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Advanced Info Service Pcl (SET:ADVANC), 23% owned by Singapore Telecommunications Ltd, is the leading GSM mobile operator in Thailand with about 41 million subscribers and 52% market share by revenue. According to the Financial Times, the company operates in three segments: mobile phone and call center services, mobile phone sales, and datanet and broadband services. Advanced Wireless Network (AWN) Co., Ltd., formerly known as AIS Wireless Communication Network Co., Ltd., operates as an ADVANC subsidiary.
The company said on February 4 that its second-half semi-annual 2015 revenues were 76.58 billion baht, missing the 79.76 billion baht estimate by one analyst, according to the Financial Times. Advanced Info Service posted second-half 2015 earnings of 6.53 baht per share, missing the 7.97 baht per share estimate of one analyst.
ADVANC reported a dividend of 12.99 baht a share in 2015, which represents an 8.25% increase from 2014. The 25 analysts covering the company expect dividends of 10.63 baht a share for the upcoming fiscal year, represented an increase of 18.2%. The next earnings announcement from ADVANC is expected on May 9. Analysts are expecting earnings of 9.64 per share on revenues of 84.17 billion baht.
On November 12, ADVANC and True Corporation (SET:TRUE) won the auction held by the National Broadcasting and Telecommunications Commission (NBTC) of Thailand for the two 4G spectrum licenses of 15MHz bandwidth each on the 1800MHz frequency, and agreed to pay 40.99 and 39.79 billion baht, respectively. The second auction of the 900MHz spectrum was held on December 15. TRUE and Jasmine International (SET:JAS) won the bids and were supposed to pay a record 76.3 and 75.67 billion baht, respectively, for the two 4G spectrum licenses.
In late January, AWN, an Advance Info Service subsidiary, said they officially launched its 4G services, AIS 4G Advanced, in both the 1800MHz and 2100MHz spectrum bands with service coverage for over 42 provinces in every region nationwide and planned to have full coverage in every province by May 2016. AWN also said it plans to spend 40 billion baht this year on the rollout of its nationwide 4G network on the 1,800MHz spectrum, and another 20 billion baht on the further expansion of its 3G network on 2.1GHz.
In late March, JAS failed to pay its first installment of the 8.04 billion baht license fee, which resulted in the termination of JAS' right to provide G4 service. Advanced Info Service sent a letter to the NBTC and offered to pay 75.65 billion baht for Jasmine’s 900MHz 4G spectrum licenses without going to the auction planned by the NBTC. The deal, if it is approved, is good news since the AWN final offer before throwing in the towel at the 4G auction on December 15 was 75.98 billion baht, according to the Bangkok Post.
The shares of ADVANC are now trading in a descending broadening chart pattern and could grind higher, now that the potential price war in the 4G mobile market seems to have subsided. As of April 4, 2016, the consensus forecast amongst 27 investment analysts polled by the Financial Times advises investors that the company will outperform the market, with the median 12-month price target of 190.5 baht per share.
Disclosure: Long position in ADVANC and no recommendation. |
