Thai telco AIS' Q3 profit drops to 5-year low

BANGKOK • Advanced Info Service (AIS) , Thailand's largest mobile operator, reported a weaker-than-expected 24 per cent drop in quarterly net profit on huge outlays to expand its network and improve quality amid fierce competition.

AIS, 23 per cent owned by Singtel came in at 6.5 billion baht (S$258 million) for July-September, marking the lowest quarterly profit in five years and well below an average estimate of 7.4 billion baht from 15 analysts polled by Reuters.

Although its service revenue rose 2.2 per cent due to growth in non-voice services and faster 4G speed on offer to customers, profit was also hit by jumps in marketing and financing costs, it said in a statement.

Marketing expenses surged 121 per cent while financing costs jumped 183 per cent as AIS took on more debt to acquire spectrum and expand its network.

The company said it is spending 40 billion baht on network expansion this year.

AIS said it was still giving some discounts and subsidies to customers buying 2G and 3G phones to preserve market share, but it had scaled them back after gaining 900MHz spectrum in an auction in May.

Last month, Total Access Communication, Thailand's second- largest mobile operator, reported a 46 per cent drop in third-quarter net profit.

Before the earnings announcement, AIS shares were up 1.7 per cent at the midday break, outperforming a flat broader market.

REUTERS

A version of this article appeared in the print edition of The Straits Times on November 09, 2016, with the headline 'Thai telco AIS' Q3 profit drops to 5-year low'. Print Edition | Subscribe