The head of Thailand's Shin Corporation has expressed fears that shrinking personal consumption resulting from the country's economic slowdown will inevitably affect the local cellular market if the situation drags on over the next 12 months.
Somprasong Boonyachai, the chief executive of Shin Corp and executive chairman of its mobile flagship, Advanced Info Service (AIS), said that although mobile phones were not considered an essential product, the segment might be hit even harder than most if the country's economy worsens.
"Thailand's economic situation is now precarious. Even though mobile phones are not a primary product, the country's prolonged economic slump would eventually have an adverse impact on AIS," Somprasong said in an interview.
Earlier, AIS said the ongoing political uncertainty would force it to scale down investment plans and suspend all business activities that could be perceived as breaching contracts and the Telecom Business Law.
The country's largest cellular operator had set aside a standby investment budget of 20 billion baht (US$662.8 million) this year to meet any emergency needs including network expansion.
AIS registered 1.57 million new subscribers in the first quarter, bringing its total to 21.1 million customers as of March 31. In comparison, the company recorded 225,700 net new users in the same period a year earlier.
Defying sluggish economic growth, the entire industry recorded 3.5 million net new subscribers in the first three months of 2007. Second-ranked DTAC signed up 1.46 million, while third-ranked True Move enlisted 500,000 new customers.
However, Somchai Lertsutiwong, AIS's executive vice-president for marketing, contends that Thailand's mobile market this year has been registering artificial growth performance that did not truly represent the number of active subscribers and the overall industry.
He said the growth was unsustainable and due mainly to an aggressive push by operators to give SIM cards away.
In any case, Somchai said, AIS intended to maintain its share at around 50 percent of the mobile market to achieve sustainable growth, but he declined to give his company's sales forecast. DTAC has targeted nine million new customers this year.
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