Mobile big three enjoy service revenue growth
True Move manages to slide into No.2 spot
Growth of 8% in service revenue for the three major mobile operators in the first half of the year reflects the sector's health, as data usage is up and fierce competition is waning.
An analyst at CIMB Thai said a major factor driving service revenue for mobile operators this year is increasing usage of mobile data service, especially over-the-top (OTT) services via telecom networks, including live streaming and video-on-demand.
The three operators' second-quarter financial reports to the Stock Exchange of Thailand showed that 68% of service revenue was generated by non-voice or data service, with the remainder coming from voice service.
Data revenue for the largest mobile operator, Advanced Info Service (AIS), was 18.7 billion baht, or 63% of total revenue, with 11 billion coming from voice service.
Total Access Communication (DTAC) said data revenue was 11 billion baht, accounting for 74.4% of its mobile revenue, while 3.8 billion baht or 25.6% stemmed from voice service.
True Move's data revenue in the second quarter was 10.4 billion baht, accounting for 66.3% of the total, while the rest, 5.3 billion, was from voice.
Revenue from data service for the three operators in the second quarter soared year-on-year. AIS's data revenue increased 21%, DTAC's was up 27% and True Move's grew 25%.
Both AIS's and DTAC's voice service revenue continued to decline in the second quarter, with AIS's and DTAC's voice revenue dropping 14% and 35%, respectively. Only True Move saw revenue from voice service inch up 2.6% year-on-year.
AIS reported that total revenue in the second quarter was 39 billion baht, up 7.1% year-on-year, while True Move reached 27.5 billion baht, surging 19.6%.
But DTAC's total revenue was 19.4 billion baht, contracting 1.8%.
In terms of service revenue for the quarter, AIS earned 32.1 billion baht, growing 6.6% year-on-year, while DTAC and True Move generated 16.4 billion and 16.7 billion baht, increasing 2.3% and 17.3%, respectively.
The CIMB Thai analyst said the use of mobile data service would continue to grow in line with changing consumer behaviour, driving up revenue for mobile operators.
Meanwhile, the price-war marketing promotions, particularly those including free handsets, have significantly declined, further encouraging profitability.
"It seems that the telecom business is on the up-and-up after reaching bottom last year," the analyst said.
Meanwhile, a significant change in the second quarter was True Move's ascendancy to the No.2 spot among mobile operators. True Move overtook DTAC in terms of both subscribers and revenue.
As of June, there were 90.2 million mobile subscribers in the market, 40.4 million of whom were AIS subscribers, followed by True Move and DTAC at 26.2 million and 23.6 million, respectively. Breaking down market share based on subscriber numbers, AIS, True Move and DTAC control 44.8%, 29% and 26.2%, respectively.
True Move boasted the highest net subscriber gain in the second quarter, bringing on 400,000 new subscribers, while the number of AIS and DTAC subscribers declined by 200,000 and 705,000, respectively.
Market share for True Move in terms of revenue also increased, bringing it to second place with 26%. AIS controls 48.6% of the market, while DTAC has 25.4%.
"True Move's heavy investment in its network and marketing campaigns paid off," the analyst said.
The analyst pointed out that even though DTAC lost 5.4% of its subscribers year-on-year, becoming the third-largest operator, its average revenue per user increased by 8.8%, resulting in 2.3% year-on-year service revenue growth.
Lars Norling, DTAC's chief executive, said the company's service revenue growth was attributable to the company's successful marketing campaigns, including Smoothest Network, Flip It, Go No Limit and the DTAC reward loyalty programme.
"We'll continue to fight and maintain our competitiveness in the market, supported by ongoing densification of our network to enhance the mobile internet experience and effective marketing activities," Mr Norling said.