison CAT Wireless with 738,000.

DTAC’s chief commercial officer Thana Thienachariya responded to AIS’ latest announcement by saying that the second-placed operator would launch an even lower rate call promotion to be announced next week. True Move is also expected to follow suit and at least match both offers. Thana added that he was concerned a new price war would affect network service quality and result in high levels of incomplete calls, as happened during a fierce tit-for-tat price battle earlier this year. The tariff-slashing tactics of the cellcos also hit their financial performance, resulting in thinner second quarter net profits.