AIS says strategy will change

Bangkok Post (14 December 2007)

Company prepares for market saturation.

Advanced Info Service, the country's largest mobile operator, plans to shift its focus in 2008 to maintaining its revenue share rather than increasing subscribers.

The company aims to capture at least half of the 159 billion baht spent on telecom services per year. AIS plans to expand aggressively into fixed-base wireless broadband services (WiMax) and third-generation mobile services as part of its strategy to become an integrated fixed-mobile provider.

The company would spend at least 10.5 billion baht building an additional 2,000 base stations, plus three billion baht on marketing budget next year. In addition, AIS has allocated funds to develop third-generation (3G) and wireless broadband WiMax networks once the National Telecommunications Commission starts granting 3G licences. As part of its plan to reposition itself from a premium brand to a mass product, AIS announced a ''price subsidy'' approach to attract the emerging pre-teen segment and increasing its share from 30% to 40% of the market next year. Chief executive Vikrom Sriprataks said Thailand's mobile-phone penetration was expected to reach 100% in 2008 with 64 million subscribers, up from 52.3 million by year-end. Total spending by customers of all mobile operators is projected to grow by 5% to 159 billion baht next year, up from 151 billion baht this year. ''We expect to maintain our share at 50% of the overall spending market next year, after achieving the target this year,'' Mr Vikrom said without elaborating on figures. AIS expects to have 24 million subscribers in a total market of 52.3 million this year. The company had 19.5 million customers in a market of 40 million in 2006. Mr Vikrom said AIS planned to start providing voice over Internet protocol (VoIP) services next year on both mobile and fixed-lines. Mobile services on 3G, WiMax and high-speed downlink packet access (HSDPA) would also be seen next year. President Wichian Mektrakarn said AIS planned to spend at least 10.5 billion baht to build an additional 2,000 base stations at skytrain stations and in untapped tourist destinations, bringing its total to 14,500 bases next year. He also said that AIS would focus on five key areas in 2008: network quality, service excellence, variety of products and services, privileges and corporate social responsibility. Somchai Lertsutiwong, executive vice-president for marketing, said AIS was moving toward a third-generation ''integration marketing'' strategy next year, a combination of functional and emotional marketing approaches. ''We aim to become a 'best offer' brand next year with segmentation pricing plan approach and free trial services, targeting pre-teen and SMEs segments,'' he said, adding that AIS would opt to subsidise some tariff plans in the pre-teen market. Mr Somchai said AIS projects revenue from GPRS and Edge networks to grow by 40% next year, driven mainly by surging mobile internet demand. In contrast, he said, the voice-based market would grow only 1% while data communication services would increase by 20% next year. AIS has restructured its business functions by separating into three divisions: fixed-line under Advanced Datanetwork Communication and Super Broadband Network; mobile phone and 3G services under AIS and Advanced Wireless Network; and solutions under Wireless Distribution Service, Advanced International Network and M-Pay Co.

Shares of AIS (ADVANC) closed yesterday on the Stock Exchange of Thailand at 96 baht, unchanged, in trade worth 394.39 million baht.

AIS expects usage to rise by 5 per cent

The Nation (14 December 2007)

The overall spending on mobile-phone services next year will reach Bt159 billion, against the predicted Bt151 billion this year, Advanced Info Service (AIS) predicts.

"People have spent more and more on mobile-phone services," CEO Vikrom Sripataks said yesterday, adding that spending last year stood at Bt144 billion.

However, a telecom analyst said the AIS forecast seemed conservative, as he expects growth to reach 11 per cent.

AIS has targeted a 50-per-cent share of people's spending on mobile-phone services both this year and next, Vikrom said.

The largest cellular operator - with more than 23 million subscribers - has initial plans to spend Bt10.5 billion next year on network expansion, with a view to increasing its numbers of cell sites by 15 per cent to 14,500, said executive vice president for operations Weerawatkiat Tipongthaworn. AIS's network expenditure last year was Bt30 billion.

President Wichian Mektrakarn said AIS was ready to invest in the roll-out of a 3G wireless broadband network once the telecom regulator grants licences. "We've no problem about financing the 3G network roll-out, but the point is the regulator has yet to issue the licences," he said.

Executive vice president for marketing Somchai Lertsutiwong said that next year competition among cellular operators would be much more intense in the big cities.

The total number of mobile-phone users in Thailand is expected to reach 64 million next year, up from 52 million.

Next year AIS will focus more heavily on the pre-teen segment, small and medium-sized enterprises, and the deeper rural areas, Somchai said.

He added that out of AIS's forecast non-voice service revenue this year, 29 per cent will be contributed by SMS, 18 per cent by high-speed networks for data access, 17 per cent by content downloads and 15 per cent by solutions for enterprises.

But the proportion will change next year when mobile-phone users will access much more data from their phones. This will prompt growth of high-speed network revenue to 40 per cent next year, while revenue from SMS will expand only 5 per cent, content download 10 per cent and enterprise solutions 25 per cent.

True bills payable at Power Buy

The Nation (14 December 2007)

True has opened customer-service shops in 20 branches of consumer-electronics shop Power Buy as part of an agreement to increase traffic.

Thiti Nantapatsiri, True's managing director for home, consumer and high-speed access business, said the arrangement reflected the convergence between service and hardware as True customers could shop for Power Buy products and then pay their True service bills in the same area.

True will open another 30 shops in Power Buy branches next year, he added.

True and Power Buy have about 100 and 79 branches nationwide, respectively.

True has a policy of bundling a wide array of its telecom services, from fixed telephones to cellular and pay-TV in one package, to attract consumers.

Thiti claimed that the combined 100 True shops, excluding the shops in Power Buy areas, have recorded customer traffic of about Bt1 million per month.

President Suthisarn Chirathivat said Power Buy had total sales revenue of over Bt10 billion in the last few weeks and it is recording high product sales this month.

Power Buy's vice president for merchandising and new business, Parichart Yamvinic, said that of total sales revenue, 28 per cent was generated by LCD televisions, followed by mobile phones and digital cameras.

Consumer confidence up

The Nation (14 December 2007)

Consumer confidence is showing signs of recovery before the general election, despite rising concern over spiralling oil prices, according to a survey released by the University of the Thai Chamber of Commerce (UTCC) yesterday.

The consumer confidence index turned upward last month for the first time in 13 months, thanks to recovering sentiment before the national election on December 23.

The index rose from 75.5 points in October to 76.2 points in November. All related confidence indexes also followed the upward trend because of the clearer political scene.

However, consumers are still worried about the higher cost of living, driven by rising oil prices.
Thanawat Phonvichai, director of the university's Economic and Business Forecasting Centre, attributed the rising index last month to the upcoming national poll. However, it is too early to say that increasing consumer confidence is here to stay, he said.

"People foresee a clearer political situation. However, the sentiment will be easily hit by any uncertainties. The new government should be carefully aware of any confusion after the election," said Thanawat.

He added that this was the beginning of a recovery. If the political situation shows more stability and oil prices do not surge too much, a normal rate of consumer confidence should be seen in the second quarter next year.

Confidence in the overall economy rose from 68.6 points in October to 69.3 points last month.
Confidence in future income improved from October's 88.1 points to 89.1 last month, while the index on future employment opportunities rose from 69.8 to 70.3 points. Other positive factors contributed to the rising index, including the constant policy interest rate, the Finance Ministry's higher projection of economic growth from 4 to 4.5 per cent this year, and robust export growth of 28 per cent in October.

Despite the upward trend, an index figure below 100 still represents weak consumer confidence. The university's index was based on a survey of 2,253 respondents.

Negative factors last month include an increase in the domestic retail oil price by Bt1.20-Bt1.70 per litre, a SET Index decrease by 60.84 points during the month, the baht's strengthening from 33.99 to 33.85 per US dollar and concerns over the rising cost of living.

Consumers still believe this is not a suitable time to purchase new houses and cars, start new investments or travel.

Thai Chamber of Commerce vice chairman Dusit Nontanakorn said the political situation was still the highest concern of consumers. The new government must urgently set up a stable Cabinet and economic team to increase confidence. When domestic spending recovers, the country's economy should be back on track, he said.

Dusit said domestic spending would be the key driver of the economy next year as exports would show slower growth from the global economic slowdown, particularly in the United States.
"Businessmen are closely monitoring political movements. If the upcoming government can boost investment and domestic spending, the economy should recover in the fourth quarter next year," he said.

To increase economic growth, the government must concentrate on promoting domestic spending and cross-border trading, increasing foreign investors' confidence, and starting public investment to draw private investment.

In addition, the survey found that the gross domestic happiness index had increased from 97.7 points in October to 99.3 last month. However, consumers still expressed concern over the rising cost of living in the future.

Meanwhile, the MasterCard Worldwide Index of Consumer Confidence survey showed that Thai consumers had regained some of the confidence they lost six months ago. However, the current index score of 44.2 is still below the market's historical average of 55.7.

While consumers have regained some confidence with regards to the outlook on employment, the economy, stock market and quality of life, sentiment towards regular income has dropped 17.1 points.

The overall outlook across Asia-Pacific with regards to the economy (68.3), regular income (81), stock market (66.5) and quality of life (66.7) has improved from the previous survey, which was conducted in May. The view on employment (63.8) remains constant.

The volatility in world financial markets, the announcement of heavy sub-prime losses by global financial heavyweights, rising oil prices and inflation costs seem not to have dampened confidence for the first half of next year.