No one wins in AIS, 7-11 dispute
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No one wins in AIS, 7-11 dispute

A sign at a 7-Eleven convenience store informs customers that AIS's 1-2-Call SIM is out of stock.
A sign at a 7-Eleven convenience store informs customers that AIS's 1-2-Call SIM is out of stock.

While the dispute between Advanced Info Service (AIS) and 7-Eleven over commission for mobile top-up services have left both sides bruised, it appears that the country's largest mobile operator is taking the brunt of the tussle.

CP All Plc, the operator of 7-Eleven convenience stores, has banned AIS's mobile top-up services at its stores and is facing inevitable revenue loss.

More importantly, the disputes have caused consumers significant inconveniences.

The National Broadcasting and Telecommunications Commission (NBTC), meanwhile, says it does not plan to intervene in this case, stating the regulator has no legal authority to interfere in a personal commercial deal.

CP banned the refill of AIS's prepaid mobile service early this month. The company said the ban was because of "normal unsettled commission deal".

As of June 2016, AIS had 33.5 million prepaid customers out of a total 39.4 million subscribers.

Titipong Khiewpaisal, senior vice-president for marketing of AIS, declined to elaborate on how sudden the financial impact will manifest after the ban, but he admitted that the ban was causing inconvenience to its prepaid customers.

"We completely disagree with 7-Eleven asking us to pay it commission at the same rate of DTAC or TrueMove," he said, adding that 7-Eleven and AIS have been in business together for 16 years.

7-Eleven wants to raise the commission for AIS's refill prepaid card value service to 6%, up from the current 4%. If AIS customers top up 100 baht, the convenience store operator earns a commission of four baht.

Second-ranked Total Access Communication (DTAC) pays between 6-7% while third-ranked True Move pays 7-8%.

Mr Titipong argued that AIS generates much more top-up commissions than its smaller rivals because the company has 51% service revenue market share in the overall mobile market.

Without 7-Eleven as the refill channel, Mr Titipong said AIS customers can refill credit on their mobile phones through almost 130,000 of its partners' online top-up machines nationwide.

Of the total, there are 90,000 Boonterm online top-up service machines operated by Forth Smart Service (FSMART); 30,000 through Singer online top-up machines; and 7,300 Feel-top machines owned by Thanatat Solution.

In addition, customers can top up their cards at 350,000 AIS dealer shops nationwide; 40,000 ATMs of 11 commercial banks; and 5,000 service points at modern trade and convenience stores.

It's undeniable that 7-Eleven is the most recognisable convenience retailer in Thailand due to its vast network of franchises.

Potential cause of dispute

Industry veterans identify the potential root cause of the ban as the battle between AIS and TrueMove, the mobile business unit of CP.

Early this year, TrueMove filed a complaint with the Office of the Consumer Protection Board (OCPB), the primary investigative section for consumer complaints, alleging unfair business practices by AIS.

True alleges AIS blocked its 2G customers who wanted to sign up for True's 3G and 4G service from accessing True's call centre. The company said it received complaints from AIS's 2G users who had attempted to contact True's call centre in many provinces.

True believes AIS engaged in unfair business practices, violating the Computer Crime Act and the Telecommunications Business Act. AIS may have also violated consumers' privacy and rights to access telecommunications services.

True said AIS must expedite the migration of its previous 11 million 2G customers on the 900 megahertz network to its 3G system before the network is shut down after True pays for its 900MHz licences.

The OCPB has submitted its findings to the Consumer Protection Police Division for further scrutiny.

The 900MHz spectrum was previously used by AIS under a concession to provide 2G mobile service. That concession expired last September.

FSMART gets windfalls

The ban has given Forth Smart Service (FSMART), an online top-up machines provider, a financial windfall of almost 20 million baht a month.

Pongchai Amatanon, chief executive of FSMART, acknowledged that the company has seen increase of over 30% in mobile top-up value at its Boonterm refill machines nationwide, especially those located in front of 7-Eleven stores.

"Our top-up value reached 80 million baht per day in October, up from 62 million last month," he said.

FSMART now provides a total 90,000 Boonterm online top-up machines to five mobile operators at convenience stores, especially outside 7-Eleven stores and public transportation areas.

FSMART earns a commission of 12% on average per transaction.

Mr Pongchai said his company expects top-up sales to reach 25 billion baht this year. "We expect a net profit of 400 million baht this year, up from 290 million baht in 2015."

However, Mr Pongchai admitted that many people are still not familiar with top-up machines, as they prefer to use prepaid credit through the more convenient counter service channel.

Consumers on social media say that AIS prepaid users upcountry might face difficulties in refilling mobile phones as 7-Eleven has extensive network coverage.

"I'm not familiar with the refilling procedure via electronic channels," one consumer wrote on

Many comments posted that 7-Eleven has the right to stop providing the refill service, and AIS just has to seek other channels to replace if the company could not accept the new higher fees.

Another post noted 7-Eleven does not take advantage of consumers, it simply takes business advantages.

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