AIS plans Bt5-billion 3G marketing splash before concession expires

Advanced Info Service (AIS) is expected to spend Bt5 billion on its marketing campaign this year to migrate a great number of its existing subscribers to the 2.1-gigahertz third-generation network of its subsidiary Advanced Wireless Network (AWN) before its concession ends in 2015, a telecom analyst said.

The analyst added that last year AIS’s marketing budget was around 2.2 per cent of total revenue or about Bt2.8 billion, but this year it was expected to rise to 3.5 per cent of revenue or around Bt5 billion.

With about 37 million subscribers, it will take time for AIS to migrate all subscribers under its TOT concession to the 3G-2.1GHz network.

AIS marketing expenses were Bt917 million in the second quarter, an increase of 22 per cent year on year, because of activities to create awareness of the new 3G-2.1GHz service, according to its filing of the second-quarter financial results to the Stock Exchange of Thailand on Wednesday. 

In the first half, marketing expenses were 2.2 per cent of total revenue and are expected to rise in the second half to 3-3.5 per cent of revenue for the full year.

AIS has raised its 3G-2.1GHz subscriber target to between 10 million and 12 million this year from the previous 8 million to 10 million. 

“Since the service launch in early April, we have registered 3.9 million subscribers on 3G-2.1GHz. This figure is supported by our fast network coverage roll-out, which is better than originally planned,” AIS said in the filing. 

The National Broadcasting and Telecommunications Commission (NBTC) awarded last December licences to operate the 2.1GHz spectrum to AWN, Total Access Communication’s subsidiary DTAC TriNet, and True’s subsidiary Real Future.

However, AIS will maintain the guidance of expected service revenue growth of 6-8 per cent year on year in 2013. This is because of the strong 3G subscriber uptake and wider network coverage in the second half. It expected a better outlook on mobile data growth, but softer voice growth as the first half slightly contracted in keeping with the industry trend. 

AIS also maintained its investment plan of Bt70 billion for 2013-15. It has established 3G-2.1GHz coverage in urban areas in more than 60 provinces and is ahead of its target to achieve urban coverage in all 77 provinces this year, and provide 3G coverage of 97 per cent of the total population by 2015. Of the total budget, about Bt12 billion was already spent in the first half of this year. 

In the second quarter, AIS reported revenue of more than Bt36 billion, an increase of 4.5 per cent year on year. In the first half, revenue was Bt73.484 billion, an increase of 5.5 per cent year on year. 

Net profit in the second quarter was Bt9.195 billion, a 5.5-per-cent increase year on year, while net profit in the first half was Bt19.117 billion, an 8.4-per-cent increase.