Good morning, everyone. Welcome to our Third Quarter of 2023 Results Conference Call. So first, let me introduce our management. Our CEO, Khun Somchai.
Good morning.
Next, we have our Deputy CEO, Khun Mark Chong.
Good morning, everybody.
Our Chief Consumer Business, Khun Pratthana.
Sawasdee ka.
Also with us today online, our Chief Enterprise Business, Khun Thanapong. He's also here with us, ka. Ka, our CEO Broadband, Khun Nattiya, which recently takes up the role on the 5th October 2023, ka.
Sawasdee ka.
Ka. For his successor as our new CFO, we have Khun Montri Khongkruephan. Let me briefly introduce you. Khun Montri joined AIS in 2021 as Head of Internal Audit, and recently took the CFO role also on the 5th of October. Before joining AIS, Khun Montri has extensive experiences as Advisory Leader and an Audit Partner at Deloitte, and also experience in retail sector, Ka.
Sawasdee ka.
Ka. Also with us today on, Khun, we have Head of Investor Relations and Compliance, Khun Nattiya. Ka.
Sawasdee ka.
Myself, Somruetai, will be briefing you the results and run this session. The session will begin with a short brief and going directly into Q&A. At this time, you may also reserve to ask the question through the chat box. Please type your name and your corporate name, Ka. So first, let me start with a presentation. Despite several economic headwinds, Thai economy gradually recover, benefiting from easing inflation, improved tourism, and private consumption. We continue to focus on driving profitability and hence emphasize on quality of subscriber acquisition to drive growth in core service revenue, despite third quarter being a low season. Mobile business shows steady growth from our consistent focus on quality acquisition, which helps drive blended ARPU up both year-over-year and Q-on-Q. In addition, in this third quarter, we implemented strict control in the prepaid identification process, which led to a lower gross add.
Also, in this quarter, we grew 5G subscribers towards 8.5 million, with quality 5G coverage of 87%. Also, to strengthen our 5G leadership, we entered into an agreement with NT to, number one, acquire 5 MHz bandwidth of 700 MHz, and number two, for NT to rent 5G network equipment and roaming service from AIS. The financial impact will be from fourth quarter onwards. On broadband side, AIS maintained double-digit growth, adding 52,000 new subscribers, with continued focus on selling higher value-added packs, which help us achieve higher ARPU. On 3BB broadband acquisition, NBTC announced the agenda to be considered on November tenth. Enterprise business grew double-digit year-on-year and Q-on-Q, with a clearer political solution situation and with some key projects closed in this quarter.
We now have a solid foundation to drive long-term growth from core content connectivity service, platform service, and selected vertical solutions. On profitability side, we delivered a strong year-on-year net profit as we maintain strong discipline to manage cost control and optimization. As a result, the performance for the third quarter shows an increase in core service revenue of 2.9% year-on-year, leading by strong broadband and enterprise business. EBITDA improved 7.2% year-on-year, with a healthy margin of 51% from core service revenue growth, lower pressure in utility cost, and effective cost controls. With improved operating performance, our net profit grew 35% year-on-year and reaching around THB 8.2 billion. We reported one-time gain from Rabbit LINE Pay divestment in this quarter, recorded under other income of THB 434 million.
Excluding this one-time gain, the net profit would be THB 7.7 billion, an improvement of 28% year-on-year. Our guidance remain unchanged. For 9 months of 2023, the core service revenue grew 2.3% year-on-year, versus half year that we reported 2.1% growth. We expect the high season in the fourth quarter to drive towards the lower bound of the guidance. The EBITDA came strong at 4.2% year-on-year, versus when half year we reported at 2.7. This is more or less in line with our guidance. Overall, our strategy in targeting profitability and strong operational excellence remain intact to deliver performance for the year. This is the end of the short brief. We start the Q&A session now. Please be reminded that you may reserve to ask the question through the chat box.
Please type your name and also the corporate name. Ka, first question we have Khun Pisut from Kasikorn.
Hi, Sawasdee ka. Thanks for the opportunity. This is Pisut from Kasikorn Securities. May I have three questions? Can you hear me well?
Yes, Ka.
Yes. My first questions. Regarding the ARPU, you know, overall mobile ARPU recover nicely for a few quarters. But your mobile subscriber was, you know, lower. So, the mobile revenue is then stagnant. It would be great if you can share your thoughts on these situations in the coming quarters. My second question, if looking deeper in the postpaid and prepaid performances, prepaid revenue remains softer this quarter, while postpaid net add was negative, despite a lower churn in the quarter. Could you please share your reading on this set of statistics, and what do you expect the trajectory of these driving factors in the coming quarters? My last question is regarding the cost and benefit from acquiring 700 MHz spectrum and upcoming 3BB, if you can comment.
In near term, would both acquisition deals end up with net additional profit or additional loss, from your P&L in fourth quarter this year or first quarter next year? In medium term, what would be financial contribution from both deal, that, the company would be able to realize, and in what magnitude, to your earning base? Just a rough figure would be appreciated. That's it for me. Thank you.
Thank you. Allow me to take the first two questions regarding the ARPUs now and toward Q4, as well as prepaid and postpaid situation toward the Q4 as well. In general, the market has continued to improve in competition conditions, so we are very focused on acquiring quality customers, as Khun Somritai has earlier mentioned about. So we see definitely much lower inflow of the gross adds. By focusing on quality means that we are not focusing on the very price-sensitive and low plans. So that's, as a result, has been an impact from much lower gross adds. Whereby the churn itself has been ongoing from the previous quarter, slowly coming down. It will eventually meet at some point soon on the gross and the churn. It will be a matter of a few months ahead.
So that's how I can read it, but also depend on competition anyway. In Q3, there are a lot also to do with two more things. Number one is overall economic conditions, whereby consumer spending in mid- to low-tier are not rising as we wish it could have been. So with that, the consumption of purchasing new device, as well as sign up for more spending, has also been slowing down. We somehow see a kind of climbing back in October, so we hope that in Q4, the economic conditions, as well as the sentiment in spending, will kind of coming back. We have source of good prospect toward the end of the year.
On the question number 3, I will answer you like this. As you all know that these two project, NT 700 and also acquiring 3BB, this is our two major strategic project in the long term. For sure, we do this kind of two project for our long-term revenue growth and also the profit growth. In the short term, we may have some effect in the bottom line. However, it's not much based on the very good deal in this matter. If you do see in detail on the 700 MHz, if you remember, when we go to the auction of the 700, at that time, we are trying to acquire 10 MHz from the auction to combine with our existing 10 MHz of 700.
But when the competition is up to 35 billion THB on the 10 MHz, we walk away. That why CAT get that. When we have opportunity to take another 5 from the CAT, this is also lower price than the last auction, I think more than 2 years. This is our gain benefit. And also, this deal of 700, it also gain us a lot in term of we try to be the leading in the mobile industry. This, that mean we have to deploy more 5G capacity nationwide. Having the NT project, we can deploy our NT 700 with a NT partner to utilize our network also.
So it's like a win-win, both AIS and NT, who are willing to have the mobile service, but they cannot invest by themselves. If they have to invest by themselves, they may have spend more than, I think, THB 100 billion to deploy nationwide network. But when we work with us, very cost effective to do so. However, they still have some segmentation to do based on their less positive. On the 3BB is also, you all know that we are the number 3 in the broadband market today. We have the high aim to be the leader in this market. If we organic growth, we may take another 5 years to make it happen.
When we have the opportunity in the 3BB, that this is also on the right time and right price. On the deal, I think it should be our win-win. In summary, I cannot tell you exactly the number, but you all know in the detail and condition, like the JASIF that we try to negotiate, it should make us, in the long term, more healthy in our business.
... Maybe to add a bit on 3BB, the complication will be on the accounting practice on the JASIF rental reduction. I think we'll wait to see how JAS book the rental reduction, because it's a lot of complications around whether it's one time or whether it's going to be adjusted towards the remaining contract. That part will affect the accounting profit. But in terms of cash flow, we believe that in the first or at least, you know, first 18 months, we can turn it to be cash flow positive.
Just to add financial implication on 700 MHz. The deal with NT has two parts, right? The spectrum portion that we buy from NT is pretty straightforward. So the value is THB 14 billion, of which you can use the normal amortization with a deferred interest. So that's on that part. On the rental agreement, we agree to deliver 13,500 sites to NT within two years' time. So the rental will be gradually received as we deliver in phases within the first two years. So expectedly within this year, there's not gonna be much of the financial implication, but more so toward 2024, and the rental rate is THB 4,800 per site per month.
Thank you, Kap. May I have one follow-up question? I think from the news, one commissioner of the NBTC, you know, has mentioned about the big round of the spectrum auction, probably in 2026. That may include, you know, 3.5, 2.1, 2.3, 850. You know, if it's not grabbed for the high speed railway, or maybe including the 1800 MHz that some of them unsold. May I get some thoughts from you that what's going to happen probably in 2026 or in 2025 if the spectrum auctions take place? You know, as you know, we have the bad experience in the 4G auctions in 2015.
What's your thought on the new spectrum auction? Thank you.
I think on the new auction, all the NBTC board member already understand the past experience that are very bad. Now they try to arrange to come up with the same time in the auction. That means they plan to make the operator who provide this type of service can plan very clear on the spectrum roadmap also. You can see because of 2.1, even 1800 or 2.3, it belong to NT, TOT, and CAT, that AIS and DTAC through lend from them. This when expire, we still need to continue to use.
I think it's a positive side that NBTC try to come to auction, and I think when the auction, the cost will lower in my opinion, lower than rental from NT today for sure. And based on the past experience, and it not gain much in term of the country or benefit. I think in this period should not have very serious auction like the past, because today we are in the two player market also. And NBTC today more understand it's not like the past NBTC board member that have the aim to show their performance by get more money to the government side. This is a very different mindset of the NBTC board member.
Yeah, very useful. Thank you very much, Kap.
Ka. We have Khun Wasu from Maybank, Ka.
Hi, good morning, and thank you for the call. So my first question is about the subscriber loss during the third quarter. So the question is that why did AIS lose even more subscribers during the third quarter when compared to the second quarter? And should we expect the acceleration in the subscriber loss to continue in the fourth quarter? So that's the first question about the subscriber trend. The second question is about the reason behind appointing Khun Nattiya as the CEO of the broadband business. So what are the reasons behind the appointment? And should we expect any change in the business direction after we have a new CEO for the broadband business? That's my second question. The third question is about the trend of the depreciation expense.
My understanding is that some of your 3G assets have become fully depreciated, resulting in lower depreciation expenses Q-on-Q. Should we expect the depreciation to drop further Q-on-Q in the coming quarters? And that's my third question. The next question is about the NBTC decision regarding the Triple T Broadband deal? Because I think after the market closed yesterday, there's a lawsuit against the NBTC regarding the approval of the True-DTAC merger. And would that lawsuit have any implications for the Triple T Broadband deal? Would there be any delays from the Central Administrative Court accepting the case related to the True-DTAC merger? Do you see any implication from that? So that's also the question as well.
And lastly, the questions are about the Triple T Broadband itself. I think I heard Montri mention about accounting issue related to Triple T Broadband and JASIF. I'm not sure if that's related to the late payment, late rental payment by Triple T Broadband to JASIF. If it is not, what is it about in terms of the accounting issue? And one more question about the cash flow. Since Montri mentioned that you are aiming to turn Triple T Broadband into positive cash flow in the first 18 months, is that cash flow from operation or free cash flow? Those are my questions. Thank you.
I will answer you in the number two and number four for the Khun Montri role as a CFO. He done really well in the CFO role. This is our normal succession plan in our company. I also plan my successor in many persons in the company. When Khun Montri can complete in his CFO role, when we have the opportunity to do the new business, merging with 3BB in the fixed broadband side, this is one area that gives the opportunity to Khun Montri to do overall business in the fixed broadband. This is the thing. And also, we also plan Khun Montri as a successor of the company. So this is also the good opportunity for give Khun Montri to take this role also.
This is our normal section plan. On number four, on the NBTC approval of the TTTBB, I can tell you very clear in our TTTBB and True and DTAC case, it's very different in two things. First, our procedure to ask for NBTC, we are very clear to send the letter to NBTC board member to get the approval of our deal, of our deal, not just only acknowledge at the True and DTAC case. When we go to the process of approval, there are a lot of process, a lot of things that NBTC board member have to do, like set up the subcommittee to verify our deal and also waiting for the consultant opinion from foreign company, something like this.
That's why they postpone to fifth of November to waiting for the consultant result. I think, when True and DTAC case, they don't even see in detail of the consultant recommendation and get the acknowledgment to let this deal done in the stock market. This is very different. The second thing, I think our deal is also very, very easy and different from True and DTAC case, because when we acquire TBB, this business is not less to two-player market like True and DTAC deal, because we have, I think more than 10, 20, even 100 small company can do the fixed broadband business.
But the major corporate may be three major player, not two, na, like AIS, TBB, True Online, and also we have NT. So it's not a duopoly market also. And our deal is not related to the frequency that is really important resource to do the business. This two factor, I think, NBTC board member can consider our deal very clear. Let's see on the 5th of November, what the resolution, because we ask for the approval, very clear and very transparent process. I don't think the lawsuit case with True and DTAC because we are very different condition. We will affect us on that lawsuit case.
Thank you, Somchai.
Let me take the first one, Khun Wasu. Regarding the subscriber net negative for the last quarter, as well as the prior quarter, especially for prepaid, is causing by a clear focus on the acquisition of qualities. So rotational churn that we have seen significantly decline, so the market adjust. So we believe that Q3 for us is the peak adjustment of the market behavior, as well as the acquisitions to the quality will get impact to us. We only focus on quality and expect to improve the overall in quarter four. So we do not plan to see more of the loss in the upcoming quarter.
Sorry, just to clarify on the 3BB. I tried to kind of summarize, but I think it didn't come out right. So let me try again. What I tried to explain is basically, I know that the analysts will be, you know, wanting to know how to forecast the impact of this. It's actually come down to, I think, three things. One, accounting profit. Accounting profit, it will be a little bit complicated, mainly because of the rental restructuring with JASIF. The 20% guarantee that got canceled, together with the extension of the main contract. I think that's one of the reasons why we still cannot tell you how the net profit will be. It will depend on the auditor and JASIF, how they book that.
If you recall, when they sell the asset, they book one-time gain. So now, you know, it could be a combination of, you know, one-time gain, plus some adjustment over the longer contract period. And then we, we would need to wait to see the impact from that, so that we can forecast accounting profit. Second one, I think we look at more of the operation operation profit. Operating profit, we do believe, as you see from the number already, operating, they're actually making operating loss, last year and this year. I think we, we believe with the synergies and everything, we can turn operating to be profit within 12-18 months. I think that's what we, we, we aim to have ourselves.
But in terms of cash flow, once when they get the reduction of rental, I think cash flow to us, when we manage it, will be accretive. So it won't drain the cash flow from us. So that's what I'm trying to say, but maybe it didn't come out right the first time.
Okay. Your last question on D&A. There should be quite a bit of ongoing 3G full amortization coming in fourth quarter, as well as throughout the next year. However, in the fourth quarter, as you may see, that against our CapEx guidance for nine months is still quite low, so we expect a bit of the acceleration of the CapEx coming through in the fourth Q. So some of that may also offsetting the impact of the fully amortized 3G.
Thank you, Ka. My last follow-up question is about the revenue trend. And in this quarter, it's clear that the ARPU is rising Q-on-Q, but the subscriber loss is so big that the revenue end up dropping Q-on-Q on the mobile side. I think some investors are concerned about subscriber loss offsetting the ARPU gains. Can we assume that this trend will stop in the fourth quarter, in the way that the ARPU increase will have more weight than the subscriber loss, resulting in a revenue improvement Q-on-Q in the coming quarters? Is that reasonable to assume?
Yeah. Thanks for your question. Maybe let me try to answer that. On the loss of subscribers in the last two quarters, as Khun Pratthana explained, actually, there are two main contributing factors. One is, I think the state of the economy in Thailand. The economy was pretty soft, so there was a loss of active customers. The second one is zero ARPU customers leaving the base. As we focus more on quality, that translated into less zero ARPU customers. If you recall, when True and DTAC merged, actually, they lost about 5 million subscribers. There's a similar phenomena. We don't deliberately push out customers, but when we raise prices, the zero ARPU customers also left the system. So that explains the...
In fact, a big chunk of the loss, when we deep dive into such numbers, came from the zero ARPU customers. On the ARPU rising, we do expect that to continue. Of course, it cannot continue indefinitely. It will reach to a certain level we are comfortable with, where the market can, can bear. And therefore, we are optimistic towards Q4. Q3 is typically AIS, lowest quarter in the year. So Q4, we are optimistic. Loss in numbers not expected to get worse. ARPU, slight uplift, I would say. Thank you. Hope that answers your question.
Okay. Thank you, Ka, and congratulations on the strong earnings results.
Ka. Thank you, Ka. Next, we have Piyush, HSBC, please.
Yeah, hi. Good morning. Thanks for the opportunity. A lot of my questions have been answered, actually. Firstly, congratulations to Khun Nattiya and Khun Montri on your new roles, and all the best. Firstly, Ms. Khun Nattiya, you know, I know this was asked earlier, but just wanted to clarify and confirm that there is no strategic changes in the broadband strategy after your appointment. This quarter, we have seen strong growth in the fixed broadband ARPU. So if you can talk about the outlook going forward. That is first question. Secondly, on the enterprise side, can the growth be sustained, or there was one-time boost from project closure in third quarter?
Just lastly, on the Rabbit LINE Pay, if you could share your learnings from that investment and what led to the decision to divest the stake? Thank you.
Yeah, I think on the broadband direction, for sure, I think we won't change the overall direction. I think we still want to grow the market. We still want to upsell and cross-sell to a higher value pack. The other thing that we may want to add is we want to differentiate our service, really the product and service, compared to competitors. And that's something, I think, is to be seen. We want to deliver more than just you know broadband and connectivity. So that's something we will try to make it happen. Maybe I'll take on the ILP. I think ILP during the time of entering into the JV, I think it was the right strategy.
Try to utilize the e-wallet, e-payment opportunities to increase stickiness and value to our customers. But given how the industry developed, banks are coming in, there was a change in the KYC requirement, so that e-wallet actually have almost as strict as procedures as opening a bank account. So in the end, it requires a lot more of the internal ecosystems to drive the volume to compete with the banks, with the mobile banking. Thus, I think it makes more sense that we actually sell that back to LINE. But I think we didn't regret the move to move even to enter into the JV, yeah, from the start.
I will take the question on enterprise. You know that enterprise deals tend to be lumpy, project by project. So I'll say that, on EDS, the rise of EDS is something that we plan and we nurture. The rise in the cloud revenue is something that is more one time, in this quarter. We were fortunate to close some pretty big cloud-related deals in the Q3. But while the deals in enterprise are lumpy, there are other deals in the sales funnel, so we do hope we can bring those to closure and keep up the growth in enterprise. But we've got to wait and see. Thank you.
Got it. Thank you very much. It is very clear.
Next, we have Ranjan from J.P. Morgan, Ka.
Hi, good morning, and thank you for the presentation. Couple of questions from me. Firstly, management, if you can help us understand, like, how sustainable are your reduction in marketing costs? If you look at your handset subsidies plus marketing costs have declined to, like, 2.8% of sales. I think it's the lowest you've ever had. You're indicating that the revenue should improve in the coming quarters. So how's Is it fair to assume that these costs will remain this low, or could they go up? Related question is, you have, of course, had a lot of success in reducing the cost of the business. Could these costs go down further? Where are there rooms to optimize the cost base?
The last question is, you're guiding for core service revenues to accelerate from what you've seen in the first nine months of the year. Which will, which will be the key drivers for that? Will it be wireless, fixed broadband, or enterprise? Thank you.
Let me take the first one. Ranjan, let me take the first one. On marketing, it's a lot also to do with seasonal. In Q3 is low seasons. The new device are coming in late Q3, which is iPhone, and ramping up in Q4. There are highly correlation as well on the marketing side of the device, marketing, subsidies, and overall marketing spending. So I would say we are very much focused to the consumer values toward the demands and services. So I would say this is highly related to the seasonalities.
Ranjan, sorry, can you repeat your second question?
My second question, sorry, for, I believe it was around the revenue. Sorry, the overall cost base of the company. So you've been reducing the, you've had a lot of success in reducing the cost. Are there other avenues to reduce costs further in the coming periods?
Actually, uh
Yeah, I think on cost, we try to do our best this year, given that the headwind we saw since the beginning of the year. A lot of those cuts, sometimes it's short term, but some we also transform the way we operate to make sure that it's sustained long term. I think people ask a lot about marketing expenses. I think that's one thing that it may creep back, but we also change the way we do marketing and we do promotion. So even though it's gonna creep back, it may not be go back to the same level. In terms of other things that we may continue to do more, I think one is we always try to optimize our power consumption.
I think we, you know, find ways to get new equipment that has better power consumption. You know, there's also software and, you know, to manage all that. That's something that we will continue. There are other things that we may change our kind of operating model internally to be either more digital-oriented or at a lower cost of service. That's something we will continue to do, and hopefully it, it can start to have some effect into the P&L next year.
Let me respond to the last question about revenue drivers from the first nine months of the year, right? I think that's your question, if I'm not wrong. Q4. Oh, okay. Ah! Okay. Whether we reach guidance, we hope so. But I will respond by saying, you know, our revenue growth, if you look at our three pillars of businesses, each line of business has been growing. I think mobile has, And a lot of it is driven by our focus on quality subs and quality acquisition. So, mobile has been growing at low single digit year-on-year. Our broadband business is growing quite nicely, I think, in mid-single, mid-double digit. Enterprise is on the higher end of single digit.
ARPU has been gently rising, and we want to keep it that way, growing in all three lines of businesses. So it's a lot of focus on quality, and we are optimistic that with the government, new government formed and the economic measures, flowing through the society and the businesses, we are quietly optimistic that this can translate into better growth for our businesses. Hope that answers your question.
Yeah. Thank you, management. Deeply appreciate it. Maybe a quick follow-up. For the wireless revenues, have you seen the pickup into October?
Yes. Wireless, in Q4, have we seen the pickup? I think mentioned that just now. Y ou want-
Just to add on that, in October, we start to see the pickup. I also believe that this is also a positive impact from coming back off a bit from economies, as well as the much more confidence in product and service that customer have. We see the pickup, yes.
If I may supplement the response on the cost part. I think one thing you might wish to note that if, when, if and when the 3BB deal gets done, I think that will present AIS with scope on further, cost optimization, I think, across a wider spectrum of areas. Yeah.
Great. Thank you.
Thank you. We have Arthur from Citi, please.
Hi, thanks for the opportunity. Three questions, please. Firstly, can you clarify the profit outlook on the 3BB acquisition? Because I initially recall the company was guiding that it expects this to be immediately accretive, and it had already actually proposed that rental revenue guarantee revision, although initially rejected by JASIF unitholders and subsequently reversed. And what's changed with the outlook, such that the outlook on profitability seems to be delayed? Second question I had is with regard to mobile market share. I understand that you're focusing on mobile, on quality users, but it seems that you are missing out on the opportunity to gain share from your competitor, who's undergoing transition following their merger. Why won't AIS capitalize on this? Even if they're low-quality users, they still contribute revenues against a fixed cost operation.
Basically, I'm trying to understand why not capitalize on your competitor to gain share while they're going through internal disruptions, and now we're seeing reductions on, on marketing spend? Last question I had is with regard to the comment on the revenue pickup for mobile in October. Can you just clarify, is this on a year-on-year basis or on a month-on-month basis? Thank you.
Okay. I think we'll need to maybe have a few series to explain on this. I think first of all, the why change in the prospect or expectation? One, because the deal's delay. When the deal delay, I think there's a lot of things that impact in the way we try to you know build the business back up. So it take a bit longer time than what we initially thought late of last year. And also the second one, even though we still get the rental reduction from JASIF, but at that time, we were you know thinking that you know if we had done it, then it would have been you know one accounting treatment.
You know, in reality now, JAS is the one who did it. I think the way that they may choose to account for the reduction could be different from what we thought. So in the end, that's why my first try was I tried to separate the accounting profit out from the operation profit. At least I think for me, our focus is to make sure that operation turn positive, as quick as possible, given the synergies that we expected. But then accounting, and I think in the end, we'll come to explain to you why the non-cash items are there and all that, right? In the end, to me, I think it's if we can generate more free cash for the company, that's the most important.
That's why I try to say that with the reduction and the synergies we expect, we actually do think that the cash flow will be accretive since day one.
On the second question regarding opportunity of gaining market share or is a window of opportunity you mentioned about. For us, as we continue on, we really focus on getting the best product, so customer could, if it or they were to move to AIS with quality of product rather than price. So during this period, they continue on an improvement of market offering. We no longer provide unlimited low plan to attract price-sensitive customer who move across. That has been destroyed in the market for the past two years. That clearly, our intention not to do so. On the other side, we actually continue on, focus on investing in the network infrastructure to deliver the top qualities.
The whole aim is to have great quality product and service, so customer can choose, and focus on qualities. So you may think, why wouldn't we grab it? The very price sensitive, it's probably not possible to grab because they go for the lowest plan. And competitors have a clear intention to protect at any cost, inclusive of free. So that's in term of subscriber number. When Khun Mark mentioned about zero ARPU, customer means that customers stop using and they switch around. So that particular segment of customer, probably the last segment that we want to jump in, so it will take a bit of time. The third question regarding October, whether it's month-on-month or year-on-year, we see both month-on-month and year-on-year.
Understood. Okay, thank you very much.
Thank you. Last, we have Khun Supachai from Yuanta.
Hi, thank you for the opportunity. Can you hear me well?
Yes.
Okay. I have only three questions. The first one for Khun Somchai. What should be an optimal mobile service revenue excluding IC growth in the Thailand market, assuming that going forward, we will have two mobile players?
I think I used to guide that in the market because our product and service, it relate on our GDP growth. In the past, when the industry is growth, we will over the GDP allow 1-2%, except last 2-3 year, that we below the GDP based on really suffer of economic and also high competition a lot. That mean we cannot grow according to the GDP. I think based on our strategy that Khun Pratthana try to explain to all of you that we are a leader in the market. We try to restructure our industry in the good shape, in the good way.
If we jump and take the opportunity when they merge together in this period, we can do to gain the subscriber, but the market, it will be back to the last two, three year. That's why we are really patient in this matter, try to lead the market. I saw the, our competitor also following up. So if I give you the guidance, I think based on the GDP growth, our mobile revenue will according to the GDP. If we can restructure the, the market better and better, it should be above GDP, around 1%-2%. This is, my guidance, my observation.
Thank you very much, Khun. I would like to ask Khun Mark about the enterprise business. What is the long-term plan to bring the enterprise business to resume the double-digit growth in the upcoming year? That is my first question. My second question will be my observation in the market. Most of the small SI stock in Thailand market, they complain about the lack of government project, and this bring the delay to the big bidding in the market. Would this will impact AIS target in the future, and what would you try to address this problem? Thank you, Khun.
Khun, let me address the question, the first question first on the long-term plan. You know, basically, we see the industry will continue to growing, and definitely digital transformation will be the greater customer driving the business. But our plan is to grow, you know, double digit every year. So the way that we're going to bring this business back to the growth is that the first one is on the EDS side, which we continue to invest in adding more solution and services by SC Brand. Now, that make us, you know, driving the growth, you know, even faster than market. Secondly, it's pretty much on the value-added services, you know, on the cloud and the services that we provide to the customer.
The third layer will be the future growth that we bring, you know, differentiation to the market, like integrated platform, you know, for Paragon and also CPaaS that we can have, you know, announce, you know, in Q4, which is the unified communication. Thus, we believe that it's gonna be the good engine to drive the business to continue to grow well, you know, as stated. You know, this year we really focus on, you know, clear target in term of the value customer and also profitability, which everything is continued on plan. So that this year, you know, it will be the year that the, you know, do some adjustment and then moving forward for the futures.
So on the second question, pretty much on the SI and government, basically, our business cover, you know, end-to-end full spectrum from large enterprise to SME. We didn't rely pretty much on one or two segment in the market. Now, we do see the good growth this year in the SME, you know, the hospitality services pick up and also retail. So we pretty much diverse and diversify in term of the segment that we play. Some government, you know, lack. I think that is a fact in the market because the market who are looking for the clarity on the political side, which we also do see more clearer in the political setup, and also that also start to impact and getting more deals for the future.
Okay, thank you very much, Cup.
Khun. Thank you, Khun.
Thank you, Cup. We have from Kasikorn again.
Yes, this is again. Thanks for another opportunity. May I have only one last questions. I think the Apple uplift is nice to have. However, the economic situations does not look good, especially for the grassroots customers, right? Considering the mobile service as the infrastructure of the country and the necessary services for the people, is it possible for the government or the regulator to jump in and stop you and also your competitors from raising the tariff? How can you balance this to avoid possible government intervention? Thank you, Khun.
Let me address a little bit when we talk about restructuring the price. The very low one, unlimited low plan is far beyond reasonable. Means that anyone who provide that will operate at loss. So that's probably the key point that we have not been highlighting earlier. When we took away that plan, it doesn't mean that we do not want customer to be able to access to communication and internet, but we want to make sure that what we've been providing is up to quality with very reasonable price, and it is sustainable.
I think, by regulation, they also try to control and protect the consumer benefit all the way. However, the rate that they announce in regulation is still higher than the real one in the market today. I don't think we will have the problem in this control from the regulator, because now we are compete together. Even we try to raise up the price, still below the regulation guidance today. You can see no one complain much, even where the economic not good, not complain much in term of the pricing. They might just complain in some area, how cannot connect well, something in some area only. Never complain much in the pricing.
Thank you, Cup.
Thank you, Cup. Thank you, Cup.
Actually, if I may just supplement a bit. I think we are very cognizant that the mobile service is a basic infrastructure of the country, and we have not raised the lowest price plan in the market. It's still at 150 THB. That hasn't changed.
Very helpful. Thank you, Cup.
We don't seem to have any further questions. So, before we end this session, please allow us to remind you that we have the Next Evolution event on the sixth of November at Queen Sirikit National Convention Center. The event will be held from 9:00 A.M., registration, where we'll have the main event in the morning and a breakout session in the afternoon, where you can choose between AIS Business and AIS Greenovation . Please respond within today, so we can reserve your spot. Thank you everyone for participating and see you again next quarter. Happy Halloween, Cup. Please enjoy your trick or treat.
Thank you.
Thank you, Cup.
Thank you.