After 27 years of operation, dtac’s concession came to an end on 15 September 2018. Prior to the expiry of the concession, dtac secured adequate spectrum and access to infrastructure under concession from CAT for use in providing wireless service to ensure continuity of services for its customers.
In addition, dtac has an opportunity to acquire additional spectrum at an auction in late October to strengthen its spectrum portfolio and network position.
At the end of September 2018, total subscriber base stood at 21.3 million, approximately 99% of which registered under DTN, a subsidiary holding the 2.1GHz license from NBTC.
Expansion of the ‘dtac-T Turbo’ network was well ahead of target, with nearly 6 thousand base stations installed by the end of the third quarter.
Furthermore, 2100MHz network densification has been ongoing to add more coverage and capacity. Overall network coverage stood at 94% of total population.
dtac has treated customers with honesty and integrity during the transition period and proactively communicated with them ahead of the concession end date.
Core service revenues (defined by revenue from voice and data services) increased slightly by 0.3% YoY for the first 9 months of 2018. However, service revenues excluding IC for the same period declined 1.7% YoY, mainly driven by lower IDD and other service revenues.
Despite the payment to TOT for the 2300MHz wireless service partnership, which commenced in the second quarter, EBITDA margin for the first 9 months of 2018 remained high at 41.5% of total revenues. Excluding such payment, EBITDA margin for the same period would have been 45.0%.
Net profit for the first 9 months of 2018 amounted to THB572 million due to higher depreciation and amortization expenses from continued investment in network and one-time non-cash charge of THB1.4 billion after the settlement of tower ownership dispute with CAT prior to the concession expiry.
Furthermore, operating cash flow (EBITDA – CAPEX) for 9-month period remained strong at THB11.6 billion and financial ratios are solid, with net debt to EBITDA of 0.7x and net debt to equity of 2.8x. Cash on hand at the end of Q3-18 amounted to THB26.0 billion.
dtac revises the financial guidance for 2018, comprising low single digit decline in service revenues (excluding IC), EBITDA margin in the range of 36% – 38%, and CAPEX of THB18 – 20 billion.
Alexandra Reich, dtac’s Chief Executive Officer, said “We have been well prepared for our end of concession in order to ensure that our customers are well taken care of.
Our immediate objectives are the 2300MHz network rollout and migration of the remaining customers to DTN. With an opportunity to acquire additional low band spectrum to strengthen our spectrum portfolio, dtac will be in a better position to compete and capture market growth.”
Dilip Pal, dtac’s Chief Financial Officer, said “Despite heavy investment to accelerate the expansion of 2300MHz network, our operating cash flow remains solid. Service revenues was temporarily under pressure towards the end of the third quarter due to uncertainties surrounding concession expiry.
However, we managed to keep EBITDA margin above 40% level for the first 9 months of the year. Our financial position is strong and flexible for future investment.”