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Dtac reconsiders 900MHz auction amid falling profits

Dtac reconsiders 900MHz auction amid falling profits

Thailand’s third largest operator dtac has seen its Q2 profits plummet, with service revenue down and prepaid subscribers churning.

Dtac’s year-on-year net profit fell by 76% to THB179 million ($5.37 million), with the drop largely ascribed to increased depreciation and amortisation of previous investment in its network. Dtac’s service revenue dropped by 3.8% and its handset revenue fell by 4%, pushing its overall revenue down 3.5% to THB18.8 billion.

The operator has seen its post paid subscriber numbers increase by 500,000 compared to the same period last year, although of these 154,000 of these are migrated prepaid subscribers. Coupled with fierce competition in the market, this has resulted in dtac’s prepaid base declining by almost 14% to 15.7 million. ARPU from its prepaid subscribers dropped slightly to THB588 per month, while post paid ARPU was down 3.3% to THB152.

Dtac’s total subscribers dropped by 200,000 during Q2 to 21.6 million, representing a decline of 8.4% year-on-year. According to GSMA Intelligence, the operator’s market share is now less than 24%, having fallen by 2%. Of its total subscribers, 41% are 4G users.

However despite the setbacks, dtac’s annual forecast has not been revised, with service revenue expected to be roughly the same as last year. The operator’s capex is likely to be between THB15 billion and THB18 billion as it lines up more base station deployments. Dtac currently has 42,700 3G/4G base stations on the 2.1GHz band – a year-on-year increase of 19% - while in the 2.3GHz band it added 608, with plans to install a further 7000 over the next year.

While dtac has registered its interest in the upcoming 900MHz and 1800MHz spectrum auctions, it has expressed concerns about both the high reserve prices and the new entry criteria, which would see the winner of the 900MHz spectrum assume all responsibility for any interference to Thailand’s forthcoming railway projects, which will use both the 850MHz and 900MHz bands.

Dtac has stated that it intends “to make a thorough assessment of the final auction guidelines before concluding on auction participation”.

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