Thailand’s dtac reported sluggish financial results last year as the economic slowdown since the May coup and intensive competition led to zero connection growth and lower ARPU.

The Telenor subsidiary, the country’s second largest operator with a 29 per cent market share, managed to post a 1.5 per cent increase in net income to THB10.7 billion ($327 million). But revenue fell 4.4 per cent to THB90.4 billion due to softening service revenue and lower interconnection (IC) income, which dropped 36 per cent to THB6.7 billion. The IC rate was reduced to THB0.45 from THB1.00 in mid-2013.

Its connections base was flat at 28 million last year, and blended ARPU fell 4.1 per cent to THB202 ($6.20).

The number of customers on its 2.1GHz network almost doubled to 20.1 million over the past year, which helped lower regulatory costs (network sharing charges) by 28 per cent to THB15.5 billion. Regulatory costs as a percentage of service revenue fell from 31 per cent in 2013 to 22.8 per cent last year.

The company said revenue from mobile internet service was the main growth driver, while voice and international roaming revenues declined.

Data revenue increased 23 per cent to THB27.8 billion and now accounts for 41 per cent of service revenue (up from 23 per cent a year ago). The company attributed the growth to its 3G network expansion, growing demand for social media and streaming content, and rising smartphone penetration, which expanded from 33 per cent in 2013 to 48 per cent at the end of last year.

International roaming income dropped 30 per cent to THB1.466 billion.

Sales of handsets and starter kit revenue increased 9.7 per cent to THB15.2 billion due in part to the iPhone 6 launch in Q4 and increased interest in handset bundled packages. The company noted, however, that handset margins turned to negative as it spent more to boost smartphone penetration and retain customers.

Its EBITDA was up 3.4 per cent to THB31.1 billion, and EBITDA margin improved to 34.3 per cent from 31.1 per cent in 2013.

dtac said its network expansion is 40 per cent completed and it is on track to have the targeted 6,500 bases stations installed by the end of Q1. Network capex during the year rose 14 per cent to THB4.77 billion.

It is planning a minimum total capex spend of THB14 billion this year based on what the company says is an infrastructure sharing model.