Advanced Info Service Public Company Limited (ADVANC) Earnings Call Transcript & Summary

So I would like to start our second session. So good afternoon all distinguished guests, and I would like to welcome you to the analyst meeting session for AIS, Advanced Info Service Public Company Limited. So I would like to introduce to you the executives who are here with us today. The first one is Mr. Somchai Lertsutiwong, the Chief Executive Officer; and also Mr. Tee Seeumpornroj, the Chief Financial Officer. For this session will be divided into 3 parts. The first one is the -- is on bringing Cognitive Tech-co forward by Mr. Somchai, and the second one is the building sustainable profitability to be presented by Mr. Tee. And after that, we will go into the Q&A session, and you can -- please feel free to raise your hand. If you have any questions, and we will bring the microphone to you or you can also scan the QR code to leave us the questions beforehand. And I will read out the questions to the executives. So without further ado, I would like to invite Mr. Somchai to take the floor and start the first session.

Good afternoon, all analysts, investors, and distinguished guests, I am -- myself and Mr. Tee, we are going to speak briefly and shortly about AIS and also we're going to touch upon the 2 topics on the moving forward to Cognitive TECH-CO and what it entails. And also Mr. Tee will be talking about the sustainability on how we can distribute the profit to investors and analysts from our business operations. So Cognitive TECH-CO for my topic, it has not -- there has not been much change in terms of converting AIS into the digitalized service provider. We try to create more value based on the core business, which is the core mobile of a -- as we are going to be strengthening our core business as portrayed to the investors and analysts for a number of times before. We are going to still focus on our core business, but we will have another pillar, which is to start the new growth engine, which is to fix broadband and enterprise. And also in the near future, we are going to move forward into investing for digitalized service. So these are the 3 pillars that we have mentioned earlier. And so what does it have to do with being the Cognitive TECH-CO. So in simple terms, I would like to -- over the -- in the future, apart from these 3 pillars, we will have to add 2 more, which is the IT and networking, that are existing have to be strengthened and adjusted the network will have to be developed, and we have to have the autonomous network and IT will have to be intelligent IT so that we will enable the use of data analytics or AI as efficiently as possible. So this is the first part that we are laying down the foundation to ensure that these 2 will be the foundation of the 3 pillars. Secondly, in terms of our operation, in our internal operation, we are working in terms of 5G operating model, and that is we are going to adjust our operation internally to increase the efficiency and reduce the cost of operation. So originally, when we use to work off-line, we used to work manual, we used to have call centers. In the future -- and all these original conventional way of doing business, the cost is very high and also the human resources that are required are also high as well. But if we have the autonomous network and intelligence IT system, we will be able to serve the clients and customers on the online basis. So these are the 2 foundation -- 2 parts of the foundation that we have to enhance and strengthen in order to enable us to complete the 3 pillars, which will lead us to eventually be in the Cognitive TECH-CO. So in the first half of the year or in a short-term perception, what we would like to do for these 3 pillars is, first one is the mobile business, which is our core business. As you have seen that and as you may be aware that we are very competing very aggressively in the market. And AIS is the -- we are going to be the leader to lift -- to uplift the A-R-P-U or ARPU, the average revenue per user, but we're not increasing the price unreasonably. But we are confident that we are the strong leader in this facet. And at present, the network quality for AIS -- we can see -- like the more -- higher difference now. With the offer of packages that AIS are offering right now, this will also affect our competitors as well. And we are going to use -- uplift the ARPU by using 5G adoption. And handsets and 5G handsets are now that the price per handset have reduced, and this will also encourage people to use 5G even more, more people will apply for 5G basically. And apart from the network quality, which is our core business, we also focus -- we will also focus on intelligence network and autonomous network. And this will enable us to personalize our service. And we will have to work on this in order to ensure that our customers will be satisfied with the service that are tailored or catered to their demands. Service is still the core, is the heart of AIS. And also we will strengthen our loyalty program as well. As I have mentioned that we are the leader of loyalty program where the -- in terms of privileged points, ecosystem and so on and so forth, we are now seeing more competitors and they have better ecosystem, but we are going to improve on that. So the second half of the year, we will go with -- collaborate with KTB and so on and so forth to make a difference in terms of customer experience. So for fixed broadband itself, we are focusing on this pillar, and we are successful. So we are going to enhance the quality of fixed broadband to be even better. For AIS fiber, we are expanding -- we are accelerating our investment, but at the same time, we have to make it -- to offer a premium quality service as well. And I believe that we will rank #3 among the top 3 towards the end of this year, but I'm not mentioning the merger with 3BB because we have to wait for the approval of the NBTC and also the shareholders of 3 that as well. But in our conventional operation, we are going to expand and invest more in our service provision. And also, we are going to offer more content, more service to upsell and cross-sell for our consumers as well. And this will enable us to step up as the leader faster than our organic growth. So this will also depend on the approval. Also with the acquisition of Triple T Broadband will also depend on the approval of the NBTC. For the enterprise business, even though we may be new in this industry, but we are growing stronger. We can see that there are more than 30% growth every year, even though our client base may be small, but it is growing. So in terms of ICT or enterprise, the opportunities in the markets are very high number, and -- but we would like to focus on things that we are -- that we have specialty. So we want to focus on new technology, whether it is the cloud technology, the cybersecurity, IoT, ICT solutions in the facet that we are interested in, more particularly the 5G vertical solution that we can actually work on, but we're not going to focus broadly on ICT solutions because we have so many competitors, and there are so many solutions available. And the last one is a data center that we are going to invest alongside Gulf. Also, we will have a clearer picture towards the end of this year. So these are the things that we would like to expand in terms of our enterprise business. And if we're successful in this efforts, we will be the solution provider that is very strong because we have everything on our hands. Some of our competitors, they may be good at the solution in terms of ICT, but they may not have the infrastructure for other services, for example, but we can provide end-to-end solution to our consumers. So this is something that we are working on. And also what proves that we have are now heading towards the right direction is that we -- over the last few years, we have partnered with Microsoft, and we have been voted by Microsoft itself that we are the best partner of the year in Thailand. Because we saw so many customers, we have increased number of customers and we are so invested in the human resources within our organization to equip them with the knowledge, and also Microsoft supported us in terms of human resources as well. And they can see that our people has very high capacity. And this is a guarantee that everything that we will provide in terms of the enterprise business, we have so many opportunities. And also but we have to build up a team that is stronger, and we have to be able to deliver in what we promise and deliver in what we have expertise. We focus on quality and not quantity. What I would like to add is the digital service. You may have heard about digital service about -- from AIS, but not so -- not quite tangible. So what I would like to mention today is that we are working on digital service on the step by -- as a step-by-step process, and we were cooperating with our partners. For digital service, the income will start to be recognized as soon as the product has been launched and the users have well respond to those products. And we're not going to spend so much cost investing in digital service because we can see that a number of service provider invested a huge amount of money in the digital business, but they cannot offset that cost by the profit. So the plus side of this is that we can control the cost. Once the product has been taken off, then we will invest further. So we can see that the strategy and the approach of AIS will be different from other brands. But we want to ensure that the way that we invest like this will enable us to do it sustainably. For example, when we joined in SEB, we have already joined SEB in investing as well, but we are doing it gradually. We are doing it step by step and taking a careful approach. When we think we're ready, we will launch the product. And when the product takes off, we will invest further. We take this approach when we work with a number of partners. For example, with our insurance partner, we issue new products, and these products are -- allow or provide more options to our consumers. If they drive a car, but not quite frequently, then they can pay less for the insurance premium and the insurance premium can reflect the nature of their vehicle utilization, for example, but we're not doing the market dumping. We study the market, and we try to offer the best service because if we invest too much cost, but we are not offering the best service, then probably this is not the optimum way to do business. And this is the ecosystem of our digital service that we would like to take. So to summarize that we would like to follow these 3 pillars, we would like to continue growth. We want to ensure that we will make profit. And at the same time, we want to -- as I have mentioned earlier, that we focus on the dividend company. When we operate, even though we have to do new things, but we like to maintain the cost and also maintain better performance. And also, these are the things that we focus on. And of these based on the 3 pillars, this is the pillars on being the Cognitive TECH-CO, the first one is customers, employees and shareholders. And AIS has been based on these 3 pillars from the start. But with the move towards being the Cognitive TECH-CO, we are going to be focusing on customers first, but our customers will have to have experience that are catered to their personality. And employees have been changed to colleagues because in this ecosystem that we are moving forward, the digital ecosystem, apart from our employees, the partners are also going to be a very important element. So we need to ensure that our colleagues trust each other, can work with each other. So you will see new investments, new joint ventures with a number of our partners as well. And most importantly, since we are a dividend company that -- as we have mentioned earlier, shareholders, are our supporter, we still have a commitment towards our shareholders, and we have to maintain what we have promised to our shareholders as much as possible. So these are the 3 elements of our purpose and passion. Whether as a service provider as a cognitive TECH-CO, all of these services will be based on these 3 pillars. So I would like to finish here and Khun Tee will speak about sustainability, about our core business, and he will shine the light on how we can work on these 3 pillars, what would be the profit margin of these 3 pillars. So Khun Tee, the floor is yours.

So good afternoon, everyone. I'm glad to see you in person after not being able to do so for so long. I understand that in the past 2 to 3 years, there are many events that we had to go through, whether it's in our industry or just the economy in general. And people started asking questions about our profits. Can we grow, for example, and we are trying our best to ensure that everything is improving and developing in the right direction. And in terms of the profit margin, we are trying to ensure as best that our stakeholders will be receiving the best benefits of investing in us. And for the future, we will be looking at our growth in more diverse perspectives because we've gone through 2G, 3G to 4G and now it's 5G, we could see a clear image of the trend of growth in the mobile industry. And at the moment, like the mobile communication rate is 140% already. So we need to have more products and services. And of course, different services, we have different projects -- profit margins and analysts always ask like, okay, so which is the one will give us the most profit. And if we're going to be honest, we will have to manage each service individually and have to look at the markets where there is the greatest potential of growth, and we will have to keep a close eye on all our services, and we'll try our best. And another thing is we will need to build efficient -- become more efficiency with cost optimization and there are a lot of things that came in the past few years like 5G Spectrum network. So there's both intended and unintended costs that came with them, but we've been able to manage it quite well. In my opinion, they might take some time to recover from some of the things that we've gone through and we're now in a new cycle of 5G. We're trying to manage and invest and some unintended cost that spend is like the electricity bills that we're going to have to pay because it's increased this year, and we have to look at how we can invest to ensure that we receive the most beneficial returns. And this is what we've been trying to keep a close eye on and trying to manage properly in the past couple of years. And finally, we also have to find new growth more, something that's more exciting through acquisitions. And as we've mentioned, we looked at companies that could help supplement and improve our growth and can also help us in a more broader sense, and also help investors and the public at the same time, and that's the acquisition of 3BB and JASIF. I'll touch on that maybe towards the end. And I would like to ask the analysts, if you have the chance, I would like you to also share this information. Because a lot of investors, they don't really understand, for example, with JASIF, they don't know what's happening in the industry, what the competition is like, what the landscape is and how, for example, would 3BB will help us strengthen our services and can JASIF do the same. There's still a lot of misunderstanding in investor side. So if you can help us share that information, that would be great. We believe that AIS has been giving out adequate information on this. So if you have the opportunities to further educate the general population, that will be great, and that might have been quite a long introduction. But I'd like to get into the meat of my content. So first, if we look at our mobile arm services, it's our majority revenue, about 88% is from the consumer side. And of course, when consumers has a very high competition. We already know that. And especially in the past year with all the macroeconomics and all the other situations, there's going to be a lot of competition in terms of the price. And we -- I just want to show that our EBITDA margin is still at 45% to 50%. And if you look at the pricing, the enterprise side, might be more stable. But overall, it's still a very healthy margin that we have. Now the other arm is the fixed broadband. Of course, this is another place where pricing is very competitive and AIS fiber is about 7.5% market for broadband is growing, there's high competition. But since we benefit from using the shared networks, our costs are at an advantage when compared to our competitors. And our product offerings, if we can do fixed mobile convergence, there's a lot of interesting opportunities that we can use. And our EBITDA margins is still healthy. It's not as great as our mobile arm, but it's still good and there's still room for improvement. And I guess, like you can see here is about 35% to 40%. And the enterprise businesses, the 3.9% is the nonmobile that we're talking about. So there's things like EDS and the CCIID that we're going to be talking about later. And then the margins really depend on what type of service we're looking at. If it's IoT, ICT projects or projects -- or trading projects for example, things like systems integrations, it's in the high single digits for the gross margin. And we have to maybe bundle this or combine this as other services to ensure that it's still in healthy state. And for the recurring services, there are things like we can help manage things for our clients. At the moment, our recurring services cover about 10% to 15%, early teens. And as for the other services, there, we have our own services, and I think that's over 20%. So this is a lower profit, lower gross margin. Sure, but it's new. It's a new channel, new revenue channel. Because if you look at the margins, the margins might be down, but the total revenue has increased. So that's why I say we have to look at the specific services. And because of the structure, the cost and returns are different for each type of service. And another thing is that, it is for -- this is nonmobile. So the mobile part, we're already accessing about 70% of the enterprises and we still are still always looking at ways to expand that reach. And our final arm is the digital services. What we want to do is to create a unique and distinguishable services that have their own niches. And we really want to be -- we really want to stand out in these areas. For example, things like insurance that was brought up earlier in the previous session. Because if we are able to continue our insurance services to full pace, we don't have to answer contact to the call centers. We don't have to do the evaluation of our vehicles. We can do everything just through our mobile phones, take a photo of our vehicles and send there. And then the next day, they will send you a contract to review. And the benefit is that if you look at the insurance premiums, when you compare that to traditional providers, it's about 40% to 50% lower. So we're really -- we're going to see this in more action in the last -- in the half -- second half of the year. And this is where we're going to really use the feedback that we got in the first half to improve our processes. Because, of course, it's going to be our selling point. This Is done digitally. It's on the mobile, but we also have to have a clear benefits for the consumer and a clear selling point. So when we look at the other types of services, if we are able to have more contributions into different types of products, I think they can also be some more additional revenue for us. But at the moment, I wouldn't want to put all my eggs in one basket. We'll wait to see how it goes into the next 6 months. Now next is about cost efficiency. As we mentioned, and how to optimize that. And we've seen that we've had to weather the storm in the past 2 years with COVID. Trading sales, which has been stop and go, stop and go. And the reason -- and how -- the way we had to manage our costs has been very intensive and very challenging in the past 2 years. And like I said, this is early in the 5G cycle. So when we have to improve all the infrastructure, all the systems, there's a lot of cost and especially with the electricity bills, the electricity costs, especially this year, where they're going to increase the price of electricity, there's going to be some unavoidable costs. And we expect that we are going to be able to manage it better going forward because there are going to be more things that we can control. Now that the worst is hopefully behind us and if you look at things like things we can do, things that we have been doing on things like energy savings, things like the internal process digitalization and also planning -- optimizing our CapEx. And if you look at the 5G, of course, there's a lot of initial cost. And next, how we recoup that depends on our strategy going forward. Today, all the mobile phones being -- most of the mobile phones in the country is still running on 4G. And if you look at the data traffic growth in Thailand, I think there's about a 20% growth. So it's going to take up our network capacity, and we have to invest more to make sure that we can still provide the service. And in doing this, we have to optimize it to make sure that we are being as cost efficient as possible. And other thing -- other things are things like service centers that we are trying to optimize, whether it's the resources that we use for these centers, to reduce the costs as much as possible and still provide the best experience that we can and still improve on our experience as well. And I believe that in the future, there are 2 key themes that we are going to focus on. First is the automation of the network. If we can do that, there's going to be a significant investment. But overall, in the long run, it's going to reduce cost significantly as well. And it can also provide better, optimized and personalized service for our consumers. So in the next -- in the coming months, we're going to have to upgrade our software and hardware. And if we complete that process, we know -- we are sure that the user experience will change, will be better. And the second model is going to think about new ways to engage with our product -- with our clients to have new engagement models. First is about the physical side of it. Because I feel the market currently is split in 2. There are consumers that are around the age of most people in this room. There's still like physical interactions, there's a high-touch economy. And there's a new group, the younger generation, they like high technology instead. So it's more contactless and we have to try to reinvent our engagement or models to balance our users and their experiences with our services. Because in the past, we were giving just some broad services to everyone. But in the future, it will be more clear what type of specific personalized services we provide to the specific groups of people. And this is what we're going to see in maybe in the next year or 2, and it will also help optimize our operations and the cost of operations subsequently. Next, when we look at the business landscape in the fixed broadband competition, there's just definitely going to be more demand. And in the past, there were some challenges because since it was -- this was an area of a fertile ground for growth. Everyone was competing, trying to get into this market. And if you look at the number of total subscribers, of course, it's increased. But for us, since we're a challenger -- we're newcomers into this area, we might get 20%, but others who have been there, incumbents in this market might find it more difficult to grow. And we can see that some operators can still compete, for example, us because our ARPU, A-R-P-U is improving every year. And at the moment, good ARPU is about 400 or lower than that. So what we need to do or what we've been doing in the past 2 years is try to reduce the cost to the customer as much as possible. So at the moment, initially, everybody expected that the ARPU was about 600 but standard, but now it has to go down to about 400 or 450. And what we've done is we've talked to all the vendors or the subcontractors to get that price down. And we can see that some other operators can't do that. They can't reduce those prices. And I'm sure some of you only invest in the funds. They don't know -- you might not know about what's going on in the business side. But we just want to show you that in some -- for some operators, this is actually public info, you can refer to it. But the cash cost is about 600. So if you look at the ARPU today, that is at -- ARPU is at 400, 450. Then -- of course, then we will have that advantage. So if we go to track the actual consumers, the subscribers to broadband, for example, if you look at 3BB, they have 2 subscriber statistics. They have about 3 million subscribers. That's the total subs. That's about 3 million. But the actual paying subs are about only 2 million. But if you look at our statistics, the 3BB statistics are actually lower than ours and through vision because their cost -- their initial pricing is still high. It's still at 600. They can't compete with our 450 prices. So in the future, we will have to look at how we can compete at the pricing. So the -- we have to find a balance because if it goes low, then there's not going to be enough cash in hand for us. So with each new acquisition, that needs to be at least 3,000 to 5,000. Of course, it's about 450, 500, 600 per month. But we -- I bring this up because if investors aren't looking at this closely, they're like, oh, why is AIS bullying the other operators by providing such competitive prices. But you might have to actually go into the details and look at the pricing in the previous years as well. Because like I said, I bring this up because I talked to a lot of investors in the past couple of years, and they were looking at of the funds. They only purchase the software. They don't look at the workings, in and outs of actual business operations. So they don't understand why these changes happen. And I think that's very important. And finally, we have to look at the cash flow for these businesses, where there is enough. And if you look at the differences between 2 years ago and today, there's a significant change. And finally, we still believe that what we are offering or what we are trying to restructure is to create win-win solutions. Because what we have to do is we have to look at whether if we don't change anything, can we -- is it sustainable? Can we still continue this business model? And if it can't, of course, we have to change it. And we do believe that if we do the restructuring, it will just -- it will have many positive results like the increased sales and services channels, especially consumers in the provinces, the rural areas, they can provide -- they can receive better coverage and better services. And there are also things like the network footprint. At the moment, if you look at the national level overall, it's already increasing in Bangkok. The problem is there's still a lot of cables everywhere. It's not really optimizing the country's investment. And if you look at 3BB, they're still considered trusted brand, especially in the provincial level. And the acquisition of 3BB is beneficial because we receive that trust as well to continue the services in the provinces. And -- but anyway, we still have to look at the future and whether the business models will be sustainable. As for the investment, we also want to provide better yields than we see today for our investors. And if we can do that -- and if everything goes to plan, we also believe that it can reduce the risks of conducting business and also makes the risk lower for our sponsors. And in the end, it will make the business stronger and people who want to invest in funds [indiscernible] will find it more attractive. And in the end, I believe that the benefits will -- it will truly benefit the investors themselves in the end. But my concern is that if the investors, they are missing some information or they make decisions without all the information, then they might have a negative view on the company. And if we look at the potential asset injection like I mentioned a lot of all the cables that we have existing, especially the 3BB cables, we can continue to do that in like piecemeal. We can do small chunks. We don't have to look at -- at the moment, the profit, it's still enough to provide dividends for the shareholders at an acceptable rate. So at the moment, if we can raise smaller funds in smaller chunks for the funds and there is also going to be beneficial for us and for the investors overall. And also we are going to -- we're not just looking at increasing the yields, but also ensuring that it's going to be able to be available in the long term. For example, in the future, we really have more assets and the funds will grow without having to increase the size of the funds too much and it can self-sustain itself. I think that is a more sustainable way to conduct our business in this aspect. And I think in the end, this is all for -- to create a win-win solution for us, for our investors to increase our scale, and then the shareholders will get good returns, traders will get good returns as well. And I think that will be the end of my session. Thank you very much.

So thank you very much, the 2 executives for your presentation. So next, we're going into the Q&A session. This is Thitithep from KKPS. I have 4 questions. First one is that we are now lifting the lockdown, but the mobile phone sector is not similar to mobile phone sectors in other countries and other economic sectors of Thailand. We have not seen any recovery in the second quarter. For mobile phone in other countries, I think that they are now on the positive for a number of quarters now. If we look at Thailand, for example, retail and restaurants chain -- restaurant business they are now on the positive side. So I would like to ask in terms of what is slowing us down in terms of our recovery, comparing to other countries and also other sectors in the -- in Thailand. The second question is when I looked at DTAC and True and their merger, I think there is a cost redundancy in -- quite high cost redundancy in terms of network, marketing and administration. But when I look at the advanced fixed broadband and just adjusted, cost redundancy may not be as high as True and DTAC, but I think that we are more quite heavier in terms of human resources. Please confirm if this is a correct understanding? And also third question is the potential asset injection at fiber and also the JASIF. I believe that this is -- the character here, it's quite different from character in other countries. They are more active. They are not as passive as you are, and there are creation of new assets and acquiring REIT, which will assist in offloading the CapEx. When they are merging with REIT, the parent company will be lighter, of course. So I'm not sure if this concept is possible or feasible in Thailand, I'm not sure if there is any regulations barring this kind of exercise. Also I'm not sure if you have heard this question before, allow me to ask again that if the shareholders of JASIF would like to -- what will be the 3 options? The first one is to go ahead because it's beneficial for us. The second one is to negotiate the price. The third one is to pull out completely. So these are the 4 questions. Thank you.

Well, I would like to answer the first 2. The first one is it is because competition that is very aggressive to the point of unreasonableness because the second competitor would like to have higher market share. So the utilization is significantly higher. The usage goes like 20% to 30% every year, higher. But -- and this should be distributed across the industry if we are competing fairly. This is the main reason. You can see that the unlimited package are very cheap; unlimited data, fixed speed, they are very cheap. They used to be at 4 megabytes. Now it's 10 megabytes unlimited at a very cheap price. And this is why the -- raising the revenue is very difficult. And this is one of the reasons why the second half of this year, we are going to lead in terms of we're not going to reduce the price. We're not going to dump the price in order to acquire market share because this is our signal that we are trying to say that this is not a healthy competition. And also, if it is reasonable, they should be able to recognize or realize that this is the opportunity for every business operators. If we are competing fairly, everyone will get the benefits. And we can see the sector should be recovered right now. But now we are facing unreasonable battle. Because people will just keep changing their packages, keep changing the offers in order to get the cheaper price, and it's not healthy for the industry. So we hope that towards the second half of the year, the situation will be better. So the second question, of course, the synergy between True and DTAC, there is a cost redundancy, network costs and so on and so forth. But for 3BB, there may not be as high cost redundancy. But there are 2 -- at least 2 costs, which is CapEx in the expansion of businesses as Khun Tee has mentioned that the -- to prevent the overlapping of CapEx, this will help us in terms of saving the cost redundancy and also by scale, if we -- it may take about 4 to 5 years in order for us to increase. But what's more important that -- and may not be realized by investors is that the synergy like the defensive value that we may not realize. For example, the 3BB clients that are existing, if half of them or 50% of them are using mobile of the other operator, we can do the mobile bundling. But this is to enhance or to initiate upsell and cross-sell. So this is the cost synergy that we can -- approach that we can take. So I would like to just add that there is a certain level of cost synergy. It may not be as high as True and DTAC because we can see that True and DTAC, one side has not invested for a while, while the other side has been continuously investing with the network -- in order to have the network coverage and also we can see that the growth in the utilization as well. So the scale here will be different. But for us, this CapEx is one thing that I have mentioned by the operation cost that we can see, there are a few of them that is very evident. For example, the cost for 1 new client, it will be about THB 3,000 to THB 5,000 if you include the network that we have to invest in. So this cannot be eliminated, but it can be optimized. So we will have the business model that 3BB may be relying on in-source, but we are relying on outsource, for example. So this is something that we have to discuss and adjust. In terms of the purchasing power, as I have mentioned. So 2 million and 2.4 million in total, about 4-ish -- 4 million-ish, I think, vendors. This is quite optimum for vendors. Basically, if you work with AIS, you will get paid, you will get the money. But this is something that I think we can -- the approach we can take and we have -- what we have estimated as well. So I would like to answer your fourth question first. If the shareholders did not approve to accept what we would like to offer, I would say that the deal will not go off as easily as planned. Because according to the structure, for example, the cash cost, so if you would like to get more information on this, I can give you more insight. So the orange part, as you can see here, these are the rental fee. I divided this by per capita so that you can see the data more clearly. So between 2019 to 2020, the cost goes up from THB 225 to THB 372. So in the operational expenses, we tried to reduce this. And you can see that there is a reduction from THB 300, which is reduced to THB 256, but the overall cost is up, which is on the contrary with the ARPU that -- which is up. So that's why it's very difficult. And there's a disadvantage. If the ARPU cannot be reduced, I don't think that I need to forecast this. Analyst can forecast by yourselves about how the situation may go. So we can see this trend from 2019. At first, we think that the ARPU on average would be at about THB 600. But when we see the trend and with the 2-year forecast, we adjusted the cost from then. And over the last 2 years, we have been adjusting the cost in order to reduce the cost. If the ARPU is down, then the cost is down, then we're fine. But if in a situation where -- the worst situation that you can do business is that you receive less cost per -- less revenue per unit, but you cannot manage the cost per unit to reflect the money that you receive. So basically, if you, analysts, have analyzed this data, I can provide you with more information that you can work on to the benefit of your investors. So on REIT, in other countries, I believe that there will be the intermediary that will build the infrastructure and many operators will be using the same infrastructure. It is the proactive approach. You can basically construct assets, you can own it, and you can allow people to utilize the asset, which is not the same in Thailand. Because in Thailand, we are quite reactive. The reason why is that, for Thailand, for mobile businesses, I would say that we do not have enough spectrum. So the 2 to 3 operators that we can see when they have higher traffic, they have to expand. They have to -- so with more spectrum, they will be able to accommodate more clients. So comparing Thailand to other countries, we have more spectrum. So when there is -- when we are adjusting or moving forward to 5G, we do not need so much work in terms of splitting the spectrum. And each of the operators, they have quite to a certain extent, the sites. So they may have to rent some more, but not so much. But in terms of the future prospect, if the spectrum -- if there is more spectrum and you need a slot. For example, we are using up all 3 slots that we have because we have 700, 900 each are using 1 slot and we have 1,800 and another 2,600. So if there is a new brand using the 3,500 slot, so instead of setting up the new cell tower, we can cooperate and share the infrastructure with other countries -- sorry, with other operators. So there is the cell tower on one side and the fiber on one side. And in order to share between the two, it's quite difficult. So that's why for JASIF and with the higher traffic, we would need the cell tower, and people are now starting to fiberize.

This is [ Pisut ] from [ KTAM]. I have 3 questions. The first one is for JASIF and 3BB. As Khun Tee has mentioned that now they are burning cash. The question is, since we see that there are burning cash and we are trying to depress the ARPU, why are we purchasing this business? We can just let them burn the cash and collapse, and we can't just acquire the clients, basically, the subscribers. So 3BB and JASIF, are they bundling or not bundling? And by bundling, do you mean if you are not buying JASIF, you're not buying 3BB. Or if it's unbundled, so if these voted no or on the no-rent basis, we are not going to buy JASIF, but you're going to buy 3BB anyway. So are we having the power to negotiate or is it with the seller? So another question is, this is -- if I am personally -- if I am the JASIF shareholder, I would vote yes on everything apart from the rent discount. If all the shareholders take the same approach, by way they vote 'yes' on everything and they vote 'no' on the rental discount, what will be the process? Are you going to take that to the Board of Directors to decide or what would be the approach? If you are going to continue with the deal, you mean that you're going to purchase anyway with the same rent that they have not been willing to give us the discount or what would be the approach? What would be the fair value? And last part of the first question is what would happen after 2032 if they do not reduce the rent and we do not renew the contract? And what would happen in 2037 if they reduce the rent and we renew the contract?

So that's a very tough question. So from our perspective, I think if we merge with them today, it would be beneficial for all parties involved. Something if we just let a company collapse, sometimes it's very difficult to acquire -- to bring them to the status that are optimum. I think that we are now at the right balance where we are okay with the value or as an estimate, it's not too cheap, it's not too expensive. It's a balanced price. And if -- and we -- so basically, if we have to find the same amount of customers, what will be the cost of seeing those customers. So from my perspective, I think it is a bundle. It's a bundle from the side of the seller. For example, if we only purchased 3BB and leave JASIF, if I'm going -- if I am within the -- if I'm a unitholder of the fund of JASIF, then I will be quite concerned because I know for well that the asset is now lower than the value. But if we look at the long run, if we can create a normal cycle of OpCo and AssetCo, then it would be beneficial. And we can see that among like, for example, CPM, USA OpCo are doing business to a certain extent that they have an optimum asset. They can put that asset into the fund. And then when they receive the cash, they will use the cash to expand their business to acquire more assets and then the asset will go into the fund, and it will take this kind of cycle. But if you put the asset into the fund, but -- that's not working, then it means that this cycle is not working for you. If you put the asset into the fund, but somehow the asset value has dropped, then it means that your cycle is not working. So the acquisition will come with -- along with a number of package, for example, we can further the business. We can take the clients. So if we can have 3BB capacity to basically assist us in providing the coverage of the fiber business, for example, and the new service that will happen in the household will be -- will have a higher opportunity of succeeding as well. If you're going to build the infrastructure by yourself, then you have to basically lease the land and starting from scratch. But if you are buying something that they have the asset already, then you don't have to invest as much. And if the fund does not agree on voting on the rent, then I would say that it will be very difficult because if you want to change anything, you have to start over from the very beginning. So what we have deliberated is that the shareholders have been analyzed fully and the Board itself has analyzed everything as well. And we think that this is the most beneficiary choices for everyone. And as I have mentioned that if we adjusted the commercial expense to the fair value, whether or not we will renew the contract, if it's fair, if we are making profits, there is a reason or justification for us to renew the contract. But if it's not fair, if we're not making profit, as there are 2 portions, the 80% portion and 20% -- 60% at THB 700, for example. If the unitholders do not understand because it is not a straightforward relationship. Basically, if you purchase the core and you sell that per person to -- at a price of THB 400 to THB 600, it means like you are using the Mercedes-Benz as a taxi. It's not going to pay off. Because if you use Mercedes-Benz as a taxi, then you just -- your business would just collapse. But if you estimate the value of Toyota comparing to Mercedes-Benz and then you use it as a taxi driver, and everybody is driving a taxi now, then basically, you are competing with too many competitors and your business will not just -- will not work out.

There's another thing that we want to talk about the fiber optic lines right now, it's very easy just to set up these connections, especially the provinces. So at the moment, what we need to do is to ensure that people -- shareholders for our 3BB have the confidence in this acquisition that we will be still using their infrastructure, that we will be still using their systems instead of just building our own.

I think that depends on the conditions that we set for the acquisition. At the moment, we're still in a lot of discussions. And like you mentioned, they are also concerned about 2032 because they assume that when they get there, they will receive an extension of the contract and they assume that it will be under the same conditions without looking at whether it's going to be competitive or not. They don't even think about will they even exist in 2032. And if they do, are they going to extend the contract at just the same rate? Will it still be competitive then? For example, if you look at examples of a True, they're renting at THB 350 right now, right? And it's a fixed rate. It's not going to increase. That's why I wanted to reiterate that we need people to provide this type of information to investors so that they can decide with confidence that they know all the facts, like things like the sizing of the commitment, the cash flow. At the moment, the cash flow that is higher than in the past, much higher -- and with the different changes, we need to provide investors with enough information to decide what they want to do. At the moment, I get the feeling that they're not really looking at the details enough. They think they're always going to be okay, don't worry about it. But I ask you in this room, like what do you think? What concerns do you have? And today, the best we can do is set conditions that we can extend the contract value so that the price per unit or the return per unit will be as valuable as it is now. Of course, in the future, we can always look at ways to improve the quality of the service and the return.

And thank you, Khun Tee. Another question is, if you look at the market in Thailand, the household fiber market. If we acquire 3BB, and all the things that are depressing the ARPU right now will improve the condition, though this business can't go back to the same height as it used to be. And if we are successful in this acquisition, our competitors True and DTAC, what with their plans, what do you think the landscape will be like in the future, whether it's the mobile or the fiber -- fixed fiber market? What do you think you would look like? Because if you look at the competition now, is it better for the consumers? Or is it better for us?

So if we look at it, look at the principles, if we are able to merge with 3BB, I believe that the competition will go down. There'll be less competition at the moment, the 50% discount for people to switch operators, I don't think that's going to be a promotion that last long because we don't want people to keep switching back and forth. And however, I believe that in the overall, the market for this misses will be better. And as for your question about if we can acquire 3BB and our competitors don't, of course, we will be in a stronger position. Because at the moment, our mobile position is very strong already. Even with the competition, with the promotions, with the subsidy fee are still very competitive. And if we do go through with this merger, then of course, we'll be in a stronger position. And however, the competitors will still -- are still very big corporations, and there still be competition, and we believe that all the players in the market will still strive to be the leader in the digital services. So competition will still be there, but it might just go back to being in a more reasonable price, and we won't be competing on price as much as before. We were competing on how we are the best service provider instead. Or if we're not #1, how do we maintain our #2 status and maintain our number -- our client base. But it doesn't mean that we're going to suffer. Competition will still be there.