Thailand's Dtac Q1 Net Subscriber Additions Down 70%

[Boater]

Net additions at Thailand's second largest mobile network operator, DTAC, fell to the lowest level seen in three and a half years in 2009, weighing in at just 0.29m. A clue as to the down-turn was seen at the end of 2008, as the number fell to 0.68m in the fourth quarter (having been consistently in excess of 1m for the preceding four periods) and the economic situation in the world in general, and the Thai market in particular, has hardly improved since. Even then, though, the seriousness of the decline in the first three months of this year was much greater than expected, leaving, as it did, new connection numbers for the period at just 30% of the 2008 quarterly average.

Click to enlarge

DTAC: Connection Activity Rate, Q3 06 – Q1 09

To add to the bad news, postpaid customer numbers fell for the first time ever in the quarter, as “inactive” (for which read “uncreditworthy”) accounts were disconnected. This had the positive effect of boosting postpaid ARPU by around 5% – against the trend seen throughout 2008 – but weakened the mix from 11.8% to 11.1% contract.

The redeeming feature of DTAC's performance, with respect to connection numbers at least, was that the vast majority of the new additions to the registered base also carried through to the active base. A total of 91.9% of the new connections registered to the DTAC network showed up as new active connections, which essentially implies that just 23k customers on a net basis became inactive between 31st December 2008 and 31st March 2009 – little more than 10% of the average in 2008. The result is to be welcomed, but in fact all it served to achieve was a stablisation in the activity rate at an all-time low of 89.6%, after nine successive quarters of decline since the metric was first disclosed in Q3 2006.

The improvement in postpaid ARPU to Bht543 per month on a net basis helped cause a fractional increase in the blended average to Bht220 per month – bucking the decline seen in each of the 12 previous quarters. This is explained by the fact that the economic crisis has caused customers to prefer cheaper on-net calls, spurred on by some attractive promotions. Including interconnect, however, the decline in ARPU continued, to Bht279 per month, although the difference with the Bht281 seen three months earlier was fractional.

http://www.cellular-news.com/story/37385.php

[webfact]

Some additional info from Goggle Finance: http://www.google.com/finance?q=BAK:DTAC

[MJo]

Saturation comes to mind.

I only have data from Q3 2008 and it shows Thailand had then 60M+ subscribers or 92% penetration. More mature markets in europe have gone as far as 130% penetration due people having two or more sim cards (business, personal etc).

Thai operators subscriber growth will hit the roof shortly as there is only so many sim cards one person will have. What counts now is how much revenue they are able to squeeze out from those subscribers. Winners will be those who can get most of the post paid market with one or two year contracts signed for fixed minimum monthly fee.