I would like to start our second session. Good afternoon, all distinguished guests, and I would like to welcome you to the analyst meeting session for AIS, Advanced Info Service Public Company Limited. I would like to introduce to you the executives who are here with us today. The first one is Mr. Somchai Lertsutiwong, the Chief Executive Officer. Also Mr. Tee Seeumpornroj, the Chief Financial Officer. For this session will be divided into three parts. The first one is on bringing cognitive technology forward by Mr. Somchai, and the second one is the building sustainable profitability to be presented by Mr. Tee. After that, we will go into the Q&A session.
Please feel free to raise your hand if you have any questions, and we will bring the microphone to you, or you can also scan the QR code to leave us the questions beforehand. I will read out the questions to the executives. Without further ado, I would like to invite Mr. Somchai Lertsutiwong to take the floor and start the first session.
Good afternoon, all analysts, investors, and distinguished guests. I am myself and Mr. Tee Seeumpornroj. We are going to speak briefly and shortly about AIS, and also we're gonna touch upon the two topics on the moving forwcrard Cognitive Tech-Co and what it entails. Mr. Tee Seeumpornroj will be talking about the sustainability on how we can distribute the profit to investors and analysts from our business Cognitive Tech-Co for my topic, it has not.
There has not been much change in terms of converting AIS into the digital life service provider. We try to create more value based on the core business, which is the core mobile of AIS. We are going to be strengthening our core business as portrayed to the investors and analysts for a number of times before. We are going to still focus on our core business, but we will have another pillar, which is to start the new growth engine, which is the Fixed Broadband and Enterprise, and also in the near future, we are going to move forward into investing for digital life service. These are the three pillars that we have mentioned earlier. What does it have to do with being the cognitive telco? In simpler terms, I would like to.
In the future, apart from these three pillars, we will have to add two more, which is the IT and Networking. IT and Networking that are existing have to be strengthened and adjusted, and the network will have to be developed, and we have to have the Autonomous Network. IT will have to be Intelligent IT, so that we will enable the use of data analytics or AI as efficiently as possible. This is the first part that we are laying down the foundation to ensure that these two will be the foundation of the three pillars. Secondly, in terms of our operation, in our internal operation, we are working in terms of 5G operating model, and that is we are going to adjust our operation internally to increase the efficiency and reduce the cost of operation.
Originally, when we used to work offline, we used to work manually, we used to have call centers. In the future, all these conventional ways of doing business, the high cost is very high, and also the human resources that are required are also high as well. If we have the autonomous network and intelligent IT system, we will be able to serve the clients and customers on the online basis. These are the two foundations, two parts of the foundation that we have to enhance and strengthen in order to enable us to complete the three pillars, which will lead us to eventually being the cognitive telco.
In the first half of the year, in a short-term perspective, what we would like to do for these three pillars is first one is the mobile business, which is our core business. As you have seen that as you may be aware that we are, we are very competing very aggressively in the market. AIS is we are going to be the leader to uplift the ARPU , the average revenue per user, but we're not increasing the price unreasonably. We are confident that we are the strong leader in this facet. In at present, the network quality for AIS. We can see like the much higher difference now. With the offer of packages that AIS are offering right now, this will also affect our competitors as well.
We are going to use, uplift the ARPU by using 5G adoption. 5G handsets are now the price per handset have reduced, and this will also encourage people to use 5G even more. More people apply for 5G, basically. Apart from the network quality, which is our core business, we will also focus on intelligent network and Autonomous Network. This will enable us to personalize our service. We will have to work on this in order to ensure that our customers will be satisfied with the service that are tailored or catered to their demands. Service is still the core, is the heart of AIS. We will also strengthen our loyalty program as well.
As I have mentioned that we are the leader of loyalty program, whether in terms of privilege, points, ecosystem, and so on and so forth. We are now seeing more competitors, and they have better ecosystem, but we're going to improve on that. The second half of the year we will co-collaborate with KTB and so on and so forth to make a difference in terms of customer experience. For Fixed Broadband itself, we are focusing on this pillar, and we are successful. We are going to enhance the quality of Fixed Broadband to be even better. For AIS Fiber, we are expanding, we are accelerating our investment. At the same time, we have to make it to offer premium quality service as well.
I believe that we will rank number three among the top three towards the end of this year. I'm not mentioning the merger with 3BB, because we have to wait for the approval of the NBTC and also the shareholders of 3BB as well. In our conventional operation, we're going to expand and invest more in our service provision. We are going to offer more contents, more service to upsell and cross-sale for our consumers as well. This will enable us to step up as the leader faster than our organic growth. This will also depend on the approval. With the acquisition of 3BB, this will also depend on the approval of the NBTC.
For the E nterprise business, even though we may be new in this industry, but we are growing stronger. We can see that there are more than 30% growth every year, even though our client base may be small, but it is growing. In terms of ICT or Enterprise, the opportunities in the markets are very high in number, but we would like to focus on things that we have a specialty. We want to focus on new technology, whether it is the cloud technology, the cybersecurity, IoT, ICT solutions. In the facet that we are interested in or more particularly the 5G vertical solution that we can actually work on, but we're not going to focus broadly on ICT solutions because we have so many competitors and there are so many solutions available.
The last one is a data center that we are going to invest alongside Gulf. Also, we will have a clearer picture towards the end of this year. These are the things that we would like to expand in terms of our Enterprise business. If we're successful in this effort, we will be the solution provider that is very strong because we have everything on our hands. Some of the competitors, they may be good at the solution in terms of ICT, but they may not have the infrastructure for other services, for example. We can provide end-to-end solution to our consumers. This is something that we are working on. Also what proves that we are now heading towards the right direction is that we...
Over the last few years, we have partnered with Microsoft, and we have been voted by Microsoft itself that we are the best partner of the year in Thailand, because we saw so many customers. We have increased number of customers, and we also invested in the human resources within our organization to equip them with the knowledge. Microsoft supported us in terms of the human resources as well. They can see that our people has very high capacity, and this is a guarantee that everything that we will provide in terms of the Enterprise business, we have so many opportunities. We have to build up a team that is stronger, and we have to be able to deliver what we promise and deliver in what we have expertise. We focus on quality and not quantity.
What I would like to add is the digital service. You may have heard about digital service from AIS, but not so, not quite tangible. What I would like to mention today is that we are working on digital service as a step-by-step process, and we were cooperating with our partners. For digital service, the income will start to be recognized as soon as the product has been launched and the users have respond to those products. We're not going to spend so much cost investing in digital service because we can see that a number of service provider invested huge amount of money in the digital business, but they cannot offset that cost by the profit. The plus side on this is that we can control the cost.
Once the product has been taken off, then we will invest further. We can see that the strategy and the approach of AIS will be different from other brands. We want to ensure that the way that we invest like this will enable us to do it sustainably. For example, when we join in SCB, we have already joined SCB in investing as well, but we are doing it gradually. We are doing it step by step and taking a careful approach. When we think we're ready, we will launch the product, and when the product takes off, we will invest further. We take this approach when we work with a number of partners. For example, with our insurance partner, we issue new products. These products allow or provide more options to our consumers.
If they drive a car but not quite frequently, then they can pay less for the insurance premium, and the insurance premium can reflect the nature of their vehicle utilization, for example. We're not doing the market dumping. We study the market, and we try to offer the best service because if we invest too much cost but we are not offering the best service, then probably this is not the optimum way to do business, and this is the ecosystem of our digital service that we would like to take. To summarize, that we would like to follow these three pillars. We would like to continue growth. We want to ensure that we will make profit. At the same time, we want to, as I have mentioned earlier, that we focus on the dividend company.
When we operate, even though we have to do new things, but we like to maintain the cost and also maintain better performance, and also these are the things that we focus on. All of these based on the three pillars. This is the pillars on being Cognitive Tech-Co. The first one is customers, employees, and shareholders, and AIS have been based on these three pillars from the start. With the move towards being Cognitive Tech-Co, we are going to be focusing on customers first, but our customers will have to have experience that are catered to their personality. Employees have been changed to colleagues because in this ecosystem that we are moving forward, the digital ecosystem, apart from our employees, the partners are also going to be a very important element.
We need to ensure that our colleagues trust each other, can work with each other. You will see new investments, new joint ventures with a number of our partners as well. Most importantly, since we are a dividend company that have, as I have mentioned earlier, shareholders are our supporter, we still have a commitment towards our shareholders, and we have to maintain what we have promised to our shareholders as much as possible. These are the three elements of our purpose and passion. Whether as a service provider, as Cognitive Tech-Co, all of these services will be based on these three pillars.
I would like to finish here, and Khun Tee will speak about sustainability, about our core business, and he will shine the light on how we can work on these three pillars, what would be the profit margin of these three pillars. Khun Tee, the floor is yours.
Good afternoon, everyone. I'm glad to see you in person after not being able to do so for so long. I understand that in the past 2-3 years, there are many events that we had to go through, whether it's in our industry or just the economy in general, and people started asking questions about our profits, can we grow, for example? We are trying our best to ensure that everything is improving and developing in the right direction. In terms of the profit margin, we are trying to ensure as best that our stakeholders will be receiving the best benefits of investing in us. For the future, we will be looking at our growth in more diverse perspectives because we've gone through 2G, 3G to 4G, and now it's 5G.
We can see a clearer image of the trends of growth in the mobile industry. At the moment, like the mobile communication rate is 140% already, so we need to have more products and services. Of course, different services will have different projected profit margins, and analysts will always ask like, "Okay, so which is the one will give us the most profit?" If we're going to be honest, we will have to manage each service individually, and have to look at the markets where there is the greatest potential of growth. We will have to keep a close eye on all our services, and we'll try our best. Another thing is we will need to build more efficiency with cost optimization.
There are a lot of things that came in the past few years, like 5G spectrum network. There's both intended and unintended costs that came with them, but we've been able to manage it quite well, in my opinion. It might take some time to recover from some of the things that we've gone through. We're now in a new cycle of 5G. We're trying to manage it the best, and some unintended costs and spends is like the electricity bills that we're going to have to pay because it's increased this year. We have to look at how we can invest to ensure that we receive the most beneficial returns. This is what we've been trying to keep a close eye on and trying to manage properly with the past couple of years.
Finally, we also have to find new growth, more something that's more exciting through acquisitions. As we've mentioned, we looked at companies that could help supplement and improve our growth, and can also help us in a more broader sense, and also help investors and the public at the same time. That's the acquisition of 3BB and JASIF. I'll touch on that maybe towards the end. I would like to ask the analysts, if you have the chance, I would like you to also share this information. Because a lot of investors, they don't really understand, for example, with JASIF, they don't know what's happening in the industry, what the competition is like, what the landscape is, and how, for example, would 3BB will help us strengthen our services, and can JASIF do the same?
There's still a lot of misunderstanding in the investor side, so if you can help us share that information, that would be great. We believe that AIS has been giving out adequate information on this. If you have the opportunities to further educate the general population, that would be great. That might have been quite a long introduction, but I would like to get into the meat of my content. First, if we look at our mobile arm services, it's our majority revenue. About 88% is from the consumer side. Of course, in consumers, there's a very high competition. We already know that. Especially in the past year with all the macroeconomics and all the other situations, there's going to be a lot of competition in terms of the price.
I just wanna show that our EBITDA margin is still at 45%-50%. If you look at the pricing, the Enterprise side might be more stable, but overall, it's still a very healthy margin that we have. Now, the other arm is the Fixed Broadband. Of course, this is another place where pricing is very competitive. AIS Fibre is about 7.5%. The market for broadband is growing. There's high competition. But since we benefit from using the shared networks, our costs are at an advantage when compared to our competitors. Our product offerings, if we can do Fixed-Mobile Convergence, there's a lot of interesting opportunities that we can use. Our EBITDA margins is still healthy.
It's not as great as our mobile arm, but it's still good, and there's still room for improvement. I guess, like you can see here, it's about 35%-40%. The Enterprise businesses, the 3.9% is the non-mobile that we're talking about. There are things like EDS and the CCID that we're going to be talking about later. The margins really depend on what type of service we're looking at. If it's ICT projects or trading projects, for example, things like systems integrations, it's in the high single digits for the gross margin. We have to maybe bundle this or combine this with other services to ensure that it's still in healthy state.
For the recurring services, there are things like, we can help manage things for our clients. At the moment, our recurring services cover about 10%-15%, early teens. As for the other services, there we have our own services, and I think that's over 20%. There's a lower profit, lower gross margin. Sure, but it's new. It's a new channel, new revenue channel. Because if you look at the margins, the margins might be down, but the total revenue is increased. That's why I said we have to look at the specific services and because of the structure, the cost and returns are different for each type of service. Another thing is that is just focus, this is non-mobile.
The mobile part, we're already accessing about 70% of the enterprises, and we are still always looking at ways to expand that reach. Our final arm is the digital services. What we want to do is to create unique and distinguishable services that have their own niches. We really want to be. We really want to stand out in these areas. For example, things like insurance that was brought up earlier in the previous session. Because if we are able to continue our insurance services to full force, we don't have to like, so much contact to the call centers. We don't have to do the evaluation of vehicles. We can do all, everything just through our mobile phones.
Take a photo of our vehicles and send there, and then the next day they will send you a contract to review. The benefit is that if you look at the insurance premiums, when you compare that to traditional providers, it's about 40%-50% lower. We're really going to see this in more action in the second half of the year. This is where we're going to really use the feedback that we got in the first half to improve our processes, because of course, it's going to be our selling point is done digitally, it's on the mobile, but we also have to have a clear benefit for the consumer and a clear selling point.
When we look at the other types of services, if we are able to have more contributions into different types of products, I think they can also be some more additional revenue for us. At the moment, I wouldn't want to put all my eggs in one basket. We'll wait to see how it goes in the next six months. Now, next is about cost efficiency, as we mentioned, and how to optimize that. We've seen that we've had to weather the storm in the past two years with COVID. Trading sales it has been stop and go. The way we had to manage our costs has been very intensive and very challenging in the past two years.
Like I said, this is early in the 5G cycle, so when we have to improve all the infrastructure, all the systems, there's a lot of costs, and especially with the electricity bills, the electricity costs, especially this year, where they're going to increase the price of electricity, there's going to be some unavoidable costs. We expect that we are going to be able to manage it better going forward because there are going to be more things that we can control now that the worst is hopefully behind us. If you look at things like things we can do, things that we have been doing are things like energy savings, things like the internal process digitalization and also planning, optimizing our CapEx.
If you look at the 5G, of course, there's a lot of initial cost and next, how we recoup that depends on our strategy going forward. Today, most of the mobile phones in the country are still running on 4G. If you look at the data traffic growth in Thailand, I think there's about a 20% growth. So it's going to take up our network capacity, and we have to invest more to make sure that we can still provide the service. In doing this, we have to optimize it to make sure that we are being as cost-efficient as possible.
Another thing, other things are things like service centers that we are trying to optimize, whether it's the resources that we use for these centers to reduce the costs as much as possible and still provide the best experience that we can and still improve on our experience as well. I believe that in the future, there are two key themes that we are going to focus on. First is the automation of the network. If we can do that, there's going to be a significant investment. But overall, in the long run, it's going to reduce cost significantly as well. It can also provide a better optimized and personalized service for our consumers.
In the next, in the coming months, we're going to have to upgrade our software and hardware, and if we complete that process, we are sure that the user experience will change, will be better. The second model is we're going to think about new ways to engage with our clients to have new engagement models. First is about the physical side of it, because I feel the market currently is split in two. There are consumers that are around the age of most people in this room. They still like physical interactions. There's a high-touch economy. Then there's a new group, the younger generation, they like high technology instead. It's more contactless.
We have to try to reinvent our engagement or models to balance, our users and their experiences with our services. Because, in the past, we were giving just a broad services to everyone. In the future, it'll be more clear what type of specific personalized services we provide to the specific groups of people. This is what we're going to see in maybe the next year or two, and it will also help optimize our operations and the cost of operations subsequently. Next, when we look at the business landscape, in the Fixed Broadband competition, there's just, definitely going to be more demand. In the past, there were some challenges because, since this was an area of fertile ground for growth, everyone was competing, trying to get into this market.
If you look at the number of total subscribers, of course, it's increased. But for us, since we're challengers, we're newcomers into this area, we might get 20%, but others who have been there incumbents in this market might find it more difficult to grow. We can see that some operators can still compete, for example, us, because our ARPU, A-R-P-U, is improving every year. At the moment, the good ARPU is about THB 400 or lower than that. What we need to do or what we have been doing in the past two years is try to reduce the cost to the customer as much as possible. At the moment, initially everybody expected that the ARPU was about THB 600, but standard, but now it has to go down to about THB 400 or 450.
That's what we've done is we've talked to all the vendors or subcontractors to get that price down. We can see that some other operators can't do that. They can't reduce those prices. I'm sure some of you only invest in the funds. They don't know. You might not know about what's going on in the business side, but we just want to show you that for some operators, this is actually public info, you can refer to it, but the cash cost for it is about THB 600. If you look at the ARPU today, that is at, ARPU is at THB 400 and 450, then of course we will have that advantage.
If we go to track the actual consumers, the subscribers to the broadband, for example, if you look at 3BB, they have 2 subscriber statistics. They have about 3 million subscribers. That's the total subs. That's about 3 million. The actual paying subs are about only 2 million. If you look at our statistics, 3BB's statistics are actually lower than ours and TrueOnline because their cost, their initial pricing is still high. It's still that THB 600. They can't compete with our THB 450 prices. In the future, we'll have to look at how we can compete at the pricing. We have to find a balance because if it goes low, then there's not going to be enough cash in hand for us.
With each new acquisition, it needs to be at least THB 3,000-THB 5,000. Of course, it's about THB 450, THB 500, THB 600 per month. I bring this up because if investors aren't looking at this closely, they're like, "Oh, why is AIS bullying the other operators by providing such competitive prices?" You might have to actually go into the details and look at the pricing, the pricing in the previous years as well. Like I said, I bring this up because I talked to a lot of investors in the past couple of years, and they were looking at the funds. They only purchase the software. They don't look at the workings, the in and outs of actual business operations, so they don't understand why these changes happen.
I think that's very important. Finally, we have to look at the cash flow for these businesses, whether it's enough. If you look at the differences between two years ago and today, there's a significant change. Finally, we still believe that what we are offering or what we are trying to restructure is to create win-win solutions. Because what we have to do is we have to look at whether if we don't change anything, is it sustainable? Can we still continue this business model? If it can't, of course, we have to change it.
We do believe that if we do the restructuring, it will have many positive results like the increased sales and services channels, especially consumers in the provinces, the rural areas, they can receive better coverage and better services. There are also things like the network footprint at the moment. If we look at the national level overall, it's already increasing in Bangkok. The problem is there are still a lot of cables everywhere. It's not really optimizing the country's investment. If you look at 3BB, they're still considered trusted brand, especially in the provincial level.
The acquisition of 3BB is beneficial because we receive that trust as well to continue our services in the provinces and, but anyway, we still have to look at the future and whether the business models will be sustainable. As for the investment, we also want to provide better yields than we see today for our investors. If everything goes to plan, we also believe that it can reduce the risks of conducting business. It also makes the risk lower for our sponsors, and it will. In the end, it will make the business stronger. People who want to invest in funds or in stocks will find it more attractive. In the end, I believe that the benefits will. It will truly benefit the investors themselves in the end.
My concern is that if the investors they are missing some information or they make decisions without without all the information, then they might have a negative view on the company. If we look at the potential asset injection, like I mentioned, a lot of the cables that we have existing, especially the 3BB cables, we can continue to do that, in like piecemeal. We can do small chunks. We don't have to. At the moment, the profit it's still enough to provide dividends for the shareholders at an acceptable rate. At the moment, if we can raise smaller funds in smaller chunks for the funds in there, it's also going to be beneficial for us and for the investors overall. Also we are going to
We're not just looking at increasing the yields, but also ensuring that it's going to be able to be available in the long term. For example, in the future, when you have more assets and the funds will grow without having to increase the size of the funds too much, and it can self-sustain itself, I think that is a more sustainable way to conduct our business in this aspect. I think in the end, this was all for to create a win-win solution for us, for our investors to increase our scale. Then the shareholders will get good returns. These traders will get good returns as well. I think that will be the end of my session. Thank you very much.
Thank you very much, the two executives, for your presentation. Next, we're going into the Q&A session. Thank you very much.
This is Thitithep from KKPS. I have four questions. First one is that we are now lifting the lockdown, but the mobile phone sector is not similar to mobile phone sectors in other countries and other economic sectors of Thailand. We have not seen any recovery in the second quarter. For mobile phone in other countries, I think that they are now on the positive for a number of quarters now. If we look at Thailand, for example, retail and restaurant chains, restaurant business, they are now on the positive side. I would like to ask in terms of what is slowing us down in terms of our recovery comparing to other countries and also other sectors in Thailand.
The second question is, when I looked at dtac and True and their merger, I think there is a cost redundancy. Quite a high cost redundancy in terms of network marketing and administration. But when I look at the advanced Fixed Broadband and JAS and JASIF, cost redundancy may not be as high as True and dtac, but I think that we are more quite heavier in terms of human resources. Please confirm if this is a correct understanding. The third question is the potential asset injection at fiber and also the JASIF. I believe that this is the character here is quite different from character in other countries. They are more active. They're not as passive as you are. There are, you know, creation of new assets and acquiring REIT, which will assist in offloading the CapEx.
When they are merging with REIT, the parent company will be lighter, of course. I'm not sure if this concept is possible or feasible in Thailand. I'm not sure if there is any regulations barring this kind of exercise. Also, I'm not sure if you have heard this question before. Allow me to ask again, that if the shareholders of JASIF would like to, what would be the three options? The first one is to go ahead because it's beneficial for us. The second one is to negotiate the price. The third one is to pull out completely. These are the four questions. Thank you. Well, I would like to answer the first two. The first one is, it is because the competition that is very aggressive to the point of unreasonableness. Because the second competitor would like to have higher market share.
The utilization is significantly higher. The usage goes, like, 20%-30% every year higher, but the this should be distributed across the industry if we are competing fairly. This is the main reason. You can see that the unlimited package are very cheap, unlimited data, fixed speed, they are very cheap. They used to be at 4 Mbps, now it's 10 Mbps unlimited at a very cheap price. This is why the raising the revenue is very difficult. This is one of the reasons why the second half of this year, we are going to lead in terms of we're not going to reduce the price. We're not going to dump the price in order to acquire market share, because this is our signal that we are trying to send, that this is not a healthy competition.
Also, if it is reasonable, they should be able to recognize or realize that this is the opportunity for every business operators. If we are competing fairly, everyone will get the benefits, and we can see and the sector should be recovered right now. Now we are facing unreasonable battle. Because, you know, people will just keep changing their packages, keep changing the offers in order to get the cheaper price, and it's not healthy for the industry. We hope that towards the second half of the year, the situation will be better. The second question, of course, the synergy between True and dtac, there is a cost redundancy, network cost, and so on and so forth. But for the 3BB, there may not be as high cost redundancy. But there are two, at least two, cost, which is CapEx in the expansion of businesses.
To prevent the overlapping of CapEx, this will help us in terms of saving the cost redundancy and also by scale, if we. It may take about 4-5 years in order for us to increase. What's more important that it may not be realized by investors is that the synergy, like the defensive value that we may not realize. For example, the 3BB broadband clients that are existing, if half of them or 50% of them are using mobile of the other operator, we can do the mobile bundling. This is to enhance or to initiate upsell and cross-sell. This is the cost synergy that we can approach that we can take. I would like to just add that there is certain level of cost synergy.
It may not be as high as True and dtac, because we can see that cost in True and dtac, one side has not invested for a while the other side has been continuously investing. With the network in order to have the network coverage, and also we can see that the growth in the utilization as well. The scale here, it will be different. For us, this CapEx is one thing that I have mentioned, but the operation cost that we can see, there are a few of them that is very evident. For example, the cost for one new client, it will be about THB 3,000-THB 5,000 if you include the network that we have to invest in. This cannot be eliminated, but it can be optimized.
We will have the business model that 3BB may be relying on insource, but we are relying on outsource, for example. This is something that we have to discuss and adjust. In terms of the purchasing power, as I have mentioned, 2 million and 2.4 million in total, about 4.4 million-ish. I think vendors, this is quite optimum for vendors. Basically, you know, if you work with AIS, you will get paid, you will get the money. But this is something that I think we can take, the approach we can take, and what we have estimated as well. I would like to answer your fourth question first.
If the shareholders did not approve to accept what we would like to offer, I would say that the deal will not go off as easily as planned, because according to the structure, for example, the cash cost. If you would like to get more information on this, I can give you more insights. The orange part, as you can see here, these are the rental fee. I divided this per capita so that you can see the data more clearly. Between 2019- 2020, the cost goes up from THB 225- THB 372. In the operational expenses, we try to reduce this, and you can see that there is a reduction from THB 300, which is reduced to THB 256.
The overall cost is up, which is on the contrary with the ARPU which is up. That's why it's very difficult. There are the disadvantage. If the ARPU cannot be reduced, I don't think that I need to forecast this. Analysts can forecast by yourselves about how the situation may go. We can see this trend from 2019. At first, we think that the ARPU on average would be at about THB 600, but when we see the trend, and with the two-year forecast, we adjusted the cost from then. Over the last two years, we have been adjusting the cost in order to reduce the cost. If the ARPU is down, then the cost is down, then we're fine. If
In a situation where the worst situation that you can do business is that you receive less revenue per unit, but you cannot manage the cost per unit to reflect the money that you receive. Basically, if you analysts have analyzed this data, I can provide you with more information that you can work on to the benefit of your investors. On REIT, in other countries, I believe that there will be the intermediary that will build the infrastructure, and many operators will be using the same infrastructure. It is the proactive approach. You can basically construct assets, you can own it, and you can allow people to utilize the asset, which is not the same in Thailand, because in Thailand, we are quite reactive.
The reason why is that for Thailand, for mobile businesses, I would say that we do not have enough spectrum. The 2-3 operators that we can see, when they have higher traffic, they have to expand. With more spectrum, they will be able to accommodate more clients. Comparing Thailand to other countries, we have more spectrum. When we are adjusting or moving forward to 5G, we do not need so much work in terms of splitting the spectrum. Each of the operators, they have quite to a certain extent the sites. They may have to rent some more, but not so much. In terms of the future prospect, if there's more spectrum and you need a slot.
For example, we are using up all three slots that we have because we have 700, 900 each. Each are using one slots, and we have 1800 and another to 2600. If there is a new brand using the 3500 slot, instead of setting up the new cell tower, we can cooperate and share the infrastructure with other countries. Oh, sorry, with other operators. There is the cell tower on one side and a fiber on one side. In order to share between the two, it's quite difficult. That's why for JASIF. With the higher traffic, we would need the cell tower. People are now starting to fiberize. Thank you very much.
This is Pisut from KTAM. I have three questions. The first one is for JASIF and 3BB.
As Khun Tee has mentioned that now they're burning cash. The question is, since we see that they are burning cash, and we are trying to depress the ARPU, why are we purchasing this business? We can just, you know, let them burn the cash and collapse, and we can just acquire the clients, basically, the subscribers. 3BB and JASIF, are they bundling or not bundling? By bundling, do you mean if you are not buying JASIF, you are not buying 3BB? If it's unbundled, if JASIF voted no or on the no-rent basis, we are not going to buy JASIF, but you're going to buy 3BB anyway. Are we having the power to negotiate or is it with the seller? Another question is, this is if I am personally...
If I am the JASIF shareholder, I would vote yes on everything apart from the rent discount. If all the shareholders take the same approach, by way of, they vote yes on everything and they vote no on the rental discount, what would be the process? Are you going to take that to the board of directors to decide, or what would be the approach? If you are going to continue with the deal, you mean that you are going to purchase anyway with the same rent that they have not been willing to give us a discount, or what would be the approach? What would be the fair value?
Last part of the first question is what would happen after 2032. If they do not reduce the rent, and we do not renew the contract, and what would happen in 2037 if they reduce the rent and we renew the contract? Thank you. That's a very tough question. From our perspective, I think if we can merge with them today, it would be beneficial for all parties involved. But if we just let a company collapse, sometimes it's very difficult to acquire or to bring them to the status that are optimum. I think that we are now at the right balance where we are okay with the value or at the estimate. It's not too cheap. It's not too expensive. It's a balanced price. And if and we.
Basically, if we have to find the same amount of customers, what would be the cost of seeking those customers? From my perspective, I think it is a bundle. It's a bundle from the side of the seller. For example, if we only purchase 3BB and leave JASIF, if I am the unitholder of the fund of JASIF, then I will be quite concerned because I know full well that the asset is now lower than the value. If we look at the long run, if we can create the normal cycle of OpCo and AssetCo, then it would be beneficial. We can see that among, like, for example, CPM, USA, OpCo are doing business to a certain extent that they have an optimum asset.
They can put that asset into the fund, and then when they receive the cash, they will use the cash to expand their business to acquire more asset, and then the asset will go into the fund, and it will take this kind of cycle. If you put the asset into the fund, but that's not working, then it means that this cycle is not working for you. If you put the asset into the fund, but somehow the asset value has dropped, then it means that your cycle is not working. The acquisition will come along with a number of package. For example, we can further the business, we can take the clients. If we can have 3BB capacity to basically assist us in providing the coverage of the fiber business, for example.
The new service that will happen in the household will be, will have a high opportunity of succeeding as well. If you're going to build the infrastructure by yourself, then you have to basically lease the land and starting from scratch. If you are buying something that they have the asset already, then you don't have to invest as much. If the fund does not agree on voting on the rent, then I would say that it will be very difficult. Because if you want to change anything, you have to start over from the very beginning. What we have deliberated is that the shareholders have been analyzed fully, and the board itself has analyzed everything as well. We think that this is the most beneficial choices for everyone.
As I have mentioned that if we adjusted the commercial expense to the fair value, whether or not we will re-renew the contract, if it's fair, if we are making profit, there is a reason or justification for us to renew the contract. If it's not fair, if we're not making profit. As there are two portions, the 80% portion at THB 400 and 20%, 60% at 20, at THB 700, for example. If the unitholders do not understand. Because it is not a straightforward relationship. Basically, if you purchase the core, and you sell that you per person to at the price of, you know, THB 400-THB 600, but it means like you are using the Mercedes-Benz as a taxi. It's not going to pay off.
Because if you use Mercedes-Benz as a taxi, then you just, your business will just collapse. If you estimate the value of a Toyota comparing to Mercedes-Benz, and then you use it as a taxi driver and everybody's driving a taxi now, then basically you're competing with too many competitors, and your business will not just work out.
There's another thing that we want to talk about the fiber optic lines. Right now it's very easy just to set up these connections, especially in the provinces. At the moment, what we need to do is to ensure that people, our shareholders for our 3BB have the confidence in this acquisition that we will be still using their infrastructure, that we will be still using their systems instead of just building our own. I think that depends on the conditions that we set for the acquisition.
At the moment, we're still in a lot of discussions, and like, you mentioned, they are also concerned about 2032. Because they assume that when they get there, they will receive an extension of the contract, and they assume that it will be under the same conditions without looking at whether it's going to be competitive or not. They don't even think about. Will they even exist in 2032? And if they do, are they going to extend the contract at just the same rate? Will it still be competitive then? For example, if you look at examples at True, they're renting at THB 350 right now, right? And it's a fixed rate. It's not going to increase.
That's why I wanted to reiterate that we need people to provide this type of information to investors so that they can decide with confidence that they know all the facts. Like, things like the sizing of the commitment, the cash flow. At the moment, the cash flow that is higher than in the past, much higher. With the different changes, we need to provide investors with enough information to decide what they want to do. At the moment, I get the feeling that they're not really looking at the details enough. They think that, "Oh, it's going to be okay. Don't worry about it." I ask you in this room, like, what do you think? What concerns do you have?
Today, the best we can do is set conditions that we can extend the contract value so that the price per unit or the return per unit will be as valuable as it is now. Of course, in the future, we can always look at ways to improve the quality of the service and the return. Oh, thank you, Khun Tee, very much. Another question is, if you look at the market in Thailand, the household fiber market, if we acquire 3BB and all the things that are depressing the ARPU right now will improve the condition? Will this business go back to the same heights as it used to be?
If we are successful in this acquisition, our competitors, True and dtac, what do you with their plans, what do you think the landscape will be like in the future, whether it's the mobile or the fiber, fixed fiber market? What do you think it would look like? Because if you look at the competition now, is it better for the consumers or is it better for us? If we look at it, look at the principles, if we are able to merge with 3BB, I believe that the competition will go down. There'll be less competition. At the moment, there's the 50% discount for people to switch operators. I don't think that's going to be a promotion that lasts long because we don't want people to keep switching back and forth.
However, I believe that in the overall, the market for this business will be better. As for your question about if we can acquire 3BB and our competitors don't, of course, we will be in a stronger position because at the moment, our mobile position is very strong already. Even with the competition, with the promotions, with the subsidies, we are still very competitive. If we do go through with this merger, then of course, we'll be in a stronger position. However, the competitors are still very big corporations and there'll still be competition and we believe that all the players in the market will still strive to be the leader in the digital services.
Competition will still be there, but it might just go back to being in a more reasonable price, and we won't be competing on price as much as as before. We'll be competing on how we are the best service provider instead. Or if we're not number one, how do we maintain our number two status and maintain our number or our client base? But it doesn't mean that we're going to suffer. Competition will still be there. Finally, I have a question about some of the numbers about the depreciation. We've gone through the 3G, 4G, up to 5G, and we see the depreciation go down. If we look in the future, do you think next year's depreciation will be even more than this year or have you already peaked?
How about can we also think about the 5G investment? Because we know that we've invested already and adoption is coming. If you look at the current adoption rates on the different killer applications, not all of them need to switch to 5G at the moment. Does that mean the depreciation for 5G has already peaked and it will go down. It will only go down in the coming years? I can't really answer which or when the depreciation will be highest or lowest, but there will be a period where it'll go be at the peaks. We've seen that in the past couple years were very high because. Usually that comes with other stipulations like the license was delayed, for example. And I don't think 5G will be going down like that.
The decrease that we've seen this year is because of the CapEx as well. Of course, as we're early in the cycle, what we really want to do is to ensure that we have the most coverage as possible, and we want to be able to provide the cheapest or most affordable Fixed Broadband as possible as well. It's not going to be like what we saw in 4G, where we tried to get 98% coverage in the first two or three years. For 5G, I think it'll be maybe 80%, and then in the remaining 10%, 20%, there's going to be other areas that might take some time because it's more wider landscape. It's a broader landscape.
I think the point that it's at 2,600, I think we can maintain that growth for quite a while. I don't think 5G will see the same peaks as we've seen in the past. I think it will depend on the opportunities that arise. For example, for the 5G options, what will really affect it is whether the killer apps, new killer apps need 5Gs, and especially in the future, the new mobile handsets, when they are made for 5G, that's going to affect it as well. The more people use it, the pricing per megabyte, per gigabyte will be cheaper, and I think we can still maintain traffic growth. Thank you very much. I'm from Maybank. I have four questions. First is about the JV data center.
I've been following the news, and I heard the hyperscale data centers in the past few years, they've been limiting or trying to cap the electricity consumption to be more environmentally friendly, so they've been looking at alternatives. I just want to ask what AIS sees as the trend of data centers in Thailand. When will it take off? Is it going to take off soon, or is it going to be gradually? Are we going to get the technologies from Singapore or not, or what? And the second question is, I've seen in the slides that one of the goals was to maintain the EBITDA margin.
When we are seeing that if True and dtac are merging, and it's expected that in the first year after the merger, it's going to be quite chaotic with the network integration, people say that that would be a good time for us to get a bigger stake in the market. Does that mean the EBITDA margin will drop a bit, and then it will rebound after for True and dtac after they've been able to do the integration? My question is basically, are we going to see a short dip in the EBITDA margins because we might have to spend more on marketing to steal the market share while our competitors are still sorting things out? The next question is about JASIF.
For the infrastructure fund in Thailand, usually in the first 10 years, they're exempt from withholding tax. For the investors, they don't have to pay taxes on the dividends for the first 10 years. If I remember correctly in JASIF is that the tax benefits will end next year, in February, if I'm not mistaken. If these benefits no longer exist, would it be more beneficial for Advanced to just acquire JASIF and create a new infrastructure fund? Because if we continue to inject in the old fund, we might not see any additional benefits. Have you done any studies into whether it's beneficial to extend it past this 10-year period? Finally, when we talk about the old and new NPVs, for the old NPV for JASIF is 5.9.
The current one is THB 6. If we're going to purchase and acquire it at THB 6, why are we willing to purchase it at the 8.5 THB price right now? For the first question, for the data center, yes, I agree, because most of the data centers are located in Singapore, but there are limitations, whether it's the area or the electricity consumption. I believe that eventually it will migrate back to Thailand. It might not be in Thailand as well, but they will migrate to other countries, maybe our neighboring countries in the region. I believe that Thailand is still a good and attractive location. That is why we are working hard on working with them and trying to cooperate with Singtel.
Singtel has a good relationship with Hyperscaler because they are already in Singapore. Gulf itself, they are the ones that provide the power plants and electricity. If we are able to sell the data centers to enterprises, then it would be very good for us, and that's one of the reasons why we are focusing a lot on the data center business. For the second question about next year, if we want to swing the market share, is there going to be a dip in the EBITDA? I would like to stress that we are not going to look at competing through prices to pricing anymore or as much as we did in the past.
Because if we do that, we might see a drop in quality, and there are also a lot of other aspects and other options that we can do to gain their clients. If you ask me how much or is there going to be a drop or a dip, I can't really answer that. There's going to be a lot of data that we need to analyze to see if that would happen. In the future, we were going to have to seriously target our customers, and we might need to rely on our analysts when we look at the market share. Don't look at just the total market share because there are going to be people who are existing customers, and they are both with good lifetime value and not so good lifetime value.
We wanna focus on the good lifetime value and see how we invest to retain this group and because that would be the most cost-efficient. Of course, since the market isn't going to grow that much, I think focusing on the right group of customers and targeting them best will be the better option. The third question is the first 10 years of JASIF. Yes, you're correct. After the first 10 years, all the tax benefits will no longer exist. What we have to look at the conditions of when the deal ends, what we're going to do, and it's going to be a long process, it's going to take a long time, especially to explain to the individual investors. I think we're just trying to.
We're going to have to take it step by step, and we're going to try to offer something that's more stable and something that is appropriate to the risks. Finally, when you look at the NPV for JASIF, that's the current contract. Of course, at the moment it's rated at THB 6 , but in the future, when we become a sponsor of the fund, then we can make changes, but we don't have any plans that we have to commit to today. Of course, just trying to acquire them is already causing a lot of fuss already, so we're trying to take it slow and try not to rock the boat too much. Because people are already complaining that, "Oh, why are you putting so much weight on OpCo and not enough on AssetCo," for example.
What we really want you to look at is the actual return or the benefits. Is it really what you assume for it to be? Think about the extensions. I mean, this is something that someone, everyone is going to have to address and going to have to analyze in detail. Just to follow up, I have two questions about the discount rate that you mentioned. What was the discount rate that we used to get the THB 6 NPV? For example, if we fail to acquire 3BB, will we be able to grow our broadband sector in the double digits? Thank you.
I cannot remember the discount rate, but I think the discount rate should be the usual ones that we use. We have to use something that is acceptable in the market. In terms of not getting the approval from the unit holders of JASIF, I have to report to the shareholders that the business itself will be able to survive. We're going to grow either way. If we want it to speed up the growth, we have to invest. I'm not quite worried. In this business, with our mobile business, with the shared network, we will be able to continue our growth. The point here is that we are not worried. If they vote no, we will have to continue as it is.
This is Supachai from Yuanta.
I believe that we still have time for questions. Yes, we have time for one last question, if that's okay. I would like to ask two questions, actually. The first one is the appointment of another two members of the NBTC, what is the progress, and when would that be completed? The second question is the ARPU situation of the mobile sector is quite not so much on the good side. If the competition is still a competition, but if it's more reasonable, do you think that the RPU of postpaid and prepaid for Thailand based on the investment that we have to make, what would be the level of ARPU that is reasonable? For the NBTC, we have already proposed that to the Cabinet and to the Parliament, the Senate, and the Senate has already approved.
Even though it has been approved by the Senate, we still have to wait for the royal signature, and that depends on whenever the signature will be issued. That would be one of the committee. The other one that has not been approved by the Senate, then they have to go through the process again, which would take about 2-3 months. We will have to recruit and also to allow people to apply, and then it will have to be proposed to the Senate once again. For your question on ARPU with the competition, as I have mentioned that, you know, when we're in the market, when we're in the competition, if you want to increase pricing, you have to have the justification. For AIS, we are going to take two approaches.
The first one is, as mentioned by Mr. Tee, that we are going to do the market segment, more market segment, because we can see that what group of customers are keep changing providers, trying to take leverage on the reduction in price. Even though we may have more customers, but very diluted ARPU, and these customers will just keep changing the network providers. If we can step out of that sector of customers, then ARPU will go up instantly, and we can also make leverage on the Fixed Broadband as well because the FBB, sometimes they are not contributing much to the ARPU. The ARPU itself will have to be based on segments.
If we are going to do the market segmentation, we have to know our customers and divide them into segments. Also, it is not only AIS that is suffering because our competitors are also suffering as well. This is a result of a number of providers trying to get market shares. For example, if we look at network cost, network cost may be THB 200, but since we want the market share, we will reduce the price to about THB 100, and we're going to face deficit, basically. We're trying to send signals into the market that this is not a healthy competition. Sometimes we may match price in a number of segment in order to send the signals that this is not the way to compete.
We want to, you know, create a long-term value, and this approach will also increase the ARPU as well. The reasonable ARPU that you have mentioned is that we have a very solid basis, even though with decrease in ARPU, but we can see that we have growth in other facets. If we accelerate the adoption of 5G using 5G packages, then we will be able to increase the ARPU as well. We will switch from the aggressive competition. We want to increase ARPU by 10% using the adoption of 5G. Thank you, both executives for your time today, and I would like to thank all the analysts who joined us in this session.
If you have any further questions, please do submit your questions to us, to the IR team of AIS. We are more than pleased to assist you in acquiring responses to your question. I would like to thank you, everyone, and goodbye.