AIS Puts Profit Above Market Share

By Srisamorn Phoosuphanusorn, Bangkok Post, Thailand

Apr. 25–The mobile-phone leader Advanced Info Service (AIS) is reducing its emphasis on market share growth in a bid to improve profit margins and sustain business.

AIS achieved its sales target of net new subscribers in the first quarter of this year and intends to maintain its share at around 50 percent of the mobile market, said Titipong Khiewpaisal, the company’s assistant vice-president for marketing.

“We now want to focus on profitability and not market share in order to avoid competition that could harm our corporate future and the overall industry in the long run,” he said.

“We are also repositioning our brand image by shifting from the premium market to the mass market under the easy-access concept.”

AIS expects to sign up 2.7 million new customers this year, which would bring its total to 24.7 million. Second-ranked DTAC, meanwhile, expects to attract four million out of an estimated 10 million new cellular subscribers this year.

“If we want to increase our market share, we need to pursue an aggressive price strategy,” Mr Titipong said.

“Also, we believe that the current 50 percent share is a ‘balance level’ between AIS and rivals for the local mobile industry.”

He said that Thailand’s mobile-phone market had not been affected by low consumer confidence thanks to affordable handset prices and low-cost tariff plans. The market has also been fuelled by aggressive competition strategies among operators in underground distribution channels, dealers’ commissions and below-the-line marketing approaches.

He said he was positive about a decline in price competition, which could lead to more sustained market growth. Mr Titipong said AIS was considering revising its sales target upward this year based on the unaffected sales growth in the industry. But he declined to specify new figures.

To increase the number of new customers, AIS yesterday introduced what it called a simple, straightforward tariff campaign, hoping to attract 20,000 customers per month above its initial target.

The promotional packages provides postpaid customers with double credit value, starting from 300 baht a month.

—–

To see more of the Bangkok Post, or to subscribe to the newspaper, go to http://www.bangkokpost.com.

Copyright (c) 2007, Bangkok Post, Thailand

Distributed by McClatchy-Tribune Business News.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

AVIFY,