Thailand’s dtac faced a 6.1 per cent drop in its net profit and a 4.3 per cent fall in revenue in Q3 as increased competition and a slowing economy weighed on its business.

The country’s number two operator, with a 30 per cent market share, reported a profit of THB2.58 billion ($79 million) and revenue of THB20.8 billion during the quarter. Dtac added 88,000 postpaid customers in Q3 but lost 347,000 prepaid users, pushing its overall sub base down 1.1 per cent to 27.78 million from a year ago.

Service revenue (excluding interconnection charges) fell 2.5 per cent to THB16.6 billion in Q3 and was also down 2 per cent for the first nine months of the year. Major factors were an 18 per cent drop in voice revenue to THB8.37 billion and a 38 per cent fall in international roaming revenue to THB291 million (with the political uncertainty impacting overseas arrivals).

The company’s EBITDA, however, increased 9.1 per cent to THB7.8 billion from last year, which it said was driven by lower regulatory expenses. Regulatory costs – covering revenue sharing, numbering fees and the USO fee — declined 35 per cent to THB3.6 billion. Its EBITDA margin rose from 33.3 per cent a year ago to 37.5 per cent. Excluding handset costs, its EBITDA margin was 45.1 per cent.

Mobile data revenue expanded 30 per cent and now accounts for 35 per cent of total service revenue. Data users during the period increased to 12.5 million and smartphone penetration rose to 41 per cent from 37 per cent a year earlier. Messaging revenue, which now accounts for just 2.3 per cent of revenue, continued to fall.

Postpaid ARPU decreased 7 per cent to THB610 while prepaid ARPU fell 8.6 per cent to THB160.

Revenue from the sale of handsets and starter kits increased 11 per cent in Q3 as consumers increasingly looked to purchase more affordable smartphones. But the revenue was down 10 per cent from Q2 as customers waited for the new iPhone models and discounted plans.

Network capex in Q3 increased 14 per cent to THB1.2 billion. The company said its capex for the year will be a minimum of THB13 billion since it has already committed to investing THB10 billion to roll out 6,500 3G/4G base stations in Bangkok and 30 major cities over the next two quarters. It currently has 16,500 3G base stations.

It expects service revenue for the full year to be slightly below last year’s level but its EBITDA margin will remain at 35-37 per cent.