Good morning, everyone. Welcome to our first quarter of 2025 result conference call. First, let me introduce our management, our CEO, Khun Somchai, [Foreign language].
[Foreign language] .
CFO, Khun Montri [Foreign language]
[Foreign language] .
Chief Consumer Business, Khun Pratthana
[Foreign language]
We have our CEO, Khun Somchai, Khun P, joining online, [Foreign language] . Next, [Foreign language] Acting Chief Enterprise, Khun Phupha [Foreign language]
[Foreign language]
This time, we also have Chief Retail Business, Khun Prapat, joining us, [Foreign language] .
[Foreign language] .
[Foreign language] we also have Khun Natthiya and, myself, Somrutai, will be briefing this session. The session will begin with a short brief and then going directly into Q&A. Allow me to remind you that the special silent period since the Royal Gazette auction announcement on the 28th of April 2025 and will last until the auction concludes. We will not address any spectrum auction-related matters, [Foreign language] . At this time, you may also reserve to ask the question through the chat box. Please type your name and also your corporate name. Now, let me begin the session. The first quarter of 2025, the Thai economy saw positive momentum supported by government stimulus, a lower BOT interest rate, and rising tourist arrivals, despite global volatility impacting overall sentiment. AIS delivered strong bottom-line growth driven by profitability-focused strategy and efficient spending.
In mobile, the revenue grew 4.3% year-on-year, supported by superior network quality and value-uplifting strategy. The subscriber reflected a prepaid losses due to tighter personal identification controls, while postpaid grew from improved churn management. Broadband's growth of 10% year-on-year was driven by high-quality subscribers and value-added service bundles, which contributed to higher ARPU, where we now reported THB 518. Enterprise services saw double-digit growth year-on-year in EDS and cloud. This is fueled by rising demand for connectivity in Thailand and the CLMV region. The device sales continue growing year-on-year, supported by government stimulus through margin decline due to promotional campaigns under the tax incentive scheme. Next, we exceed the guidance in both call service revenue and EBITDA, driven by strong business performance. Consequently, the net profit reached THB 10. 584 billion , growing 25% year-on-year. Our financial position remains solid, supported by prudent financial management.
The leverage ratio improved to 1.8x from 2.2 x at the end of 2024, while the average cost of borrowing decreased to 3% in this quarter. While our three-month performance exceeded guidance, it was against a low base in Q1 last year. We remain cautious and maintain our full-year guidance. The key risks ahead include the macro factors such as the trade tariffs affecting GDP and FX, and the local challenges like delayed government spending, seasonal slowdown in Q2 and Q3, and pressure on low-end segments from high household debt. My last slide, AIS remains committed to sustainability, as reflected in the three sustainability awards received in March this year for our recent sustainability bond issuance and green loan in November 2024. This is the end of the short brief, and we'll start the Q&A session now.
Please be reminded to reserve your to ask the question through the chat box with your name and the corporate name, [Foreign language]. Please also limit your question to three questions at a time to allow others to ask the questions as well, [Foreign language] . First, we have Khun Pisut from KSEC, [Foreign language] .
Hello Can you hear me?
[Foreign language]
First of all, thanks for the opportunity and congrats on your strong result. This is Pisut from Kasikorn Securities. May I have three questions? My first question is regarding your revenue and EBITDA guidance. What are your underlying economic assumptions for the guidance? For example, GDP growth, domestic consumption, etc. Considering a stronger economic headwinds waiting for us in the second half, have you, you know, considered that in this guidance, or are you waiting for to get the clear pictures before revising your guidance? My second question is about the revenue mix between the prepaid and postpaid services. Just notice that prepaid revenue proportions climbed up from 43% last year to 45% this year.
It would be helpful if you could share with us about the market dynamic, your strategy behind this, and the financial implications, i.e., the profit margin, and what should we expect in the future on this one. My last question is on your revenue momentum in April. What is the movement in the mobile and fixed broadband market so far? Has the revenue growth momentum carried over from the first quarter? Lastly, what's about your plan on the EPL content? What would be the accounting impact on it? That's it for me, [Foreign language] . Thank you, [Foreign language] .
May I take the first question on the economy? I think since the revise of the GDP down to 1.8%, we also, you know, take a cautious view on the, you know, second and third quarter, which are the low season as well. That's why we still keep the guidance, remain, Khun Pisut.
On the second question regarding the mix of prepaid and postpaid, as you have seen for the last few quarters, things went on according to the whole intention and plan to repair the price in the markets, canceling the lower one, which is not profitable, not sustainable, into a more healthier one. The first segment we got impact on positively is prepaid. That's why prepaid revenue are climbing back to the right level. Postpaid are now starting to see the positive trend as well on the coming back. With those, I think this is the right level of it, around 55, 45, or 50/50, whatever they are going to be. Right now in the markets, prepaid and postpaid in the middle segment look very similar. Customer can be prepaid and paying monthly as well, or could be postpaid, slightly different in packages.
I think it's a choice of payment that customer may perceive or may like to. That's the two questions you have. The third one, when we talk about momentum of revenue, let me address the first piece, which is mobile. We are very cautious about the overall economical environment, meaning that whether customer have money and do they need to save money. So far in April, things still go on, as in Q1. Somehow, the rest of the year is, remain, cautious for us. That's revenue momentum. I, for the rest of revenue, maybe Khun Tee and the rest can also address.
Maybe just to, maybe just to chip in on broadband. I think normally April is a soft month for new subscribers anyway. It's a long holiday. We do see some softening on the broadband side, but overall revenues do still grow as we used to have a positive net add every month. Thank you.
For the last question regarding English Premier League, we will later on, in June, review the information about the offering and the plan. At this point, we are not able to address officially in terms of detail yet. Based on the structure that we partner with Jasmine International, so it should be part and parcel of the whole plan in AIS. It shall not be a disruption in the balance sheet or P&L.
Thank you very much, Khun. Thank you very much, Khun.
Next we have Khun Wasu from Maybank, [Foreign language] .
Good morning and congratulations on the impressive earnings growth. I have three questions. The first one is about the EPL spending. I think it has been mentioned that AIS is planning to spend around THB 1 billion on marketing activities and subsidies related to the English Premier League, campaigns and packages. Will the THB 1 billion be booked as OpEx or CapEx? That is my first question. The second question is regarding the postpaid churn management. I think Pisut mentioned earlier in the presentation that the postpaid subscribers grew strongly this quarter due to improved churn management. What have you done differently in terms of the churn management for the postpaid customers? That is the second question. My final question is on the handset sales margin target.
I think earlier this year, the management has mentioned that AIS aims to generate handset margin of above 5% this year. Is this target still achievable, especially when we consider that the handset margin was only 4.3% in the first quarter? In April, I looked around AIS shops and I see that there's a quite aggressive price discount, especially for Android smartphones. Like for example, AIS customers can redeem 10 points to receive THB 1,000-THB 4,000 price discount, depending on the smartphone models. Given the low margin in the first quarter and ongoing, significant discounts in April and May, is the 5% handset margin target still achievable? That's my third question.
Okay. The first one regarding English Premier League spending of THB 1 billion that you heard from the news is a mixture of revenue sharing and some other things. It will not reflect in either OpEx or CapE directly. It is not to do with revenue sharing. That is number one. Number two, the postpaid churn management as well as prepaid, we are very much focused on acquired quality customer. As a result, the churn rate has been continued on reduced down. In postpaid in particular, regarding the device subsidies and aggressive plan has been continued on optimized to really focus on the target segment. That is why, you start to see, as we actually addressed it earlier, the past few quarters, you start to see the improvement in churn management.
Just in my answers on the handset margin, I still, as, ensure that the 5.2% as our target is achievable in the whole year of this year. The second question that you're talking about, amazing 10 points, I think this is one of very good programs that we have been launched during this time. It's drawing a lot of customers come to the store, come to the shop. The deduction and the price deduction actually is divided by two companies. It's actually absorbed, half of them is by AIS absorbed, and the other half is on the mobile brand. They're going to absorb that one. I think 5% is very achievable in this year. Yeah.
That's very clear. Thank you.
Thank you, [Foreign language] Next we have Khun [audio distortion from KKPF, [Foreign language]
Hi, can you hear me?
[Foreign language]
Okay. I have four questions to my. The first one, you did say in the MD&A that the negative net add in this quarter was due to the call center suppression activity by the government. Would the impact continue in the second quarter of the year? Second question, if you look at the number of tourist arrival in Thailand, it's declined by 7% year on year in ARPU. How would that affect your revenue and overall how much the inbound tourists contribute to your total revenue? The third one, I have noticed that, you have adopted more, AI at your call center recently. How would that affect your OpEx going forward? Is it going to be a material?
I read from Bank of Korea the other day that the cabinet is considering removing Telecom from list three of the foreign ownership limit, meaning my understanding is that, now, if they do remove it, then the foreign, foreign firm can come into Thailand without the local partner. What would be the implication for the sector in your view? Thank you.
For the first one regarding the negative net add, we have continued on, looking at prepaid on the personal identifications, which one is correct, which one is not, they need to redo, and many of them, which is inactive, then we cut it down, inclusive of the validities of tourism. That contributes into the negative net add in prepaid in Q4 and a little bit in Q1. Whether it continues on, I don't think so. I think it's going to come to the very much balance. We start to see a positive add as well in April. That's the first one. The second one regarding tourist inbound, yes, it's kind of structural issues that Thailand will face on the less tourists, especially from China. Right now, the tourist segment probably contributes less than 1% when it comes to the overall revenue.
We kind of mindful about that. But anything can change. I don't know. I think it's up to the whole situation and the whole world as well.
On the AI question, we implement AI not only for the cost reduction, it also increased our efficiency in our job also. If you see on the call center, we implement the AI to not increase our operation cost. In fact, we have a lot of new activity for the call center, but we still can maintain the cost of operation of the call center. That means we indirectly do our cost. This is all the things that we try to implement, the AI, not only on the call center side, but on the every process in AIS, we will try to do this kind of thing, Khan.
The question on the foreign ownership limit, please.
On that one, we don't have detail yet. We will try to find out what will impact us. I think in total industry, right now it has remained the same. I think we will find out more on the details of that news later on.
Okay. Thank you very much. Thank you.
Hi. [Foreign language] , Khun. Hi. Next we have Piyush from HSBC, please.
Yeah. Hi. Good morning. Thanks for this and, congrats on a good set of numbers. Three questions. Firstly, on mobile, any changes kind of which you're seeing on the consumer behavior because your data usage, per month has started to inch up this quarter? In the MD&A, you mentioned that, lower mobile revenue is also due to lower inter-roaming revenue. If you can elaborate what has happened. Secondly, in D&A, is there a, depreciation amortization? Is there any one-off or this is the new baseline after 3G assets have fully depreciated? Thirdly, on cost of services, you said, there is some change in content cost structure which has led to decline year on year. Can you elaborate, on, on, on that? Thank you.
For the first one, regarding the behavior, the value segment continue on, consume a bit more along the way as the market developed to 5G. The big change is from the unlimited plan segment whereby we continue to taper down, segment by segment, customer by customer. As a result, the average VOU, as you see, be able to maintain. We are entering into more sustainable zone of network investment as well as the monetization of it. That is the general behavior. Of course, when the economy, turmoil, about to hit Thailand or already hit, maybe some segments start to think about or start to shift a bit of behavior in terms of top-ups. They may top up in smaller amount, spend a bit, multiple time per month of top-up rather than top-up one time. We start to see a little bit of that as well.
Second one on roaming revenue, Q4 is a higher season. First quarter is a lower season. Lower international roaming revenue coming in first quarter. [Foreign language] Your last question on D&A, there's no one-off. It's a general, fully amortized asset.
Anything on content? Yeah. Sorry. Am I getting you correctly? You asked about the content cost or what is the big difference between Q1 last year and Q1 this year. I think the one item that is different is on Disney, whether it is web chair or it is the buy and sell. That is booking slightly different. Late last year we entered into a peer web chair, so the recognition of revenue becomes a net rather than a gross and cost. Okay. Thank you. Thank you.
Next we have Arthur from Citi, please.
Hi. Thanks for the opportunity. Two questions, please. Firstly, with regard to mobile, I'm just wondering if you're seeing any pressure related to the macro side or tourism traffic impacting into May, or are you seeing continued benefits of customer upgrading to the new plans into the second quarter? I'm just wondering where ARPU will be trending, basically. Second question I had is with regard to enterprise. I do know that your enterprise momentum has been very strong, north of 20%. Is there a bit of contract lumpiness where I think it booked upfront, or do you see this momentum as actually sustaining? I'm just wondering why it's so strong considering normally enterprise pretty much tracks macro growth, which has actually been downgraded for Thailand. Thank you.
For the first one regarding tourists, what we worry about is not number of tourists, but the whole economy rather than tourists. Tourism contributes, if not mistaken, almost up to 20% of GDP. That would, as a result, if there's less of tourists, then this economy will be a bit weaker. Whether or not it would impact the revenue on tourists, it will be a bit, once tourists have left, but as mentioned, in overall economy is our concern. In Q2, it's remained to be seen toward Q3 and Q4 as well as addressed earlier. I think we continue on monitoring even though right now it has not been any much of the impact.
For enterprise, there are two things that drive the growth. This is, first one is come from the connectivity, which, this is a customer from the CLMV and also the backlog from the last year as well. Also on the cloud, there are two things in the cloud as well. The first one is about the, also the backlog and the customer seasonality of that spending from the last year and the beginning of the year. Another one is also include on the one-time licensing and the cloud usage. Yeah. That, that is a key reason that drive the growth.
Given this, we should expect a bit of moderation. Is that how we should see this going forward, or?
I think that we will be able to maintain the balance on the expectations on the growth on the Q2 as well. We don't see the, I mean, the earlier or any jaw stopper, even though we have the very strong competition in the market.
Understood. Thank you. Thank you very much.
Thank you. We have Ranjan from JP Morgan, please.
Hi. Good morning. Management, thank you so much for the opportunity and congratulations on the results. Two questions for me. Firstly, on your CapEx guidance, does that include any additional CapEx that you might need to incur post the new spectrum allocation that you might get? I'm not asking specifically what spectrum that you're looking to acquire, but whether you need to incur there could be upside to that CapEx number to operationalize the additional spectrum that you will acquire. The second question is, there's been a change in spectrum payment term. Does that impact your dividend policy in any way because now you'll have a 50% upfront payment for spectrum cost? Thank you.
I think the CapEx guidance, we still keep it the same, you know, as we guided before. You know, that's in, exclude all those, you know, spectrum factors. I think the second question also, you know, we are in a special silence period, so we cannot comment on the, you know, the CapEx needed or, you know, what is whatever spectrum we needed.
Okay. Thank you. Okay. Thank you.
Next we have, Supachai from Yuanta.
Hi. Can you hear me? Hi. Can you hear me?
Yes.
Okay. I got specific, specific question for the enterprise business, Khun. Can you update us more about your recent data center expansion and, because the e-economic this year may be worse in the second half, do you need, plan to add space this for maintain the enterprise business growth for the second half of this year, Khun? That's, that's all, Khun. Thank you, Khun.
Thank you. Thank you for your question, Khun. For the data center capacity and supporting the customer demand, I can share to you that we have enough capacity to respond to the customer demand with alignment with the expectation on the revenue and income for the two hour of the year, Khun.
Can I have a follow-up question?
If the project, if the bidding project does not come up a lot in the second half, do you have plan to update for the growth for enterprise business, Khun?
Based on the pipeline that we have, I think we can manage on the revenue and expectations on the growth and revenue, Khun.
Okay, Khun. Thank you, Khun.
Okay, Khun. Thank you, Khun.
We have finished the list of the slots. Is there any further questions from the participants?
Khun Supachai, Khun, sorry. Khun Supachai from Yuanta, my Khun. Can I have one more, please? About the virtual bank, Khun. Can you update us more about the recent development and if Khun continue to have more stake on KBank, would it impact your business plan, Khun?
I don't think so if we relate together because KBank also don't enter into a virtual bank this time, my Khun. I think the virtual bank and a normal traditional bank, they measure with it very different, very different, my Khun. Khun also mentioned that they invest in the KBank for dividend and not involved in their own business, Khun.
[Foreign language]
[Foreign language]
Hi, I have two. Hi, I have two questions. The first one is quite basic. Does the migration to 5G packages still lead to 10%-15% boost uplift? That is the first question. The second question is about the CEO succession plan. I'm not sure if you have any update on the succession plan. Thank you.
For the first one regarding the upgrades, I wouldn't call it migration. It's more upgrade when customer upgrade from a 4G plan to 5G plan is still around 15%+, upward.
Don't worry. Our board outside the NCC, Nomination, and Compensation Committee, we are very clear on our succession plan. Now we have at least three persons to succession me. However, it depends on the NCC and board. We will consider when, should be in the right time, Khun. Don't worry, Khun, because this second plan is very important for our board direction.
Thank you, Khun. Thank you, Khun.