Good morning, everyone. Welcome to our first second quarter of 2023 result conference call. Let me introduce the management that with us here. First, our CEO, Kun Somchai Ka.
Good morning.
Our Deputy CEO, Kun Mark Chong.
Morning, everybody.
Chief Consumer Business, Pratthana Leelapanang.
Uncertain
Our CFO, Somruetai Tantakittianan
Good morning, Ka.
Our Head of Investor Relations and Compliance, Kun Tee.
Good morning, Ka.
Ka, myself, Somruetai, will be briefing you the results and running this session. The session will begin with a short brief and then 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 corporate name, Ka.
First, on the economy, the second quarter shows a cautious economic recovery from a gradual revival of global tourism, coupled with a slightly improved private consumption, while the inherent risks remain in the local political uncertainty, causing customers to be more cautious of their spending. AIS overall focus is to grow the revenue with profitability in both businesses and operations, to ensure that the cost is considered truly in offering products, and keeping in mind of a sustainable growth in the revenue for the long run, while delivering values to the customer.
On the mobile side, our quality acquisition strategy may generate lower new prepaid subscriber, but it helped grow the total revenue through value package offerings in profitable segments. Together with revival of international traveling, our mobile ARPU improved 1.6% Q-on-Q. AIS will continue prioritizing customer experiences while continuously strengthen the network and service quality to further deliver the revenue growth. Our broadband business maintained double-digit growth, with improved ARPU by 1.8% Q-on-Q. The net add may be lower than previous quarter, but this is a result of our focus on profitable revenue growth with quality acquisition through higher value packages, which offset the lower net add to deliver the momentum in the revenue. We remain committed to create values in the broadband business, offering high quality and high service standards to address the genuine demand for quality internet at home.
On enterprise side, the growth is maintained with focus in high-margin products, riding on the demand for quality connectivity with improved technology like EDS with SD-WAN and the digitization with 5G networks. AIS will further focus on connectivity foundation like EDS to cross-sell into multi-product relationship, bringing cloud-related products and the tailored vertical solutions for the targeted industries to the customer. This will be reinforced with our flagship AIS 5G PARAGON platform to continue growing the enterprise business. Lastly, on cost optimization, we continue our initiatives to soften the year-on-year utilities impact and to achieve operational efficiency. It is our aim to bring our cost inflation, excluding utilities, lower than revenue growth in order to deliver the return to our stakeholders. With all our efforts, our first half showed a growing core service revenue of 2.1%, leading by quality mobile and broadband focus.
Our effective cost management further helped bringing the EBITDA growth of 2.7%. With better operating performance, our net profit grew 10% year-on-year and was at THB 13,937 million, or THB 4.69 per share. The board approved the interim dividend payment in the total amount of THB 11,897 million, or THB 4 per share, at 85% payout ratio. Our result came in line with management's expectations, hence the guidance remains unchanged, and this is still excluding the Triple T Broadband impact. We believe our strategy to focus on profitability would provide a positive momentum in revenue.
The execution of cost saving and controls will yield further results, where we are driving to change our operating model in our core foundations with autonomous network, IT intelligence, and data insight and customer care to deliver this performance. This is the end of the short brief, and we'll start the Q&A session now. Please be reminded that you may reserve to ask the question through the chat box with your name and corporate name, Ka. We have Kun Wasu from Maybank, Ka.
Thank you for the presentation, Ka, Pisom. I have 6 questions in total. Perhaps I can go with the first 3 questions first. The first question is about the, the subscriber trend, especially for the mobile business. Why is there a difference in subscriber trend between Advance and True? True seem to gain a little bit of subscribers, while Advance lost subscribers in the second quarter. That's the first question. The second question is about the outlook for the non-mobile enterprise revenue. I'm curious about the outlook of this business segment because the enterprise revenue growth was only 1% year-on-year in the first half of this year. In the past, I have seen that the enterprise revenue always had double-digit growth each year, but it seems to be slowing down this year. Why is that? That's the second question.
The third question is about ARPU. Do you believe that ARPU increases in the mobile and fixed broadband business is sustainable going forward? Those are the first three questions, Kap.
Let me address the first one. Regarding the subscriber trends, AIS is very much focused on the quality customer. In the latest quarter, we have much, much less focus on rotational churn customer. The short-term prepaid that highly rotated, has been not focused, whereby our competitor, as you read the report and ask them, they has been adding highly rotational, inclusive of Myanmar and travelers, as they declare. That makes the actual customer, have less for AIS. The real customer, the value customer, are key to us, and we continue on monitoring the growth of that, and we quite satisfied on that piece, Kap.
I On the non-mobile of enterprise, this is our clear direction, because in the past, we go enterprise on the non-mobile by selling everything on the ICT path, that we now we move to focus more on the profitable instead the revenue growth. To grow enterprise in the in term of ICT, it's very easy, but I think it's not healthy. We will focus on our core non-mobile thing, like the EDS, like the cloud, like data center, and also a 5G vertical industry that we selected, that will make us more scalable in this matter, nakup. We don't sell, like, the only equipment to grow the revenue fast as the past. This is the main reason.
For the third question regarding sustainability of ARPUs, let me address on the mobile side. We truly reinforce the values, and we want to build a sustainability of the value and ARPU. I cannot predict the competitors, but for us, we really must focus on that, and we want it to be very sustainable.
Yeah, just, just to add to Khun Pratthana's comment. I think we, at AIS, we, we believe that we want to focus on higher value segment, more than I think the low end. I think we, we have been saying about this for the past many years. There are certain segment that we can do business with and get, I think, good returns, and there are some segment that is very risky. I think in the past 2 years, we have been trying to focus on the more profitable segment, and that we can deliver more value to them as well. They, they, I think they see more benefit, and for us, it's also a more sustainable business that we can, we can deliver to, to them.
We, we do believe that the trend will be sustainable, hopefully, because it's a win-win situation for the operator and also for consumers.
Hello, please ask your further question.
Okay. Before I move on, may I ask about the enterprise revenue again? Is, is it reasonable to assume, like, low single-digit growth for the enterprise revenue this year?
I think we still set the target on the low double-digit growth, maybe 10%, 20%, something. It depend on the demand in the market. Like I used to tell you that enterprise non-mobile market, it was huge in the market. Allow THB 300 million total revenue market, but most in the equipment sale, that did not generate more profit. We try to back to focus on our core non-mobile, which can make more profitable. This is the thing that we will try.
Yeah, maybe just to add a little bit, it, it's not only the ICT when we grow non-mobile in the past. A lot of that is a sale through. We, we want to do that to gain certain scale. However, I think at certain point in time, we want to pivot more towards, I think, our own product and services, which we can actually manage more the margin. Going forward, we may not push for a very high growth number on the non-mobile enterprise business, but we want to really look at something that we do, and it can tie back to the core business, as well as, you know, utilizing our own product more than just a sale through. Yeah.
Okay, understood. Thank you, Kap. My remaining three questions, the first one is: What is the CapEx trend over the next three years now that Advanced has around 90% population coverage for the 5G network? The next one is: What is the latest update on the 700 MHz deal with NT? The final question is: What is the latest update on the Triple Play Broadband deal?
Let, let, let me take the first question on CapEx trend over the next 3 years. Yes, actually, we are 90%, practically 90% coverage. But over the next 3 years, we do expect CapEx trend to remain roughly at about this year's level, essentially because there's also a need to densify the network as more-
... on, on 5G as more hand phones come on board. That, that's the main reason. On 700 MHz of NT and also 3BB, broadband exclusion, or it depend on the NBTC approval. On 700 MHz, both AIS and NT board already approved this project. Now we are waiting on the process of NBTC approving the transferring the frequency, because on this deal, we also buy back their 5 MHz of 700 MHz frequency also. 3BB, as you follow the news, they are also in the process of a subcommittee evaluate our deal. I think it should no problem because according to, to NBTC, merger, they can acknowledge this deal. Our deal should no problem.
It depend on the time frame that NBTC will, go to their own total process and approve it up.
Do, do you still expect the Triple T Broadband deal to be completed within the third quarter?
We have the plan like this, but it still depend on NBTC. Based on NBTC, they also said, but they said allow maybe October, something like this.
Thank you, kap.
Thank you.
That's all my questions.
Thank you, ka. Now we have Pisut Poonsanong.
Hi, good morning, everyone. Can you hear me?
Yes, ka.
Yes, thank you. This is Pisut from Kasikorn Securities. May I have four questions? The first one about JASIF. As you may know, Gulf, your ultimate shareholder, has increased its holding on JASIF to 5%, and Advanced is about to buy 19% stake. Just wondering about the tender offer requirement. For example, you know, will the regulations count both, I mean, Gulf and Advanced, or only Advanced as a shareholder of JASIF? Also, is it correct that if you pass, you know, for the combined, if you pass 25%, it will trigger the tender offer? If it's happening, who gonna pay, gonna pay for the tender offer, either Advanced or Gulf?
About the tender offer price, if it happen, it's gonna be 8.5 baht, as you propose to buy it from Jasmine or something else? That's my first question. My second question is regarding your guidance. Your first half EBITDA growth was 2.7%, if I my conversion is correct, which seems slightly short of your full year guidance of mid-single digit growth. Your second half last year, EBITDA was, you know, bigger than first half EBITDA, which mean you are facing the high base. Could you share with us about, I mean, underlying assumptions that make you confident to deliver 5%-9% year-on-year EBITDA growth for the second half, if I subtract the full year with the first half of this year? This is my second question.
My third question is regarding your pricing restructuring, you know. What about it so far in July for both mobile and fixed broadband? Have you seen the sequential uplift in the ARPU from the previous quarter for both services? What about your competitor reactions on your price fixing implementations? I do notice that True has reintroduced the installation fee on the fixed broadband service, but I haven't seen you follow it. What was your thoughts on that? My last question, just wanna know your thought on the merger of TUC and DTN that just announced. Will this strengthen your competitors, service quality? If they can combine the spectrum, you know, what's your thought on the, you know, upcoming competitive environment, if it happening?
Thank you, kap.
I will answer you the last question, nakup. I think that this is all the original plan, try to combine TUC and TDN together. However, in the beginning that they proposed to the NBTC to approve in the holding level, that is a treat to get the approval from the NBTC. This is not surprise us. However, based on the thing that they need to do more, like the frequency consolidation, the combine, it's not easy. It have to go to the NBTC to get the approval for sure. And AIS also have the right to veto, because when we go to the auction, still have some condition in this position of frequency also. This is all the thing that, that, that they, they.
If they need to do something to make them more strengthened, it still depend on NBTC approval, na. I don't think this is surprise us. I think it's a normal plan that they will do step by step.
Allow me to take the third one on the price restructuring progress. So far it has been as we guided on plan. We have continuously see the stabilizations of the restructuring and repair in the market, as well as the ARPU, as also a result of this quarter. On the competitions, I would say we seems to feel that competition follows than what we have observed so far from the market. I also like to address a bit on the indication for installation fee. Installation fee for broadband has been sort of put in, we believe, is to prevent fraud. In many plan that has installation fee, customer will get the return each month.
For example, like installation fee could be 800 THB, and customer will get 100 THB back per month from month 1 until month 8, for example, or month 9, for example. That's to prevent fraud. So far has been for us, as we have been focused on qualities of acquisition, so that's probably not the issue of AIS.
On the second question, on your EBITDA guidance, yes, you are right. On the first half, we still cannot achieve based on the guidance that we plan the whole year. However, why we plan like that, normally on the second quarter and is the lowest, is lowest season of the usage of the mobile, trend to go high on the third quarter, actually in the fourth quarter. That's why we plan to get more revenue in the third and fourth quarter, because normally, this is the high season. However, there are some challenges on our guidance also, because as you know, today, the political uncertainty in Thailand, PM still not selected. Tourist also not come much as we forecast in the beginning of the year.
However, we still see the trend, of course, it still have some risks on our guidance, but, I push my team try to do best on the original plan on the third quarter and, fourth quarter is the high season.
Yeah, to add on Somchai's comment, I think there are certain costs that we, we do see is going to come down towards the end of the year. That part give us a bit of room. However, I think on the overall guidance, I think if we, we don't get the, the government sooner to kickstart the economic recovery, then, then there's, you know, some, some risk to the, to the guidance as well. On your first question, Jess, if I, I don't think we, we have a lot to comment. We, we have no control on what I think GF will do, but what I can tell you is we, we have no intention to cross the tender offer.
I think, in, in, in, in the fund itself, it's going to be very complicated if we, if we did that. There's, for sure, there's no intention of it, no cross to do a tender offer.
Very useful. Thank you very much.
Now we have Ranjan Sharma, J.P. Morgan.
Hi, good morning, thank you for the presentation. Two questions from my side. Firstly, the marketing spend has declined very sharply, 25% down year-on-year, 8% down quarter-on-quarter. Should we expect the levels to be where it has reached in the second quarter, or is there some delay in spend? Second, a bit off-beat question, but how do you see... Or whether you see Starlink launching in Thailand, and how it might affect your broadband plans in the country? Thank you.
Ranjan, let me address the first one regarding marketing expense. We very much focus on delivering the communications as well as the channel and also customer retention as a part of whole marketing expense. For the first half, we successfully implement a lot of strategy, including online, so it help us improve the efficiencies. Somehow, it's a lot to do with seasonal as well. In second half, there will be a seasonality start coming in, so we do expect to kind of spend over the high season of spending. On the Starlink question, we understand Starlink is, well, evaluating entry into Thailand. But really, Thailand, I think in terms of mobile coverage, is, is, is, is quite well established. As we mentioned, 90%, roughly.
actually, Starlink can be complementary in areas where there's no mobile coverage. In terms of affecting broadband, we don't think that will be a serious alternative. Yeah. Can even be complementary. Thank you.
Can, can I have a quick follow-up question on that? Firstly, on the marketing, if you have higher efficiencies coming from online channels, then we should expect the marketing spend to remain lower in the second half versus last year. Is that a fair assessment? Secondly-
It may not be... Sorry to interject. It, it may not be, because of depending on the program. I, I don't think we can say that.
Got it. Ranjan, actually, you're right. The first half has been, our marketing spend has been well controlled.
In the second half, as Pratana mentioned, it's high season, so you could expect some, well, slight increase, perhaps, in marketing spend. Yeah.
Oh, got it. Thank you. Then for the, for the Starlink question, do you have any idea on when they might launch in Thailand?
Sorry, no, no idea. Not in a position to talk about that.
Yeah, I think if you talk about Starlink, you should look at the service fee that they can expect to really compete in the Thai market. To me, I don't think we'll be high on that list, both from the coverage point of view, plus the service fee that they can, that they can get, you know. Because they need to compete with a lot of other local services that, that we provide here at, I think, quite a much lower pricing level. If they have other alternative options, then probably they, they, they may go for other country first.
Got it. Thank you.
Arthur from Citi, please.
Hi, thanks for the opportunity. 3 questions, please. Firstly, on 5G, why are we not seeing a firmer uptick in ARPUs? When you look at 5G penetration, it's basically double to high teens, yet you're not seeing improvements in ARPUs, even in postpaid. How do you reconcile that with a 10%-15% price premium? Second question I had is with regard to broader mobile pricing. What is the outlook for this into the 2nd half of this year? Now that the elections are over, is there room for price repair, or do you think this will be difficult in light of the environment? Last question I had is with regard to, the postpaid base. I noticed... I do know that you've mentioned there's a focus on premium users, which led to the lower base.
I'm just wondering, what's the difference in the terms with these rotational users? Are the rotational users not profitable at all, such that it deserves to be emphasized? Thank you.
For the first one, regarding 5G. 5G segment has give us about 10-15 uplift in ARPUs. Overall base are also still a mix of the lower plan, prepaid to postpaid, and all of those. It has been helping us stabilize. The ARPU has been increased a bit as well in term of 5G. For the second one, I'm not so sure whether I catch it correctly. Is that the question about an overall, the outlook for the ARPUs?
Within the market.
Oh, okay.
Yes, expectation and pricing.
Okay. As we discussed earlier, the hours, we believe that has been stabilized, and we believe that it will continue on, reflect the real values of what customer use. That probably what I can say now, moving forward. For the third question, regarding the value customer segment. When we talk about, and when Kunthi talk about high value segment, probably I, I like to kind of allude into the value segment rather than high value. The value segment, postpaid. This value segment, it, it means that we can serve them properly with the good quality as well as the right price point.
The low value segment or negative value segment, naming the super unlimited low plan, those one that we intended to curve it down, as you saw from the market, that is no longer available. I hope I addressed it correctly on the last one. Please.
Maybe I just elaborate a bit on the last part. Yes, I think the value plans are the postpaid plans, and we think those are the good customers to keep. On the prepaid side, of course, you have got those that are value, those who are transitional. We talk about migrant, transitional, holiday, tourist SIMs. At that transitional, prepaid segment, then it becomes a question of evaluating the life value of these customers versus the incentive, commission, whatever distribution costs that we may have to incur. That, that comes from our own analysis, that's built up over time. Yeah. Thank you.
Sorry, just to, just to clarify on the first question on the 5G ARPUs. I'm just not understanding this very well. If you look at your postpaid ARPUs, for instance, this has gone down-
Maybe if, if I may. Sorry to interrupt you. Maybe I just add on to the earlier explanation. The 5G ARPU has, is higher than the 4G ARPU. The proportion of 5G in the base is still relatively small relative to the whole base, because most of the 5G handsets are actually high-end handsets. They are not enough low-end handsets to, to convert the base. Yeah.
but this is basically doubled from 9% to 17% of your base.
Yeah.
Postpaid subs have been fairly flat, yet ARPUs have gone down. This would have gone down even more sharply if you didn't have this 5G migration. Is that how we should think about this?
It is one, but I think it's, it's, it's an average. There is I think you should see that as flat. Yeah.
Okay.
Okay.
All right. Okay, thank you.
Hi, now we have Piyush Choudhray, HSBC, please.
Yeah. Hi. Good morning. Thanks a lot for this opportunity, and congrats for a good of, good set of progress. 2 questions from my side. Firstly, mobile, can you update us what percentage of your subscribers are on unlimited plans? What has been the progress of moving subscribers away from unlimited? Also, just on the price repair side, how does company think about broad-based tariff hike across plans? Like, is that even a, you know, possibility given the macro environment? Secondly, on broadband, what has helped to increase the ARPU quarter-on-quarter? Is it the subscriber mix change to higher ARPU plans? Any, any kind of details over there would be helpful, and what's the outlook for broadband ARPU? Thanks.
Okay. For the first question regarding unlimited plan, we indicate earlier last quarter, it's roughly about, I think, 75%. It's a mix of the high-end plan and the old day, previously, the low-end plan. The second one, I assume I got it correctly, but let me try to address. What you are asking is, is there a way to adjust the broad-based ARPU up? Is that the question?
Yeah. With the tariff hike.
Yeah.
We are seeing, you know, trends of tariff hikes happening in India and Indonesia, right, where, where it is across, happening across the plan. Is that even a possibility? On the unlimited, like, what's that number now in 2Q? 25% of subs were in 1Q, right? Has it, has it changed in second quarter?
Coming back to the first one, roughly stable at 25% on the unlimited. On the broad-based tariff adjustment, here in Thailand, the tariff has certain validity. If someone, 1 subscribe to 1 cent, tariff would last for about 12 months. It would be changes of tariff per customer in the next 12 months for each individual. That would be probably the sequence in general.
Okay. I think try to read what's actually going on in the analyst's mind. Maybe, maybe first, let me explain this, that the way that we kind of slow down ARPU dilution, partly we contain cutting spending, is also which segment we focus in, in doing business with. As mentioned, I think we try to do business with or maximize the value with the mid to high value segment, we keep the low end as we need it. I think that's probably the way to think about this. When, when, you know, economy kicking back, I think the mid to high will have more money to spend. They have higher purchasing power. I think right now, instead of competing to get the low end, we actually shift the focus of the company plus the dealers.
Because you need to think of, of this as, as, you know, the whole engine, and there's cost in every, every element, whether you spend on low versus mid and high, right? I think right now we are not actually uplifting the ARPU or the whole base just yet. We're actually changing the mix, including the spending, throughout the whole system, so that we can actually maximize and optimize, maximize revenue and optimize the cost. Let's put it that way. I think it's also linked to the marketing spending, whether it's going to come back or not. To a certain extent, it will come back once we need to expand the, the, the low end of the, the, the base. For now, I think we try to optimize to get through this kind of economic low end.
On broadband, I think we, we also follow the same thing. Broadband is actually costlier if we get into the wrong segment, because the upfront investment is quite, is quite big. I think overall, you know, THB 5,000-6,000 per subscriber as an acquisition cost is, is, is possible. We actually still having the THB 299, THB 399 in the market in terms of price plan, but that will only be for the old technology and the low-end kind of speed level, which we're not going to focus anymore. We focus, you know, the, the higher speed tier, the fiber, and then the right segment. I think that's where I want to put the money in.
I think right now, the first step is actually, is the focus of the, the company on, on certain segment, so that we can optimize, you know, the race of the, the engine. That also include marketing spending, as mentioned, both on mobile and on broadband, right? Once we maximize this, this mid to high segment, then we need to go down and, and also find a way to do good business at the lower tier as well.
Got it. As you were saying, the validity of the plans is generally 12 months, so what is keeping the unlimited subscriber base stable quarter on quarter? So, you, subscribers are still renewing the unlimited data plans? You, you, you have not completely removed them at the time of when the renewal comes?
For the new subscriber, the unlimited low plan are no longer available. For existing base, there some has been renewed according to their usage. Some of them has been discontinued. We go down to the pure micro-segmentation to provide customer as is what is suit for them. Also there are higher end of customer who are in higher plan, naming more than THB 1,199, they also get unlimited. There's also two mix in that.
Yeah, I think the unlimited portion itself is not an issue. It's more the mix, whether it's low end or high end. Typically, when you renew the plan for the low end, a lot of time you still have to keep them unlimited, but at a higher price point. We slowly shift them up.
Got it. Got it. Thanks a lot. This is very helpful.
Thank you. Now we have Husnain from UBS.
Hi. Thanks for the call. Good morning. Most of my questions are answered. Just 3 small questions. First is that AIS is focusing on mid to high end of the market. Want to understand how much this low end of the market represent in terms of % of revenues, which AIS is not focusing on. I understand that it's not that profitable, but from the revenue point of view, just wanted to understand how much it represent. Then going to second half in terms of further cost optimization, means I understand that sales and marketing has come off quite a lot, but what are other areas, of course, where you see potential for further reduction going into second half?
Just a clarification on network OpEx and NT partnership costs, which was up around 6% quarter-on-quarter. Want to understand what drove this increase quarter-on-quarter. Thank you.
Well, we have 46 million customers, we think all of them are important. If you look at the penetration, mobile penetration in the market, which is 150-160%, we are really seeking ARPU-generating customers, not those SIMs that are distributed for free and not really generating ARPU. There are free SIMs being circulated for transitional users, that's the kind of low-end, low-ARPU, low-revenue-generating customers that we do not seek. That's what we mean. Even if you have 150 baht on a regular basis, to us, that's an important customer to have. Yeah.
I think on cost optimization, for example, I think towards the end of this year, then we do expect electricity costs to come down, versus, I think, the first half of this year, which I think all of us suffer a lot from really high, high price. There are other things, including, I think, as we streamline the acquisition, it doesn't mean that we don't do business on the low end. It's just, you know, when we try to expand, we expand more mid to high and more on the acquisition and also ARPU uplift. With that, then we can also control part of the acquisition cost as well, and also the churn, because a lot of time it's coming in, but it's high churn.
When you churn, then there's also need to write off and, you know, other things. I think those are some of the things that we try to optimize towards the second half of this year.
The last question on network OpEx. Because we are basically roaming on TOT 2100 MHz, so traffic depending on the quarters, may goes up and down, and that will sync with both the revenue line and cost line, but the net payment to NT has remained the same.
Understood. This is helpful. Thank you.
Hi, can you hear me?
Yes,
Okay. I have a few questions, follow-up question on the marketing expense. You managed to cut marketing expense quite aggressively. Can you tell us the rough breakdown of marketing expense right now? How much is advertising? How much is either event or customer acquisition costs or the dealer commission? That's the first question. Secondly, you mentioned that the amount of marketing expense may go up seasonally in the second half. How about beyond the second half? If you look at absolute amount, the total SG&A of yours right now is much lower than your competitor. The third question, do you think the market consolidation has helped you to reduce the marketing expense? Thank you. Three questions.
unfortunately, I don't think we can provide the breakdown of the marketing, but what we can say is that this year, we definitely try to optimize a lot of area. We keep tight control. Part of it, yes, the environment of the market may help us, but we also bear in mind that second quarter, third quarter is also a low season. When the fourth quarter comes in, we still expect some seasonal spend. Second quarter, third quarter, as we optimize and it's seasonal, so advertising or some of the campaigns we can limit.
I think the important ones, like, the retention for the customers or how we give incentives to the dealers toward the same strategy of quality acquisition rather than just the acquisition of numbers, those are the budget that we intend to keep to deliver the top line.
Right. could block up, if you cannot tell us the breakdown, can you tell us what is in there? It is advertising, right? Customer retention, dealer incentive. Is the handset subsidy included in marketing?
Yes. Yes, handset subsidy also include, and we have also controlled the subsidy, in the first half.
Right. Okay. Okay, thank you. Then, I shouldn't be worried about the fact that the absolute amount is much lower than your peer, right? I mean, are we going to see you ramp up the marketing expense when the economy is back on track, maybe next year, 2025?
It's really depending on the demand and the markets and seasonal copy. The, the absolute amount is actually reflect that and the dynamic in competition as well. Now, literally in Thailand, there are only two, so less of aggressiveness in the distribution, less of aggressiveness in the acquisition. I, I don't know whether they're qualified to say or not, but basically, it's also part of the help as well.
Right. Okay, that's true. Kap, thank you very much.
Yeah, I think what, what I try to, to add is, typically we already spend much lower in terms of percentage compared to our competitor, so it doesn't mean that we need to go up to that level, if we can still be effective. Hopefully you don't just compare our spending in terms of percentage and then think that we need to compete by upping the level to be the same as theirs.
Right. Thank you, Kap.
Hi, we have Thapana from Daiwa, Ka.
My question's already been asked, so I don't have further questions. Thank you.
Is there other questions from the floor? We still have some times left. Piyush, please.
Yeah, hi. Thanks. Just as a follow-up on, on the mobile side, could you help us understand what is the customer acquisition cost for, for every subscriber addition in the mobile? Because if, if we are focusing towards quality subscribers, you know, that cost element will obviously keep be in control, right? Just want to understand what's, what's that per subscriber cost. Can you also talk about your interest cost has increased, so, you know, how, how should we think about it going forward?
On mobile acquisition costs, this has to do a lot with actually the level of ARPU or subscriber that we are getting and how long they can stay with us. As I think we try to mention in this call, is that the quality acquisition is really important for us so that we can manage the incentives, the distribution to the customer a lot better. It doesn't mean that... Not necessarily that we will cut all the costs, but we can more efficiently divert the acquisition costs through the retention, so we can keep the higher ARPU longer, and therefore it doesn't create a constant transition of the subscriber to us.
Yeah, that, that's actually a better word, the quality subscribers, better than what I use, mid to high. Anyway, it's, it's hard to really give you an average acquisition cost per sub on mobile, because it comes in first, different type of ARPUs, pre, post, you know, and, and whether it's going to come with, handset subsidy or not. A lot of time we, we play with, you know, different factors, to get to the renewal amount that we would like to, to have. It depends on, you know, the trend in the market as well, what works and what doesn't work.
A lot of time, we need to adjust this incentive so that, you know, our dealers and, you know, sales adjust to focus on the right, the right segment that we want to, to focus on.
... Interest cost, we recently issued a new debenture, and as the market rate is still basically higher than our average rate, so it's inched, inches up a little bit. Ongoing, I think post-acquisition of 3BB, we will be fully funded that portion. We also continue to expect the market rate to be higher than our current average, so that will continue to maybe inch up a bit.
Got it. Thanks a lot.
Yes, we have Hussaini follow-up questions, please.
Yeah, thanks again. Just on the revenue market share, now, as your competitors will be busy integrating the network, do AIS still see room for market share increase in the coming quarters yes? Do you see that market share here as likely to remain stable?
I don't think we are able to say, you know, whether we will increase our revenue market share, because I think this will be quite dynamic. Even as our... Even as the other side of the industry rebuilds their network, I don't think they will stay idle and let us take away customers. Definitely there'll be some response. I think what we hope to see is that the overall pie, the mobile industry, grows so that it's better for everybody. Yeah.
Understood. This is clear. Thank you very much.
if there's, Is there other questions from the floor, please?
Yes, I, I have 1 follow-up question. This is Wasu from Maybank. The question is about Triple T Broadband. Since Triple T has a lot of net losses in the first and probably in the second quarter as well, should we be concerned about the loss, the, the net losses from Triple T dragging AIS performance going forward?
I think going forward, if, if we get to acquire, then there's, there's way to, to solve the net losses through synergies and other optimization. In the short term, we'll see. I think let, let's wait with the, I think, the, the judge if meeting, will, will get to what resolution. I think it's too early to say. When we, when we look at the deal, way back earlier, we, we did figure out a way to, to get the synergies coming back up, but it, it takes a bit of time. That's all I can say.
Okay. Thank you, Khun Tee.
We have message from the chat box, Wong Chen Yao from Areca Capital. He would like comments on any tower sales, given industry is consolidated and mobile penetration is 150%, and infra network is not a competitive advantage.
I think we, we used to mention that we have kind of undergone some studies on, on this. For now, it's not in the right environment to do monetization. We still can tap into other funding options with more effective cost. Plus, I think there are still certain value to, to, you know, control the asset. When the right time comes, I think that that will be an option that we, we look at for sure. CapEx.
Thank you very much, Ka. Before we end this session, please allow us to update the previously communicated analyst meeting on the 22nd August. It is now postponed and will be update, providing the investment committee with the updates due course, Ka. Thank you everyone for participating, and see you again next quarter, Ka. Thank you.
Thank you. Bye.
Thank you, Ka. Thank you, Ka.
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