ADVANC-R.BKADVANC-R.BK
LOADING
|||
Unknown Executive: Good morning, everyone. Welcome to our third quarter of 2025 Results Conference Call. First, let me introduce our management. We have our former beloved CEO, Khun Somchai.
Somchai Lertsutiwong: [Foreign Language]
Unknown Executive: Our newly appointed CEO, Khun Pratthana.
Pratthana Leelapanang: [Foreign Language]
Unknown Executive: Our CFO, Khun Tee.
Tee Seeumpornroj: [Foreign Language]
Unknown Executive: We have Chief Enterprise Business, Khun Phupa.
Phupa Akavipat: [Foreign Language]
Unknown Executive: We also have Chief Retail Business, Khun Prapat.
Prapat Siangjan: [Foreign Language]
Unknown Executive: Khun Nattiya and myself will be briefing you the results and running this session. So at this moment, allow me to officially welcome Khun Pratthana, our new Chief Executive Officer, following the transition from Khun Somchai, who has successfully led AIS for the past decade through multiple transformation milestones. Khun Somchai has been with AIS close to 30 years, and holding CEO position for the past 11 years. Now let us hear from Khun Somchai, as he would like to share a few words with this community.
Somchai Lertsutiwong: Good morning, investors and analysts. I would like to take this opportunity to thank all of you that support me all the time. For me is a really great time here. It have been the pleasure me to serving as a CEO for the past 11 years. I will miss the -- missing with all of you, but I never miss the Roadshow. Even if you still invite me, I am willing to go with Pratthana, and I will be by your side and follow up and push Pratthana to make more and more return to -- off you. Okay. For me, I view hard list leadership to Khun Pratthana, who you'll know well. And I feel confident as we will continue to go with greater vision and energy. I hope the investor analysts will continue to support AIS under the next chapter of leadership under Khun Pratthana. Thank you very much. We hope to see you in any Roadshow that you invite me. Thank you very much.
Unknown Executive: Thank you Khun Somchai for your kind words. We truly will miss you, and we hope that we can invite to the roadshow. Before we begin the quarterly session, let me introduce the new office chart. While we now have Khun Pratthana as our new CEO. Khun Pratthana also has been with AIS close to 30 years. Before this position, we are familiar with his role as Chief Consumer Business, taking care of mobile service, and then he was promoted to Deputy CEO, Chief Operating Officer, next to CEO position. Under Khun Pratthana, we have 2 Deputy CEOs, and now 7 business units responsible by C levels reporting to him. At this moment Khun Pratthana will be acting as Mobile Business unit head, while Khun Tee is acting as Broadband Business unit head. The company is in the process of succession plan. Now let us hear a few words from Khun Pratthana.
Pratthana Leelapanang: Very good morning to the -- everyone here in the conference call, to all analysts. I've been honored that the company appointed me as the new leader of the team. Under Khun Somchai leadership, AIS has evolved from mobile network operator into a fully, I would like to use the word, integrated digital service providers. And we have set -- we believe that AIS under leadership of Khun Somchai have set a new benchmark for multiple times, including this quarter for the industry. I'm very committed to build upon the strong foundations of AIS, and to drive AIS together with the whole team to a very new era whereby digital and AI infrastructures will play a very pivotal role for country capabilities in the digital economies era. AIS team as a whole is looking forward to work hard internally and with partners across industry to deliver exceptional experience for the customer and exceptional values for our every customer. With the comprehensive sets, our product service across 5G, broadband, enterprise solutions, retail, entertainment and about to come digital financial services. Again, I'm truly honored, and we are very committed to bringing the best for Thailand and society sustainably. Thank you very much.
Unknown Executive: Thank you very much for your notes, and we now expect to hear more from him in subsequent events. Now let me begin with a short brief and then going directly into Q&A. At this time, you may also reserve to ask the question through the chat box. Please kindly put your name and your corporate name. In the third quarter, AIS continued posting solid results with core service revenue continued growing, supporting by strong connectivity and content proposition, despite a challenging economic situation. Mobile remained resilient, focusing on 5G and driving more values to uplift ARPU alongside content engagement. Broadband delivered another strong quarter with continued focus on quality subscribers, innovative products and premium bundles beyond broadband. Enterprise momentum remains solid, driven by EDS & Cloud, while we will continue to drive data center growth through our [Technical Difficulty]. The retail business grow uncertain retail strategy in product mix, stock management and sales capability. Profitability was strong from efficient cost control and lower spectrum costs. Looking at the first 9 months of 2025, AIS delivered a quality across all key metrics. Our EBITDA margin remained strong at 55% total revenue with ROIC at 15%. The net debt to EBITDA was at 1.9x, underscoring a very solid financial position and a low cost of borrowing. Overall, AIS continued to outperform with quality growth in expanding our business beyond connectivity and efficient capital management. We expect to continue delivering strong returns to shareholder. While we are anticipating that this investment community will be interested on the impact from 2100 megahertz NT contract expiry and the recent auction cost savings. We have placed an illustration showing the accounting impact in both MD&A and our conference call slides, where you can download through our website. Further questions regarding specifically on this, please reach out to IR team after this session. And this is the end of a short brief, and we'll start with the Q&A session now.
Unknown Executive: [Operator Instructions] And we have Ranjan from JPM.
Ranjan Sharma: First of all, all the best Khun Somchai. I wish you all the best, and it's been a great leadership of AIS under you, and all the best to Khun Pratthana, look forward to the same execution under you as well. So with that, I can come to my question. Like Khun Pratthana, can you help us understand your key objectives and KPIs as we look to lead the organization and also how you think about capital allocation as well.
Pratthana Leelapanang: So the key objective and KPI of the organizations is to bring forward the growth for a cross business, integrating mobile broadband, enterprise, entertainment, retail, and digital financial service to come. So we truly believe that AIS can play more roles in the AI and digital infrastructure, bringing values to the countries so that we set forward ourselves to go there.
Ranjan Sharma: Can I just follow up on the capital allocation side as well, I mean, given that you're generating such strong free cash flows now, how you look to use the excess capital?
Tee Seeumpornroj: Sorry. We didn't hear you clearly. Are you asking about the excess -- excess cash?
Ranjan Sharma: Yes. Given your strong free cash flow generation of the business, how you think about capital allocation going forward?
Tee Seeumpornroj: Okay. Yes. I think in the end, first and foremost, every time this, then -- it's dividend, right? So I think we committed to pay a high dividend payout ratio. That's to be expected from our shareholders in a way. But apart from that, I think we are preparing -- it's actually good that we have excess capital right now because looking forward we see a lot of growth path that we can take. Khun Pratthana mentioned a bit about growing in a few directions, enterprise, infrastructure, also mobile and broadband as well. We still believe there's room to grow. So I think you may see that we may come back with a bit more investment over the next few years and also in preparation for the spectrum auction that we anticipated to happen in the next year or 2. I think that will be a certain requirement to put the money back to work and hopefully to grow the business again.
Unknown Executive: We have Piyush from HSBC.
Piyush Choudhary: First of all, all the best, Khun Somchai, and congrats Khun Pratthana on the new role, and wish you the best. I have few questions. Firstly, if you can discuss about the macro environment in Thailand. And how do you see the kind of growth outlook in both mobile and fixed broadband, the ARPU outlook as well? Second question is your 9-month performance has been really strong. So why guidance has been kept unchanged. Are you expecting kind of any headwinds in the fourth quarter on the cost side? And thirdly, if I may ask, there was a sharp decline in admin and other expenses of 21% year-on-year, what drove it and the outlook for the same?
Pratthana Leelapanang: Allow me to address the first one in the macro environment. Thailand is now still, I would say, under the period of recovering. Especially the last quarter, we start to see a bit more positive in economy recovery. We believe towards the end of the year and next year will be still under the phase of recovery. In any way, we do not see a negative side, but positive sign. For mobile, broadband and telecom in Thailand, it's very clear that the market is really move on focusing on value creation rather than hyper competition. And you also see from us and our competitors on that particular focus, so the profitability has been brought back to the industry, and we both are competing to bring value for customers. In terms of outlook, when we think about how things would grow, I believe that the digital services based on both mobile, broadband, enterprise, we play a very important role to add values. So we do expect a positive side of it continue on. On the guidance, we do not expect the surprise for the last quarter. And this is now about to end the quarter. We do not have a plan also to revise it. That's what I want to say.
Unknown Executive: On your last question about admin side. In admin, we also booked performance-related item. That's basically the bonus. So there's accrual in particular quarter, especially last quarter and some adjustment in this quarter as well. Next, on the top three, we have a high base. If you recall, last year, we mentioned that we booked the accrual performance base in Q3 for Q2 and Q1 as well. So we started the year in 2024 with a very conservative outlook. And we had a very low admin expense in first and second quarter last year. So in third quarter, we accrue more performance bonus, and therefore, it was a high base.
Piyush Choudhary: Right. Third quarter number is a normalized number. There is no reversal of any provisions, right, in this?
Unknown Executive: It's not that big of an item. So you may -- some look at the third quarter onward. If no further questions from Piyush, we have Thitithep from KKPS.
Thitithep Nophaket: Okay. I have 3 questions. Number one on the mobile phone revenue gap between [indiscernible], we have seen quite a substantial gap in the past 2 or 3 quarters. May I have your view on why the CapEx is, because when I look at the price band of 2 companies, they are almost identical and the U.S. went the gap to continue in the next few quarters as the first question. The second 1 may have your view on the CapEx outlook for 2026 and possibly 2027? Because right now our 5G network already covered in 95% of the population. And the third 1 right now, people are using the 5G package is already 35%, 36% of user subscriber base. Do you expect that my pension has to continue? And what would be the peak, can it lead to 100% in the next few years? Those are all the figures.
Pratthana Leelapanang: Allow me to address the first one. In terms of mobile revenue gaps, I would say we look inwards rather than outward. We have been very focusing on the customer needs, acquiring the right segment of a customer on the quality basis. So that has been helping as to improve the mobile revenue as well as improve the customer experiment along the way. Because you might remember when we talk about unlimited low plan and all of those is continue to be tapered off. So that has helped improve the ARPU and revenue. On the other side of competition, I think they were also putting forward that attempt as well, depending on the speed of each company. But I do see a positive trend of both competing on building on values. Whether the gap is wider remain to be seen, we don't know. But we will continue on focusing on what we are doing, bringing our quality and value to mobile services. So I think that's number one. On number two, in terms of investment for network, we will continue on making sure that we strengthen our network services with the proper CapEx to fund that particular experience. For the past year, 1.5 years, the CapEx has been on the low side simply because we are pre-investing in 5G, and the capacity is enough. We have seen the continued ongoing of traffic for both mobile and broadband. That would require us to make sure that we invest profitably to lead in the customer experience continue on. So that you can expect that we will fund that in 2026, '27 onward. On your last question regarding 5G, now we are at about 30-plus percent of penetrations. We do believe that 5G penetration can go to 70%, 80%, 90%, not so far away from now. Everyone would need to use it, and we are confident that it will grow. So I think there are a lot more room for AIS to build on that piece.
Unknown Executive: Now we have from Khun Pisut from KS.
Pisut Ngamvijitvong: Yes. First of all, congratulation to your good results, Khun Somchai for your retirement. Hopefully, you have a good time with your baby, and also Khun Pratthana.
Somchai Lertsutiwong: I will quote your suggestion for my daughter. Thank you very much.
Pisut Ngamvijitvong: [indiscernible]
Unknown Executive: [Foreign Language]
Pisut Ngamvijitvong: My first question is about your [ C-Band ]. If you look at your ARPU, it went up from 120 to 150. I mean, 120 before the market consolidation to 150 in this quarter. And prepaying revenue has gone up nicely. Do you think this is -- what is the right proportion of mix between prepaid and postpaid level because you see that the prepaid revenue mix has been going up as well. And we have seen the 2 steps when you reset the price for [indiscernible] 2024 and also over the...
Unknown Executive: [Foreign Language]
Pisut Ngamvijitvong: My question is about prepaid revenue. Basically, it went up quite okay. My question is that how far your prepaid ARPU can go up further? And what is -- what do you think -- what is the mix for the level in the prepaid and postpaid?
Pratthana Leelapanang: Okay. On prepaid, I would like to put the perspective of prepaid and postpaid announced that they could be so cut, it very much like the method of payment. People subscribe monthly subscription in prepaid, and they do pay mainly subscription very large segment ten or millions of customer paying subscription for data in a monthly basis. So I would say that very close to postpaid in some way and the way they pay for it is through the bank account, bank application and so on. So it's a mixture now of how they want to use packages and the way of payment among pre and post. Prepaid has been continuing on recover from past 4, 5 year, whereby there are a huge amount of customers, and many of those have multiple SIM and some SIM are inactive. When the country strengthened the personal identification or those number has been disappeared for the market in millions. So the number of prepaid and overall shrink a bit for the past 3 years. And at the same time, the market recover from hypercompetition or overly provide unlimited data. So that has helped prepaid ARPU to continue on. We do believe that both prepaid and postpaid ARPU will highly depend on the needs of customers to use data. And we do expect that the data demand will continue on growing year-on-year. So that's what I believe it would be. On the prepaid alone ARPU, we still think there are room because the penetration of 5G will continue on growing for both postpaid and prepaid. So that you can expect that you'll see a continuation of it.
Pisut Ngamvijitvong: My second question is about your network CapEx. Your 9 months network CapEx seems below your full year guidance quite a bit. But you'll keep the guidance unchanged. You may not want to change the [indiscernible] EBITDA, but in terms of the network CapEx, do you think it is possible for you to understand what do you target to spend for this year? And this means that we will help the free cash flow to make more aggressive presettlements for this year and next year.
Pratthana Leelapanang: Allow me to address this one. We are very committed to network qualities. Supporting our customers, it will be on schedule on our plan. There are many of work in progress that may not immediately reflect in Q3, but that's on plan.
Pisut Ngamvijitvong: My last question is about -- on the liquidity front, the NBTC has been trying to enforce some of the market package to serve to help us -- I mean, the cost of living of the people. I think first thing that about to find out. And also what I heard from the industry is that it's about to revisit the selling rate for voice and data not spotting that what's happening next year is about 3.5 gigahertz plan that could be option in 2027. Could you please give some comments on these 3 things on the [indiscernible] front?
Pratthana Leelapanang: On the attempt of the regulators, we see as a very positive trend that the government do see a very strong value of digital services, and it will be part of every one, as well as the government service through that digital services. That's why mobile and broadband has been on the highlighted how the government will support tie to have access to all of those in a very economical way. What we have been providing AIS and the industry is a very competitive telecom services, and we are the third from the lowest price in the world in terms of price per gigabyte or even broadband in service. So we see a very good trend. Even though it looked like -- there will be more imposed, and we will work with regulators to bring the best for the consumers. So that's what I would say. And the cost structure itself also is unavoidable anyway that we have continue on cost structure of spectrum network investment and many more. It will continue on to be in next year, the new spectrum comes, it will be more. But with the economical of scale, and the technologies, we believe that we will bring in value continue on with -- even with those structures.
Unknown Executive: Next we have Khun Wasu from Maybank.
Wasu Mattanapotchanart: I'm Wasu from Maybank. I have three questions. So the first 1 is about the admin expense. Can we expect the admin expense to be relatively stable Q-on-Q in the fourth quarter? Or alternatively, can we use the number that we saw in Q3 as the base going forward. So that's the first question. The second question is about the marketing expense. So I'm aware that 4Q is usually the high expense for the marketing expense. But for this year, in particular, is it reasonable to assume that the marketing expense will drop year-on-year because of the more earning period that we are seeing this year. So that's the second question. And the final question is about the CapEx trend over the long term. Given that Khun Pratthana just mentioned that the data usage is rising. And also to -- just completed the network consolidation process last month. So should we expect AIS to increase the network CapEx in 2026 and 2027 to maintain the network quality leadership going forward.
Unknown Executive: On admin side, it may be difficult to gauge where the numbers will land. However, in third quarter, because there are some adjustments on both the staff-related and IT rationalization. So likelihood is fourth quarter, it could be higher on the admin side. Marketing wise, yes, it's morning period. However, we also do have plans on certain marketing campaigns also relative to the content engagement. Normally, it's a high season. So difficult to say what the number will be, but we expect that we will continue to try to manage the marketing campaigns as properly. CapEx trend in the future. So maybe just remind you a bit that 2, 3 years back, if you recall, we did invest quite heavily on the 700 megahertz for 5G. So that also gave us quite a lot of capacity over the last few years. As we are moving forward, we also -- as Khun Pratthana mentioned, we want to ensure that we lead in the network quality leadership and customer experience, including some new features of the network that we want to build upon. So the tendency is we are looking at the higher trend of the CapEx versus this year. Next we have Arthur from Citibank.
Arthur Pineda: Firstly, all the best to Khun Somchai and congrats to Khun Pratthana for taking the hot seat. Several questions, please. Firstly, you mentioned digital and AI services as a key focus area. How should we see this from an investment and CapEx standpoint? Are you, for instance, looking to invest more in additional data center capacities outside of the JV with GULF or things like GP as a service? I'm just wondering how this impacts CapEx and earnings volatility going forward? Second question I had is with regard to mobile. AIS has been gaining market share over the last 2 quarters. What do you think it's been doing differently, both of you seem to be quite rational and focus on quality subscribers. I'm just wondering what's driving that gap? Is this mainly because of the churn related to their network outage? And has that started to change into the fourth quarter?
Pratthana Leelapanang: The first one regarding AI and digital infrastructure. We are pursuing with the joint venture structure with GULF into AIS, as well as [ GSA ], I believe we have also released information regarding the joint investment with GULF on that. We do see a very strong demand and needs of investing in AI infrastructures. That would also related to GPU and AI factories that later on, you probably will see -- allow me to not go into detail today, but that will be past and passive of our plan to go for very strong demand. It will be in form of the joint ventures with partners and maybe more that to be released later. That's the first one. The second one regarding mobile. We are very focused on quality, supporting existing customer and quality acquisitions. We did not change our strategy at all for the past 24 months. And I think it is the right strategy to make sure that customers have the best product, and we hope to continue on. The competitors some way somehow moving in the same direction. And I believe that we also see a very positive trend later as well.
Arthur Pineda: So if you could -- just allow me ask another question. I'm just wondering about pricing for the mobile services. Consolidation has happened 2 years ago. We've not really seen any notable changes for pricing in the industry even with inflation and all. I'm just wondering the outlook for 2026, do you expect this to remain static and the strategy will just remain on upselling and bundling? Or is there room for prices to finally move?
Pratthana Leelapanang: The whole mobile base is beyond $90 million, and all of those are all in different price plans. The pricing in the market for new acquisition has been improved in the ways that the unsustainable price plan has been eliminated or continue on to be improved in terms of value offering. With that, on the surface, we may not see the price hike, but you have -- if you look closer, you will see the elimination of those unsustainable plan. That's the whole fundamental of it. And with the base and a new customer coming in, we see the demand to use more data continue on. And that gives us opportunity to offer them individually with the proper packages for the upsell and cross sales. And that's also, again, has helped improve our revenue and profitabilities. And we see that one continue on rather than price hike.
Unknown Executive: We have Ranjan to follow up.
Ranjan Sharma: I have my follow-up question. Thank you for giving me the opportunity. It's actually coming from an investor. So I want to ask them on your behalf. Can you give more clarity on future CapEx and how that's going to evolve? And how are you going to allocate that between mobile, broadband, data centers, digital banks and the other initiatives that you might have. So the question is around the total CapEx spending in the coming periods and how it is going to be allocated between the different businesses -- existing and new business.
Tee Seeumpornroj: I think, you're asking for the future plan that we are still working with the shareholders and the Board. But in terms of the trend and direction, as I think when Nattiya mentioned the past 2 years, I think we minimize the spending on CapEx because we invested earlier when we expanded 5G. The next 2 years, what we'll do, as Khun Pratthana mentioned as well is, we will try to come back to make sure we have the best network in the market. You see the trend of data usage still going up. So we want to make sure that we have enough capacity to serve the customers. In terms of how we separate that? I think it's hard to say because mobile broadband is easy. I think you can project that they can use certain percentage to revenue. We have more customers, we have more usage in our network. So that we need to invest a bit more there. Also, when we acquired TTB, we also didn't spend a lot in terms of CapEx for network on the broadband side. After 2 years and it's time to actually go back and start to make sure we have enough thought to expand the service again. But when you rope in data center and other big ticket infrastructure, that sometimes take a bit of time to build up. And also, we're going to invest when we also get some security on future cash flow. So we can tally the numbers out, but I think that us get that plan finalized with the Board, and we give guidance next year. But whatever we spend on data center or even the AI infrastructure, it will need to link to certain anchor demand that we feel secure with that number because it's a JV, so it won't show up as part of the CapEx of even to guide, but maybe in terms of investment that we're going to put into the JV, we're still working at all those formulas. And hopefully, when we do guidance for next year, then we can give you a bit more clarity on that.
Unknown Executive: We have Nuttapop from Thanachart.
Nuttapop Prasitsuksant: I think since you have reclaimed #1 market share in mobile again, so right now maybe looking for the new revenue stream. So may I start the first question on Enterprise Business that we see a lot of new investment in AI data center globally. Do you see an uptick or like accelerating demand for big corporate or even small corporate in Thailand to take up this kind of like -- to basically to propel your Enterprise Business, that's number one. Or do you think Thailand need some, I don't know, 3, 5 years like time before that to grow? Second one is on the product sales also. We have seen a big improvement in terms of margin. But I think over the past few years, sales revenue or like broadband sales revenue is quite stable. So can we expect more of the margin improvement or the sales improvement to boost that portion later? Because I think you have to do a lot of the renovation of your branches, of your service points, can we hope for the growth on that? And lastly, Khun Pratthana, do you think that -- are you still happy with these four pillars, if I'm not wrong, to drive AIS further? Or do you think to get the new revenue stream or to move the company further? Do you expect another pillar to be added going forward?
Pratthana Leelapanang: Allow me to take the first question about the enterprise and the uptake on the AI and data center. We still see the strong demand from the enterprise customer, the big customer, including the hyperscaler that coming to Thailand. We still see around 18% to 20% market growth and strong demand on that one. If you're talking about how they adopt the AI, I think all the enterprise customers are talking about AI demanding more on the network infrastructure because the AI also required to download and upload more. We see business from the hyperscaler who invested and expand in the data center in Thailand, that I think the information I could share.
Tee Seeumpornroj: From the sales side, the first 9 months that we performed is about 13% growth comparing to last year. So that is the, I think, is driven by the apples that -- what we are actually a lot in September. And in terms of the margins, the contribution margin is growing about 7.5% is about 8% comparing to last year. So that is -- I'm going to keep momentum -- of this momentum until the year-end. For the sales side, I think we're going to achieve more than double digit for the year-end also for the -- that is my perspective in terms of the sales. Okay. For the expected margin improvement, we're going to improve about, maybe 10% comparing to last year also in year 2025 comparing 2024. What we are going to achieve is -- the first one we are going to focus on the product, which is the Apple, which is the highest season of the fourth quarter of AI retail. The second one, we're keeping on the renovations, which is -- we're going to have more 20 locations that we're going to renew it to make the atmosphere and also the occurrence of the store. We're going to focus on our own brand, which is [ Laem ]. I think when you get the sample last time, and I think we get, in terms of the sales a bit growing, and I think the market is improving also on that one. But last but very important is about the financing focus, which is the -- how to make the people come to the store and easy to buy. I think that is going to work firstly with the bank and nonbank. I think those are the four focus for detail. And yes, of course, the last very important that we're going to introduce -- actually, we are on the trial phase is about the omnichannel. Once you go to the retail store, and you cannot find the model or the color that you want, from now on, you can order and you can pay at your store, you get the point of the AIS point, and then we ship to your house within the certain days that we are going to focus on this one.
Pratthana Leelapanang: And the last one regarding the growth pillars. I'd like to address in a way to reflect markets and the stage of Thailand. In mobile, our #1 core pillar. Once again, we are only at 30-plus percent in 5G penetrations. There is a lot more room for us to better serve customers in the deeper penetration of 5G. In other countries, go beyond 50%, 60%, 70% already. And that pillar is still very strong for us to do more work, to serve customers and grow the company in mobile pillars. The second one, broadband. The broadband, fundamentally every home will need broadband in the future. Thailand is at about 50% household -- living household penetration of broadband, and we do see room for us to grow. As Khun Tee mentioned earlier that we make sure that our investment will support that strongly to get every whole broadband available. And thirdly, a very important pillar is the enterprise, which every enterprise in the future would be digitalized. We're just starting the journey of enterprise in term of enterprise telecommunication solutions as well as the digital infrastructure, AI infrastructure for the future enterprise as well as the digital government. So those are 3 fundamental pillars that I believe did continue on to be very important for us to make sure that we meet the demand and provide the best product and services. And on top of that now, is entertainment, retail, digital financing are coming on top to serve the customer. With these 3 plus 3 pillars are our key pillars to move forward. There will be more to come and later on when the times can be released the information.
Unknown Executive: We have Izzati from Macquarie.
Izzati Hakim: I have a question on the AI infrastructure. So I just wanted to get a sense in terms of the competitive landscape, especially when it comes to the DC to DC connections, the terrestrial fiber wholesale part of the business, which I believe is topped under your EDS segment. So with the hyperscalers coming in Thailand and also in ASEAN in a big way, how has that changed in terms of negotiating with these key clients of yours? And are we seeing any competitive pressures coming from smaller private companies trying to provide similar services in terms of connectivity. Just want to get your thoughts on that.
Pratthana Leelapanang: Allow me to take these questions. About the AI and infrastructure, actually, the way that we see is relating to the data center business and also the software on top of that. We have the strong, let's say, the partnership and strong position on the pricing point on the electric city as well. I mean, when we build the data center that normally we would have the anchor customer or some secure customer before we build and those customers come to us because of the TCO and mostly coming from the cost of electricity that we can manage the price. And then -- that is a key issue that I want to share. The second one about the DCI, I mean the data center cross-connect interconnectivity. We have the solid foundation that is ready to serve. The upcoming demand of the data center, as we see now, we have around 40 -- this is roughly number of the data center around Thailand. And we see the growth around 20% or the demand of around up to 1 gig in the near future. So our infrastructure on that 1 is ready. And when you talk about the EDS, we also have the feature that we call the sale network management, which allow the customer who are in the data center managed network by themselves and then increase our time to market also the service quality to our customer. I think -- our competitors, we don't see the significant competitiveness or the price point fighting on that space a lot. I mean, it may be -- it is because of the -- we have very big infrastructure to serve the demand already. And instead of seeing the competitors, we see them as a partner because we partner with them, we have the model to go to market and expand our adoption to the partner as well. That is our strategy to do this year and next year.
Unknown Executive: We have Khun Supachai's question from the chat box. So the first question is, can you explain the slower year-on-year growth in Enterprise revenue in the third quarter compared to the first half? What is the trend in the fourth quarter?
Pratthana Leelapanang: Actually, the reason that we see -- even though the slower on that one is very limited and very minimum. The explanation is about the Prompt Pay that we have on the order. We are working on to recover that one. I think that's a short answer for that question.
Unknown Executive: What is the trend in fourth quarter?
Pratthana Leelapanang: I think we will be able to catch up the expectation from the shareholder on the enterprise revenue.
Unknown Executive: The second question goes to retail, and that's from [indiscernible]. What is the recent development in retail business after introducing your house spend being up. What is the feedback on this brand, particularly any new initiative to share?
Tee Seeumpornroj: Okay. We launched on July this year, and I see the growth until today is about 56% growth comparing to the first launching. So we're going to complete maybe $15 million. This is -- you see from the number, it's not that much comparing to the other revenue that we have, but anyway, the margin of the level on the house branding is extremely high comparing to what we are actually selling in the store. So that is the first milestone that we actually. The second one is we're going to increase in terms of the SKU, the number of the linkage. So we're going to add up another three more items, which is related to the iPhone 17, this is going to boost up sales of iPhone 17 also, so that is our own brand. And the third one is, we're going to sales in more channel. We just start selling in our own location, which is populated by the AIS, but we go in to expand to the partners, [indiscernible], so that is the link up in the summary. And like I said before, so the online sales in our own channel going to be one of our focus. The omnichannel, once you go to online, you can shop online, you can go to offline, you can go online also. So that is the three things in short that we are going to focus differently comparing to last quarter.
Unknown Executive: Third question, what would be a big change Khun Pratthana would like to bring to AIS in the next 3 to 5 years?
Pratthana Leelapanang: First of all, I must say that we -- under Khun Somchai leadership, we have set the industry benchmark bringing company into a very strong integrated digital service providers. Number one is not changed, but to build on the strength and the fundamental asset that we have on integrated digital service providers. And number two, as I mentioned earlier at the beginning that we are very clear that in the digital and AI infrastructure era, AIS could play a very important role serving the countries, bringing a pivotal point of these capability, product and services to the country and to every customer, and we do intend to do so.
Unknown Executive: On the side note, he asked me to also -- big congrats to Khun Pratthana and thank you Khun Somchai for your leadership and support. I am learning a lot from watching you lead. I wish you a happy retirement. That's from [indiscernible]. Next we have Khun Pisut from KS, again.
Pisut Ngamvijitvong: Yes. Thank you for the follow-up questions. The first one is on many revenue grew 5% versus the GDP growth, 2% plus minus, even below. I remember that Khun Somchai management used to mention that the mobile growth will be similar to the GDP growth and this is much better than what you have said before. So next year, GDP growth would be not much different from this year or even slower. And Khun Pratthana come in recently imply some confidence that AIS will outgrow the mobile [indiscernible] with the GDP effective next year. This my interpretation scores. What do you have idea on this one?
Pratthana Leelapanang: Currently, we are entering into the phase that everyone, every business do require to use digital services to even leave or do what. I think it's fundamental that digital infrastructure fund the growth of the countries. So we do hope, next year GDP would be better than what you said. We do really hope for that. But once again, the 5G broadband enterprise, we have started a lot, but there are a lot more things to do. So in mobile, in particular, as mentioned, 5G is just 30% penetration, and we expect to be more. So I would say that it will be ongoing, hopefully, I can say, growth and development of customer behavior as we start to see growth coming back and new application will come in, I'm very positive about that.
Pisut Ngamvijitvong: And my next question is, with your revenue keep growing, right, and your CapEx will be higher in the [indiscernible] but your CapEx from sales or CapEx intensity would be stable or even lower. Am I on the right direction on this one?
Tee Seeumpornroj: I think you should look at the long term compared to the past, not compared to just this year or last year. I think the -- if you'd go back a little bit higher than this past 2 years, but it won't be as high as when we start expanding the 5G. I think the reason for that is, as mentioned, we want to modernize our network as well, and also prepare for new growth. So that's something that we need to put some of the money upfront so that we can grow the business more than just the current mobile broadband services. But as I mentioned, percent to sales, it won't -- you can look at that as a benchmark. It varies within those range.
Unknown Executive: Next we have Khun Minling. She leaves us questions in the chat box. Can you compare 2,100 megahertz, which will expire in 2027 with 3,500 megahertz that -- which one you prefer. And if you can get 3,500 megahertz before 2027, will 2,100 megahertz still be needed?
Pratthana Leelapanang: 2,100 megahertz is on Schedule 2 reoptions as is expired. And NBTC and the country are looking at our spectrum bands whether it make available in public for auctions. We cannot say right now, in particular, as Khun Somchai always mentioned that we look at every spectrum both individually and collectively, value combined. So we see later when NBTC and now which one is available, we will be participating. The 2,100 megahertz is a fundamental band for our network and competitor network, for sure. 3,500 megahertz would be new to the industry previously source of in between telecom and television satellites. We believe that the schedule of 3,500 megahertz will be parts and parts of the whole thing related to satellite television as well. We cannot say whether it's going to be available sooner than scheduled, it remain to be seen, but we will consider it individually. There will be more spectrum as well that NBTC might put it for auction. So we will look at everyone, as mentioned.
Unknown Executive: And the last question from [indiscernible] from the chat box. First, congratulations on your results. I have two questions. First, could you share how the ARPU momentum looks for the mobile and home internet business in October? Second, what is your revenue guidance for the fourth quarter? And what positive factors are you expecting to support it?
Pratthana Leelapanang: So we see good trend. The government has been supportive of countries to recover. For the past few weeks, the stipulation program also help every businesses. And even though it's not direct to us, we see a very positive trend ongoing for mobile. I think for the fourth quarter on the broadband side, I think we will still see the positive trend continue. But given normally the last month, we won't get to sell a lot anyway. So I think we still expect a good result. But in the end, it's also depending on the competition in the market. After we announced our result and also our competitor announced the result and I think both sides will go back and try to revise the SIG so that still the unknown factor that can impact the performance towards the last 2 months, yes.
Unknown Executive: We would like the last questions from Piyush, follow-up from HSBC.
Piyush Choudhary: I have two questions. Firstly, on home broadband. Could you share what drove kind of the ARPU quarter-on-quarter by 2%? And what other initiatives company is undertaking to continue this ARPU growth in home broadband? Secondly, on the mobile side, 5G subscriber penetration is still hovering around 34%. So what is the limiting factor? What initiatives like company could take to further improve this penetration? If you can share the split of 5G subs between prepaid and postpaid?
Tee Seeumpornroj: I think on the broadband ARPU, okay, the strategy for sure is, right now, we try to offer a higher-quality broadband service to the higher segment. The more we can get the people who have money to spend to subscribe a better service than it's better for us. We are not looking at increasing ARPU across the board. Normally, we will have new product and services launching in the last quarter of the year as well. But this year, we refrain from that because we are doing the IT migration of the system. So the new product service is going to come out probably early next year. And that will be the continued effort in trying to lifting the ARPU up. We're looking at increasing a number of services that we have with existing customers as well. That hopefully will continue to fill the ARPU growth for 1 to 2, 3 more years.
Pratthana Leelapanang: For mobile 5G, the growth of 5G is going along with the 5G device penetration in the markets. Thailand markets are not under the highly subsidy markets, customers purchase their phone individually rather than highly subsidized to fund the growth of 5G. So the key factor is 5G device penetration and 5G device injection to Thailand. We see a positive trend of more and more model continue on being a better offering of 5G model bit by bit. 4G and 3G, I would say, 4G mostly is still widely available at very economical price. So it will take a bit of time as well for 5G to bring down into those level of price, but we see a positive trend. To really support customer, as our Retail, Khun Prapat mentioned, our footprints, our service direct to customer would be able to help AIS to support customer into the 5G era. We continue on seeing a very strong trend of customer adopting better phone with financial services that we, together with our partner, provide later on next year would be also from ourselves supporting customer as a part of the plan, and that would be the engines that we will do a better job for our customer.
Unknown Executive: To support on this, we also see 5G handsets growing at 30% year-on-year. If you look at 5G package subscription growing at 36%, so they are growing hand in hand. So there are no further questions and our time -- sorry -- and our time is up. And therefore, thank you, everyone, for participating and see you in the next meeting.