DTAC sees profit boost despite subscription drop

DTAC sees profit boost despite subscription drop

Total Access Communications (DTAC) saw a large profit boost but subscriber losses as the third-largest mobile operator began to turn around its waning fortunes in the second quarter of 2019 after years of decline and stagnation.

Net profit for the second quarter was 1.695 billion baht, an increase of 20.3% from the first quarter and 845.2% year-on-year.

Revenue for the quarter totalled 20.3 billion baht, up 3% from the first quarter and 8% year-on-year.

Total subscribers, however, fell by 94,000 to 20.6 million.

Earnings before interest, tax, depreciation and amortisation (ebitda) was 6.57 billion baht, up 7.2% quarterly but down 13.3% year-on-year on higher service revenue, slightly lower regulatory costs and well-controlled selling, general and administrative (SG&A) expenses.

Ebitda margin excluding revenue from CAT Telecom's lease agreements and TOT Plc's network rental for the quarter was 36.9%, an improvement of 2.2 percentage points from the previous quarter.

Service revenue excluding interconnection charge (IC) for the second quarter increased 1.6% from the first, mainly driven by the removal of unlimited prepaid acquisition packages with the introduction of aggressive fixed-data volume packages at a slightly higher price point and continuous growth in postpaid.

The number of DTAC's 2300MHz base stations reached 16,000, an addition of 6,000 during the quarter. Some 348 2100MHz base stations were also added in the quarter to improve coverage.

DTAC plans to spend between 13 billion and 15 billion baht on capital expenditure in 2019.

"Our development in the second quarter of 2019 was in line with our turnaround pillars," said DTAC chief executive Alexandra Reich. "DTAC has been rebuilding trust and confidence in the DTAC network and started to see positive results in both network perception and network complaints in the second quarter of this year."

While the postpaid segment continued to grow with good momentum, the prepaid segment also started to show a better trend.

"We will continue our focus on building a customer-centric network," Mrs Reich said.

Chief financial officer Dilip Pal said: "We had strong financials with quarter-on-quarter growth in service revenue excluding IC. Cost of services and SG&A expenses were also well under control, resulted in sequential ebitda and net profit improvement."


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