Top-up value tipped to boom
MAI-listed Forth Smart Service (FSS) expects online prepaid top-up transactions through its machines to see continued solid growth in 2017, outpacing the overall mobile airtime refill market.
“Top-up transaction value via our Boonterm top-up machines is expected to grow by 40% to 32 billion baht this year,” said FSS managing director Somchai Soongswang.
Thailand’s overall transaction value for online top-ups was over 100 billion baht in 2016, an increase of 30% year-on-year. The local top-up market saw a compound annual growth rate of 30% over the past three years.
Mr Somchai said FSS aims to increase the number of its Boonterm top-up machines to 122,000 by year-end, up from 103,000 now.
FSS saw its top-up value reach 8 billion baht in the first quarter of the year, an increase of 48% from the same period in 2016.
“This generated revenue of 777 million baht to FSS, as we earn a 12% fee from the transactions,” Mr Somchai said.
SET-listed Forth Corporation owns 45% of FSS. “We believe we will achieve the target of 32 billion baht in transaction value this year,” Mr Somchai said.
He said that up to 24 million mobile users have consistently refilled airtime via Boonterm machines nationwide, with 2.2 million transactions a day. The average top-up transaction is 30 baht.
Up to 94% of FSS’s revenue stems from mobile airtime refills, with the remainder coming from cash transfer, online game refills and bill payment.
Mr Somchai shrugged off the mention of competition from True Corporation’s recent jump onto the online top-up machine bandwagon.
True, the parent firm of third-ranked mobile operator True Move, deployed a few hundred online top-up machines at CP Group’s 7-Eleven convenience stores. CP Group is the parent firm of True Corporation.
Mr Somchai said there are only 8,000 Boonterm machines at the front of 7-Eleven stores nationwide, less than 10% of FSS’s total Boonterm machines.
“We have yet to see any significant negative impact on our revenue so far,” he said.
Mr Somchai questioned why True felt the need to install top-up machines at 7-Eleven stores to serve True Move’s prepaid users, as customers can refill airtime directly at 7-Eleven stores.
He insisted that FSS still has a good business relationship with 7-Eleven. He said FSS caters to customer segments different from 7-Eleven’s. FSS’s minimum top-up is 10 baht per transaction, while the minimum at 7-Eleven is 50 baht.
CP banned airtime refills for AIS’s prepaid mobile service at all 7-Eleven counters nationwide last September, citing an unsettled commission deal.