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Truecorp - Profits Up Despite Historic Lows for ARPU
Truecorp is Thailand's third largest network by customer numbers, and at the end of Q1 09 it just managed to reach the 15m customer mark. Annual growth stood at 20.5%, the highest rate of the four major operators in Thailand. However, this was down from 53.0% for the prior twelve-month period. Moreover, growth in Q1 09 was less impressive, the quarterly uplift of 0.25m being the lowest figure since Q3 05.
The poor figure for Q1 09 net additions was the result of a slump in prepaid growth. The gain of 136k was the worst for more than three years and was less than half the 319k recorded in Q1 09. By contrast, contract net additions more than doubled compared to Q1 08, from 49k to 111k. This took the total contract customer base over 1m for the first time, with 1.08m at the end of the quarter. Meanwhile, prepaid customers reached 13.92m. On an annual basis contract growth stood at 41.0% compared to 19.2% for prepaid, and this disparity resulted in a 1.0pp improvement in the contract percentage to 7.2%.
Despite the enhancement of customer quality, ARPU fell 19.3% to THB117 per month in Q1 09. In fact, this was the lowest figure ever recorded in the seven years Truecorp has reported this metric. Contract ARPU was down 19.8% to THB433 while prepaid ARPU fell 21.0% to THB94, and both of these figures were also all-time lows. The fall in ARPU has been long-term and there is at least some consolation in the fact that the rate of decline has slowed somewhat: in the twelve months to the end of Q1 08, there was a 36.1% fall in ARPU. However, with penetration in Thailand now in excess of 95% and similar downward trends at other operators, it is highly probable that ARPUs will fall further as a result of increased competition.
The revenue figures showed the impact of the fall in ARPU, a 7.0% annual decline taking Q1 09 service revenues back to THB 7.74bn. Total revenues also fell, although a tripling of handset revenue limited the decline to 2.1%. The company managed to more than balance out the decline in revenues with a cut in costs, and operating profit therefore rose by 48.4% to THB 0.89bn, while EBITDA was up by a more modest 6.1% to THB1.87bn.
Posted to the site on 9th June 2009
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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