Thailand's Dtac has reported a record 90% slump in net profit for the second quarter of the year, due to a steep decline in prepaid subscribers as well as high capex and other costs.
Net profit for the quarter fell to 141 million baht ($4 million), in a result the operator also attributed on higher depreciation and amortization costs and lower ebitda, as well as a one-time 394 million baht restructuring cost.
The company's total subscriber base shrank by 524,000 to 25 million, with prepaid subscribers falling by 715,000. By contrast, postpaid net additions increased by 77% to 191,000.
In its quarterly report, Dtac blamed the weak prepaid performance on “competitors’ aggressive subscriber acquisition activities through heavy handset subsidization and strong distribution channels.”
To address the decline, Dtac has reintroduced prepaid handset subsidies and launched new Dtac prepaid branded SIMs targeting data-oriented users.
Dtac's 4G userbase meanwhile increased from 2.9 million in Q1 to 3.5 million in the second quarter, and the operator aims to grow this to 6 million by the end of the year.
Blended ARPU for the second quarter grew 7% year-on-year to 211 baht as a result of the lower prepaid subscriber base, but declined 2.6% quarter on quarter as growth in data revenue failed to fully compensate for declining voice revenue.
Capex meanwhile grew to reach 4.29 billion, or 22% of total revenue, as Dtac spent heavily on network rollouts. Network opex increased 3.9% year-on-year to 1.49 billion baht.
For the full year, Dtac warned it expects intense market competition to continue into the second half. As a result, the company expects service revenues to slightly decline from the previous year, and plans to maintain capex at the same level as last year, which was around 20 billion baht.