dtac, one of the largest mobile phone providers in Thailand, has reported strong second quarter results, with service revenue excluding IC and EBITDA growth of 2.3% and 21% from the same period last year, respectively.
Net profit for the period amounted to Bt743 million, growing 426% from the second quarter last year.
In the second quarter 2017, dtac managed to grow service revenue excluding IC by 1.1 per cent QoQ and 2.3 per cent YoY, despite Q2 being a seasonally weak quarter and a lower level of spending.
The success was attributable to the momentum of the campaigns launched earlier, namely “Smoothest Network”, “Flip It”, “Go No Limit”, and the “dtac reward” loyalty program.
Moreover, in order to serve the increasing demand for data services, dtac kept on investing heavily in the network and expanded the 4G network coverage to reach 82 pere cent of the total population.
Overall network coverage stood at 94 per cent of the total population. In addition, the potential cooperation with TOT on 2300MHz wireless business also helped reduce spectrum uncertainty and improve consumer confidence towards dtac's brand and services. All of these helped to sustain strong growth in the postpaid segment, with 168k net additional subscribers, and data services.
At the end of the second quarter 2017, the total subscriber base stood at 23.6 million, with more than 96 per cent registered under DTN, a subsidiary holding the 2.1GHz licence from the NBTC.
EBITDA for the second quarter amounted to Bt8 billion, a sharp rise of 16 per cent QoQ and 21 per cent YoY. The EBITDA margin reached 41 per cent, an improvement of 610bps from the last quarter and 760bps from last year.
The increase was mainly driven by lower regulatory costs, handset subsidies, and selling and marketing expenses, as a result of the ongoing implementation of various operational excellence measures. However, as competition in the market is still intense, dtac is ready to be more active in the market.
Despite the continuing increase in depreciation and amortization expenses until the end of the concession, net profit for Q217 jumped 224 per cent QoQ and 426 per cent YoY to Bt743 million, on the back of strong EBITDA growth. Furthermore, operating cash flow (EBITDA-CAPEX) remained solid at Bt3.9 billion, a strong increase both QoQ and YoY.
Based on the results of the first half of 2017, dtac is on track to meet the full year target, which remains unchanged. The outlook for 2017 comprises (1) service revenue excluding IC at the same level as last year, (2) EBITDA at least at the same level as last year, and (3) CAPEX in the range of Bt17 to 20 billion.
Lars-Ake Norling, dtac’s Chief Executive Officer, said: “We are happy to see service revenues returning to growth both QoQ and YoY, despite lower overall spending in the market. This indicates that we are on the right track.
“We’ll continue to fight and maintain our competitiveness in the market, supporting the ongoing densification of the network to enhance mobile Internet experience, and impactful marketing activities. The strong results improve our financial position. Moreover, we are flexible and well prepared financially heading into the final year of the concession.”