Thailand’s third largest mobile operator has announced that it is set to axe 1,000 jobs despite posting a sharp increase in its net profit in Q4 2017. Dtac is embarking on an aggressive and robust cost-cutting program in an effort to put the telecommunications firm back on a solid financial footing.
Despite a positive double-digit data growth and increase in net profit - the operator’s revenue declined drastically, whilst it also lost market share as a vast amount of prepaid subscribers opted for packages on offer from its rivals.
Dtac released a statement officially confirming that it will cut 1,000 jobs following months of speculation from media sources in the country. Telenor which is the parent company of the Thai operator plans to reduce Dtac’s workforce by 6,000 over the next three years. A representative for Dtac claimed that market competition in relation to voice and data services in addition to over-priced spectrum forced the operator to reduce its staff.
The spokesperson said, “Lower revenue for voice services and over-priced spectrum licenses has put pressure on financial return. Nevertheless, the industry remains a growing, profitable market and several revenue opportunities can be seized.”
The operator’s net profit in Q4 2017 jumped to THB542 million ($17.3 million) from THB30 million in Q4 2016, due to a sharp drop in regulatory costs and lower handset subsidies. Net profit for the full year inched up 1.4 per cent to THB2.12 billion.
Revenue during the recent quarter fell 5.5 per cent year-on-year to THB20.3 billion, due in part to a 25 per cent drop in handset sales to THB3.04 billion. Service revenue was down 0.6 per cent to THB17 billion, data revenue grew 16 per cent to THB11 billion, but voice dropped 23 per cent to THB3.87 billion.
The operator continued to lose subscribers, with total subs falling 7.5 per cent year-on-year in 2017 to 22.65 million. Prepaid subs dropped 12.2 per cent to 17 million, while post-paid users increased 12.5 per cent to 5.6 million.
Dtac’s market share dropped by 2 percentage points in 2017 to 24.5 per cent and it was overtaken by rival True Move, which ended the year with a 29 per cent share, GSMA Intelligence data showed.
Blended APRU rose 4.7 per cent year-on-year in Q4 to THB250, with post-paid ARPU up 3 per cent to THB578 and prepaid ARPU falling 5.1 per cent to THB152. The company said a partnership with state-owned telecoms TOT to deploy 4G service on the 2.3GHz band will increase its 4G bandwidth.