The mobile service market is projected to post 3-5% annual growth in total revenue this year as operators focus on cost reduction and foreign tourists increase mobile traffic and international roaming calls.
According to Pisut Ngamvijitvong, senior equity research analyst of Kasikorn Securities, the major growth factors are continued cost management and increased mobile usage by foreigners compared with the pandemic period.
Competition declined following the merger between True Corporation and Total Access Communication, while 5G network expansion has slowed in recent years, he said.
However, the market will be uncertain next year as three spectrum ranges being used by the two major operators under partnership agreements with state enterprise National Telecom expire in September 2025.
The three spectrum ranges comprise 850 megahertz, 2100MHz and 2300MHz.
The National Broadcasting and Telecommunication Commission plans to auction off those ranges by the third quarter before the expiry date, but has yet to announce official details of the auction timeline.
Mr Pisut said following the merger, competition decreased, improving the performance of large operators.
For the first quarter this year, both Advanced Info Service (AIS) and True have benefited from their continued cost reduction.
In addition, the number of inbound tourists has soared this year, boosting mobile phone service revenue stream from visitors via mobile traffic usage and SIM card sales.
Generally, international services including network roaming generates 4-6% of total revenue for telecom operators.
Mr Pisut said the main telecom firms heavily invested in their 5G network installation and coverage over the past few years, however, the investment for 5G capacity at present is seeing significantly less than before, in line with the saturation of new 5G individual users in the mass market.
"Several factors have generated positive performance by the major mobile operators in the first quarter," he said.
Mr Pisut said the major operators expect to see revenue growth of 3-5% in 2024 or slightly higher growth than the previous year.
AIS has benefited from acquiring Triple T Broadband (3BB) that made its consolidated performance in the first quarter grow 10%, up from normal organic growth.
Mr Pisut said the planned auction of the three spectrum ranges by the telecom regulator may create ambiguity for the major operators. If the licence auction ends up with bid winners paying hefty prices, it would lead to a downturn in performance.
However, if the auctions end with cheaper winning prices than in the past, it would be a good sign for their performance in the future.
True reported 800 million baht in normalised profit in the first quarter this year.
Nakul Sehgal, chief financial officer of True, said the company's turnaround with 802 million baht normalised profit along with a fifth consecutive quarter of earnings before interest, taxes, depreciation and amortisation growth in the first quarter of 2024.
AIS disclosed its operating performance for the first quarter this year with total revenue of 53.3 billion baht and a net profit of 8.45 billion baht. This growth was fuelled by the continuous expansion of the tourism sector, along with a dedicated focus on delivering quality services across its 5G network and the 3BB FIBRE3 broadband network, supported by the efficient cost management.
AIS set capital expenditure for the year at 25-26 billion baht to strengthen digital infrastructure, particularly for the 5G and broadband network, to support both consumer and industrial growth.