SECTOR FACES 'STEADY GROWTH TRAP'

Even with an oligopoly, telecom firms say cost pressures require new revenue streams, writes Komsan Tortermvasana

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The telecom sector is expected to continue to post steady growth, driven by telecom operators' continued cost reduction programmes and market competition at a "rational" level.

However, the sector's steady annual growth rate of 1-2 percentage points above the country's GDP growth has become a "growth trap" that pressures operators to seek new revenue streams, especially from digital services, the head of Advanced Info Service (AIS) said.

Somchai Lertsutiwong, chief executive of AIS, said mobile broadband services are a commodity for people's daily lives.

He said the consumption of fixed and wireless internet bandwidth has soared annually, but this is a "steady growth trap".

Mobile and fixed broadband services account for 92% of AIS's total revenue, while the remainder comes from digital services and solutions.

NEW REVENUE STREAMS

The company expects virtual banking services to be its main revenue earner in the future.

A group comprising AIS and partners applied for a virtual bank licence from the Bank of Thailand.

The Finance Ministry is scheduled to announce the list of approved virtual bank licence applicants by June 19.

AIS also invested in cloud and data centre businesses, expecting them to become major new revenue streams in the future, Mr Somchai said.

"The telecom business continues to struggle to sustain revenue growth," he said.

"For AIS, the challenge is how to drive non-mobile businesses, including all digital services, to contribute 20% to the company's total revenue stream within three years."