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February 19, 2009

Thai top mobile operator sees steep decline in 2009 profit

Thailand's top mobile phone operator, Advanced Info Service Plc, reported a 92 percent fall in quarterly earnings on Wednesday due to weak consumer confidence and a goodwill write-off for a subsidiary's network, reported Reuters.

Earnings growth is likely to slow this year as the mobile phone sector feels the impact of the economic slump.

"Telecom market growth is expected to significantly slow down during 2009," AIS said in a statement.

AIS, 21.4 percent-owned by Singapore Telecommunications Ltd, posted October-December net profit of 420 million baht ($12 million), down from 5.13 billion baht a year earlier.

The fourth quarter is normally a peak period for mobile use but this time demand was exceptionally weak as the closure of two Bangkok airports late last year by political protests reduced revenue from international calls and roaming services.

For the whole of 2008, net profit rose 0.7 percent to 16.4 billion baht versus analysts' forecasts of 16.8 billion baht.

AIS, valued at $6.4 billion, has about 50 percent of the domestic mobile market, ahead of Total Access Communication's DTAC roughly 30 percent share.

Its 2008 service revenue rose 6.5 percent from a year earlier, but it booked a loss of 3.55 billion baht for goodwill relating to network impairment in the fourth quarter, higher than market expectations centring on 3.35 billion baht.

Excluding the one-off item, net profit from normal operations rose 7.5 percent to 18.76 billion baht.

AIS expected service revenue to rise 3-4 percent in 2009 due to growth in new subscribers in the provinces, benign competition and high non-voice services.

AIS had 27.3 million subscribers at the end of December, up 13 percent from a year earlier. It added a net 535,600 new subscribers in the quarter versus 877,000 in the previous quarter. That compared to 468,718 net additions for Total Access.

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