Singtel-backed Thai firm AIS targets tripling in fiber customers

[BANGKOK] Advanced Info Service, the top wireless operator in Thailand, intends to triple subscribers for its fiber-based high-speed Internet service as it grapples with intense competition in the mobile sector.

The Bangkok-based business is targeting 2 million fiber 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 Pcl and hurting industry profitability.

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

While Advanced Info Service 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, 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 in 2018 is likely to be a little above the pace of economic growth, Somchai said. That implies a range of 4 per cent to 6 per cent, if gross domestic product increases 3 percent to 4 per cent, he added.

Advanced Info Service's revenues would be more diversified if it succeeds in scaling up the number of high-speed subscribers to its fiber network, said Jitra Amornthum, the head of research at Finansia Syrus Securities Pcl 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.

BLOOMBERG