AIS says strategy will change

Business News - Friday December 14, 2007

AIS says strategy will change

Company prepares for market saturation

SRISAMORN PHOOSUPHANUSORN

Advanced Info Service, the country's largest mobile operator, plans to shift its focus in 2008 to maintaining its revenue share rather than increasing subscribers.

The company aims to capture at least half of the 159 billion baht spent on telecom services per year.

AIS plans to expand aggressively into fixed-base wireless broadband services (WiMax) and third-generation mobile services as part of its strategy to become an integrated fixed-mobile provider.

The company would spend at least 10.5 billion baht building an additional 2,000 base stations, plus three billion baht on marketing budget next year.

In addition, AIS has allocated funds to develop third-generation (3G) and wireless broadband WiMax networks once the National Telecommunications Commission starts granting 3G licences.

As part of its plan to reposition itself from a premium brand to a mass product, AIS announced a ''price subsidy'' approach to attract the emerging pre-teen segment and increasing its share from 30% to 40% of the market next year.

Chief executive Vikrom Sriprataks said Thailand's mobile-phone penetration was expected to reach 100% in 2008 with 64 million subscribers, up from 52.3 million by year-end.

Total spending by customers of all mobile operators is projected to grow by 5% to 159 billion baht next year, up from 151 billion baht this year.

''We expect to maintain our share at 50% of the overall spending market next year, after achieving the target this year,'' Mr Vikrom said without elaborating on figures.

AIS expects to have 24 million subscribers in a total market of 52.3 million this year.

The company had 19.5 million customers in a market of 40 million in 2006.

Mr Vikrom said AIS planned to start providing voice over Internet protocol (VoIP) services next year on both mobile and fixed-lines.

Mobile services on 3G, WiMax and high-speed downlink packet access (HSDPA) would also be seen next year.

President Wichian Mektrakarn said AIS planned to spend at least 10.5 billion baht to build an additional 2,000 base stations at skytrain stations and in untapped tourist destinations, bringing its total to 14,500 bases next year.

He also said that AIS would focus on five key areas in 2008: network quality, service excellence, variety of products and services, privileges and corporate social responsibility.

Somchai Lertsutiwong, executive vice-president for marketing, said AIS was moving toward a third-generation ''integration marketing'' strategy next year, a combination of functional and emotional marketing approaches.

''We aim to become a 'best offer' brand next year with segmentation pricing plan approach and free trial services, targeting pre-teen and SMEs segments,'' he said, adding that AIS would opt to subsidise some tariff plans in the pre-teen market.

Mr Somchai said AIS projects revenue from GPRS and Edge networks to grow by 40% next year, driven mainly by surging mobile internet demand.

In contrast, he said, the voice-based market would grow only 1% while data communication services would increase by 20% next year.

AIS has restructured its business functions by separating into three divisions: fixed-line under Advanced Datanetwork Communication and Super Broadband Network; mobile phone and 3G services under AIS and Advanced Wireless Network; and solutions under Wireless Distribution Service, Advanced International Network and M-Pay Co.

Shares of AIS (ADVANC) closed yesterday on the Stock Exchange of Thailand at 96 baht, unchanged, in trade worth 394.39 million baht.

Bangkok Post