Mobile Phone Sales Surge Despite Political Strife

[george]

Handset sales surge despite political strife

BANGKOK: -- Thailand's mobile-phone sales growth was spectacular in the first quarter of this year given political uncertainties that had depressed marketing activities.

The big three mobile operators _ Advanced Info Service (AIS), DTAC and True Move _ are expected to report combined new subscribers of more than 1.4 million in the first three months of this year, compared with two million for all of 2005.

Market leader AIS, the only operator that posted a sharp drop in quarterly sales growth from a year earlier, was still estimated to have gained 230,000 new subscribers in the quarter.

Second-ranked DTAC enjoyed a windfall from a threatened boycott of products and services linked with Shin Corp, AIS's parent, by reporting 700,000 new subscribers, and True Move had about 500,000.

AIS earlier said that it expected to attract an additional 1.3 million subscribers this year, out of an expected two million for the whole industry, which would bring its total to 17.3 million by year-end.

DTAC, meanwhile, aims for between 1.2 million and 1.7 million new users in 2006, while forecasting between 4.5 million and five million new customers overall.

True Move hopes to win 1.2 million new subscribers to bring its customer base to 5.7 million by year-end.

All three operators agreed that lower-income customers in the provinces were expected to be the key drivers of new sales in the prepaid segment this year.

Operators anticipate consistent growth for the rest of the year, and are maintaining their current sales forecasts.

Sigve Brekke, the chief executive of DTAC, said the mobile-phone industry had nothing to do with political conditions as people still needed communications, as proven by the sales figures for all three operators in the first quarter.

True chief executive Supachai Chearavanont agreed, saying that communication is a flagship service business.

However, major operators acknowledged that competition would deepen through the rest of the year, as operators are fighting to keep their market shares.

Also, churn rates are expected to rise since as many as 80% to 90% of new subscribers of each operator were obtained through defections from competitors in the first quarter.

According to DTAC, between 800,000 and 900,000 new mobile customers register with all operators every month, for which the churn rate accounts for 500,000.

An analyst said intense price competition would have a major impact on operators' revenue performance this year.

--Bangkok Post 2006-04-15