Ais, dtac set to enjoy a high on-year q2 net profit

One telecom analyst at a foreign brokerage expects AIS, the Kingdom's largest cellular operator, would show a normal net profit of Bt4.6 billion, up 25 per cent year on year but down 12 per cent quarter on quarter.

With seasonal factors, AIS's service revenue is expected to grow 5-7 per cent year on year but decline quarter on quarter.

With extra revenue from the dispute settlement between its Digital Phone (DPC) subsidiary and DTAC, AIS will record Bt1.7 billion worth of one-off gains in the second quarter, and thus its total profit is projected to be Bt5.8 billion.

In May, DPC, which is wholly owned by AIS, paid almost Bt3 billion plus value-added tax to DTAC to settle their dispute involving overdue roaming fees and pending claims between the two parties.

DPC booked the total DTAC claim of Bt4.739 billion in its financial statement as of last December 31 but paid DTAC Bt3 billion. Therefore, AIS will incur Bt1.739 billion in its second-quarter financial statement.

The analyst also expects DTAC to post a normalised second-quarter net profit of Bt2.2 billion, up 65 per cent year on year but down 8 per cent quarter on quarter.

Its year-on-year growth driver is a gain of an estimated Bt100 million to Bt200 million in net interconnection revenue, against a net payment of Bt1.4 billion in the same period last year.

The interconnection charge is the fee the network of an outgoing call pays to the network of the call's recipient on a per-minute basis.

Related to the extra gain, DTAC will record a one-off gain of Bt2.4 billion of revenue from the dispute settlement with DPC. Including this amount, DTAC's second-quarter net profit is expected to be Bt4 billion.

Recently, DTAC chief executive Sigve Brekke said his company had targeted 5-10-per-cent revenue growth from total revenue of about Bt66 billion in the same period last year.

Executives at all of the cellular operators hold a common optimistic view that the industry will not feel the pinch from the economic slowdown, but that depends on whether the economic situation turns worse in the second half of the year.

However, many telecom analysts believe the market cannot avoid a second-half slowdown, because consumers will control their phone bills, in order to save money in this time of rising oil prices.

DTAC is waiting for National Telecommunications Commission (NTC) approval to upgrade its network to offer third-generation (3G) mobile broadband service on its 800-megahertz spectrum band by which it plans to provide high-speed Internet connection to provincial areas unreachable by the fixed-line broadband-Internet network.

A source at CAT Telecom, which owns the DTAC concession, said DTAC might have to wait about two months before it could start the network upgrade.

Once the NTC grants approval to DTAC, CAT must still forward the case for consideration by the committee under the Public-Private Joint Venture Act, as required by law. After that, CAT will also ask for Cabinet approval for DTAC to upgrade the network, given that the move is under the CAT concession. The whole process will take time.

AIS kicked off a 3G service in Chiang Mai in May on the 900MHz spectrum but cancelled plans to launch one in Bangkok last month, citing spectrum constraints.