Samart Corporation is embarking on a bold business and organisational restructuring to brace for digital disruption this year.
The development is aimed at reducing operating costs, increasing profit margins and creating new recurring revenue, said president Watchai Vilailuck.
"We project consolidated revenue of 20 billion baht in 2017, a strong recovery performance from last year," he said. "Samart is moving to Thailand 4.0 in line with the government's attempt to push the country toward a value-based economy."
Samart reported a net profit of 212 million baht on consolidated revenue of 10.7 billion for the first nine months of 2016.
Of the total revenue, 4.34 billion baht came from Samart Telcoms Plc (Samtels), the group's ICT business arm; 3.05 billion from handset distribution through Samart I-Mobile Plc (SIM); and the rest from call centres and its content business.
Mr Watchai acknowledged that Samart was unable to achieve 2016's revenue target of 24 billion baht.
He cited a big loss in the handset business for the group's poor performance last year. The loss was due mainly to high levels of inventory and intense competition, especially from mobile operators who used a subsidy approach to attract customers.
In contrast, 2017 is set to be a golden year for Samart, Mr Watchai said, pointing to lucrative growth in the ICT business operated by Samtels.
Samtels is reducing its heavy reliance on government projects, which accounts for 90% of the unit's revenue. The company restructured its business operations into three units: telecom networking infrastructure, enhanced technology and business applications.
"We're on the verge of transforming our ICT business unit by transforming ourselves into an ICT solutions service provider instead of simply an ICT product vendor," said Mr Watchai.
Samtels expects revenue of 9 billion baht this year.
Mr Watchai said SIM aims for a strong recovery this year as the company shifts away from selling low-margin mobile phones and embraces higher-margin telecom and digital services. SIM expects to sell just 1 million handsets this year, down from 4 million in 2016.
Under the new structure, SIM has consolidated its business into four areas: mobile and security, mobile operator and infrastructure, digital commerce and sport.
Mr Watchai said SIM expects to make a profit this year after a loss of 293 million baht for the first nine months of 2016.
Samart will seek to further cut operating costs this year. Samtels expects to keep contributing half of total revenue to the group this year, while SIM will likely maintain its 20% share.