[SINGAPORE] The core earnings of Thailand’s telecommunications sector are expected to rise 38 per cent in 2025, outpacing the Stock Exchange of Thailand’s forecast growth of 6 per cent, a Maybank Securities report said on Thursday (Jul 3).
Analyst Wasu Mattanapotchanart said this strong performance will be driven by two key factors: a rise in average revenue per user (ARPU) and the recent increase in spectrum savings cost.
The sector’s projected core profit growth is expected to be 11 per cent in 2026. In contrast, the growth of the Stock Exchange of Thailand is expected to grow 8 per cent over the same time period.
Wasu noted that the growth of mobile and fixed broadband (FBB) ARPU highlights the telco sector’s resilience amid a weak economy.
“We expect healthy growth of mobile ARPU in the second half of 2025, thanks to the data-quota reduction for 150-200 baht prepaid plans in February 2025,” he said.
The analyst forecasts the ARPU growth for the mobile industry to be at 3.6 per cent this year, slightly lower than the 4.4 per cent growth in 2024.
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ARPU growth for the FBB industry is expected to be slightly lower than the mobile industry, at 3 per cent. However, this is still higher than the 1.3 per cent growth clocked in 2024.
Wasu said that the Thai telcos under Maybank’s coverage, namely True and Advanced Info Service (AIS), do not target market share gains. He noted, however, that AIS has been more aggressive than True in driving revenue growth, citing the increase in focus on content bundles by AIS.
“Both operators have stated multiple times that they will not resort to price cuts to gain market share, so we expect average revenue per user trends for both mobile and FBB to remain positive,” he said.
The analyst noted that another reason for the higher core profit growth forecast was the expected increase in spectrum cost savings, following the spectrum auction on Jun 29.
True is expected to increase spectrum cost savings from 2.1 billion baht (S$82.8 million) in 2025 to five billion baht in 2026, following its purchase of the 1500 MHz spectrum to boost network capacity during high-demand download periods in both urban and rural areas.
AIS is also expected to increase spectrum cost savings from one billion baht in 2025 to 2.5 billion baht in 2026.
It remains Maybank’s top pick for Thai telco stocks, due to its healthy yields of 5 to 6 per cent and its lower risk profile, noted Wasu. It remains a buy, with its target price rising marginally to 320 baht, from 319 baht previously.
Wasu expected AIS to raise its dividend payout ratio from 90 per cent in 2025 to 100 per cent in 2026, thanks to growing free cash flow. This will increase yield from 4.6 per cent in 2025 to 5.6 per cent yield in 2026.
“AIS’ one-year-forward yield is 5.1 per cent, 3.6 percentage points higher than the 10-year government bond yield of 1.6 per cent.”
The yield gap of 3.6 per cent is 2.2 standard deviations higher than the five-year mean of 2.1 per cent, and also the largest yield gap in nine years, he said.
True remains a “buy”, with Maybank raising its target price to 14.4 baht, from 14.1 baht previously.
The analyst noted that despite remaining a buy, True is likely to see a performance hiccup from the second quarter of 2025 as a result of network outages and customer churn from the English Premier League.
However, True is expected to have core profit growth of 108 per cent, 18 per cent, and 12 per cent in 2025, 2026 and 2027, respectively.
As at 3pm on Friday (Jul 4), shares of AIS were down 0.4 per cent at 279 baht, and shares of True remained at 11 baht.
