Thai firm AIS targets tripling in fibre subscribers

Advanced Info Service (AIS), the top wireless operator in Thailand, intends to triple subscribers for its fibre-based high-speed Internet service as it grapples with intense competition in the mobile sector.

The Bangkok-based business is targeting 2 million fibre subscribers in three years, up from as many as 600,000 currently, chief executive officer Somchai Lertsutiwong said in an interview.

The goal is to become the preferred platform for digital services in homes and offices as well as on the road, he said.

"AIS has to transform itself," he said in his office in Bangkok on Wednesday. "By 2020, we'll be the major player in fixed broadband."

China Mobile-backed True Corp has used aggressive handset subsidies to expand its share of the Thai wireless market, overtaking Telenor ASA's Total Access Communication and hurting industry profitability.

Operators also face a spectrum auction next year with minimum licence prices of more than US$1 billion (S$1.3 billion), in a country at risk of a bandwidth shortage as data demand expands.

While AIS has enough spectrum "for a while", it will definitely bid in the auction and is interested in both the 850 MHz and 1,800 MHz bands, Mr Somchai said.

The firm's other notable targets include boosting sales to companies to as much as 30 per cent of total revenue from the current 9 per cent. 

Service revenue growth next year is likely to be a little above the pace of economic growth, Mr Somchai said. That implies a range of 4 per cent to 6 percent, if gross domestic product increases 3 per cent to 4 per cent.

AIS' revenues would be more diversified if it succeeds in scaling up the number of high-speed subscribers to its fibre network, said Finansia Syrus Securities head of research Jitra Amornthum in Bangkok.

A duel for subscribers and spectrum costs have weighed on the three dominant companies in Thailand's wireless sector.  Operating margin for Advanced Info Service, 23 per cent owned by Singapore Telecommunications, dropped to about 26 per cent last year, the lowest since 2009, according to data compiled by Bloomberg.

Total Access's margin slumped to 4.7 per cent in 2016, less than half the previous year.

True reported an operating loss for 2016, the fourth annual deficit in five years.

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A version of this article appeared in the print edition of The Straits Times on December 02, 2017, with the headline 'Thai firm AIS targets tripling in fibre subscribers'. Print Edition | Subscribe