AIS, the largest mobile player in Thailand, suffered a sharp decline in profit in the third quarter despite strong overall revenue growth, as unlimited data plans pushed ARPU lower and led to a decline in mobile revenue.
The market leader’s net profit dropped 9 per cent year-on-year to THB6.8 billion ($207 million) due in part to higher network depreciation costs. Total revenue grew 9.2 per cent to THB42.1 billion, driven by a 182 per cent jump in interconnection charges and equipment rentals (THB3.11 billion), a 17 per cent increase in device sales (THB5.87 billion) and a 26 per cent gain in fixed broadband revenue (THB1.12 billion).
Mobile revenue, excluding interconnection, was flat at THB30.9 billion (down 0.2 per cent), which AIS attributed to an increase in subscriptions to fixed-speed unlimited data plans.
In a statement, AIS said growth in the plans limited its ability to increase ARPU with higher data usage. Because uptake of low-tier unlimited packages was high during the quarter, it expects ARPU pressure to gradually ease.
Prepaid ARPU declined 3.8 per cent to THB182: post paid ARPU dropped 5.1 per cent to THB560.
Post paid growth
Its total subscriber base rose 1.1 per cent year-on-year to 40.6 million at end-September. Post paid subs grew 9 per cent to 8 million, while prepaid subs fell by 327,000 to 32.6 million. The post paid growth was driven by handset discounts and migration of prepaid customers.
Penetration of 4G users rose from 42 per cent in Q3 2017 to 57 per cent in the recent quarter.
The company lowered its core service revenue growth guidance for the full year to between 3.5 per cent to 4.5 per cent (previously 5 per cent to 7 per cent) due to the impact of unlimited plans. It also expects device sales to decline, with near zero margins. Capex (excluding spectrum payments) is forecast at THB25 billion.
Network capex for the first nine months of the year was 30 per cent higher than in the same period of 2017 at THB16.5 billion.