Thai (Bualuang): ICT - ARPU uplift from 5G uses and innovative digital services
- Short-term 5G premium erosion from COVID-19 pandemic
- 5G proactive approach could gain 34% higher 5G ARPU by 2030
- Our preferred picks are ADVANC and INTUCH and THCOM
The 5G average revenue per user (ARPU) is likely to recover once the COVID-19 impact lessens and service providers roll out additional 5G-related uses which will offer 5G upsell opportunities. A proactive 5G approach by focusing on core and adjacent digital services will add a huge upside to ARPU in the long run. In the ICT space, our preferred picks are ADVANC and INTUCH (BUY) and THCOM (TRADING BUY). We also put TRADING BUY calls on TRUE and DTAC.
Short-term 5G premium erosion from COVID-19 pandemic
Based on Ericsson Consumer and Market Insight report on the topic of “Harnessing the 5G Consumer Potential”, half of the people contacted by the survey claimed that their financial situation has been undermined by the COVID-19 pandemic and they would be more cautious about spending more on 5G plans. Due to the pandemic, the average premium that consumers are willing to pay for a 5G plan has been eroded from 20% in May 2019 to 10% amid the current spread of the pandemic. However, one-third of 5G early adopters with greater 5G awareness were still willing to pay a 20% premium. The survey indicated that the 5G premium erosion could be short-lived since 45% of respondents across the 17 markets surveyed expect their household income to improve in the next 12 months.
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