InTouch schemes disruption
InTouch Holdings has scaled up its investment in digital-driven businesses this year as the country’s biggest telecommunications conglomerate accelerates its efforts to deploy disruptive technologies to shake up old-fashioned telecom services.
InTouch has initially allocated up to 45 billion baht to its mobile flagship Advanced Info Service (AIS) for its 4G network expansion in 2017, another US$250 million (8.8 billion baht) to its satellite arm Thaicom Plc for a new satellite launch, an additional 200 million baht for venture capital through its Invent Co, and another 250 million baht for research and development on new technology-based business opportunities.
“To sustain our business growth, we’re exploring new digital-driven business opportunities in order to catch up with an expected surge of 100% in data usage in Thailand this year,” said Philip Tan, chief executive of InTouch Holdings.
The surge in data traffic growth is being driven largely by the government’s various digital-driven projects, including smart cities, the national e-payment scheme, the Thailand 4.0 economic model, as well as strong digital infrastructure developments from private telecom companies in 4G network and cloud computing data centres.
Thais used 3.6 gigabytes on average per month last year, up from 2.5GB in 2015, thanks to the rapid proliferation of video viewership.
The number of mobile internet users in Thailand was 50 million last year, with a total 60 million smartphone users.
However, Mr Tan said InTouch expects to see flat revenue growth in 2017 on par with last year’s 12.7 billion baht as the group has started a new investment cycle this year.
InTouch saw a sharp decline of 21% in net operating profit to 12.7 billion baht last year on falling revenue from satellite and mobile services.
Up to 95% of InTouch’s consolidated revenue stemmed from AIS, and the remaining 5% from Thaicom.
He said InTouch sees a massive market opportunity in Thailand, which it views businesses as ready to transform into digital businesses through the use of big data and Internet of Things technologies.
“We will focus on providing digital lifestyle services on mobile platforms under the theme ‘Connecting Thais for sustainable growth’,” said Mr Tan.
In 2016, there were 75 million calls made on AIS’s mobile networks, which means at least 150 million people were connecting with AIS mobile infrastructure. About 255 channels were broadcasting through Thaicom’s satellite transponders last year.
Mr Philips also said Thaicom will decide by the second quarter of this year on whether to launch the Thaicom 9 satellite or not.
Thaicom is under negotiations with the government to set a new fee structure for the industry to govern new satellites such as Thaicom 9, which is expected to be launched in orbit in 2019.
“We might seek alternatives other than launching our own satellite, if we cannot settle a win-win resolution with the government by June,” Mr Philip said.
The alternatives include renting a coordinated orbital slot from satellite operators in other countries or funding a foreign strategic partner to co-provide services on the partner’s satellite.
“With our 25-year experience of satellite business, the government should support our survival for national pride,” said Mr Philip.