Telecommunication companies fulfill a critical need today: access to the internet. We often take for granted our ability to communicate on WhatsApp, find entertainment on TikTok, hail a ride with Grab, purchase items on Shopee, and work using Gmail. However, once our connection is lost, we quickly realize the extent of our dependence on our telcos.
Telcos have risen to the status of critical infrastructure, their services becoming indispensable to our daily lives. As investments, they resemble utility stocks, appealing to investors seeking dividends.
In many countries, the telecommunications industry is highly regulated and characterized by an oligopoly market structure, with just a few companies providing services. This is also the case in Thailand, where only two companies dominate, holding more than 90% of the market share. Advanced Info Services (AIS) commands 47% of the market, while True Corporation secures more than 50%.
True Corporation achieved a dominant market share through its merger with DTAC in 2022. Separately, True and DTAC previously held smaller market shares than AIS.
However, AIS is not standing still in response to this development and has acquired the fixed broadband company 3BB. This acquisition positions AIS-3BB as the largest entity in Thailand’s fixed broadband market, holding a 44.8% share and reducing the number of major players from four to three.
Notably, the fixed broadband market in Thailand presents more promising growth opportunities compared to the mobile sector. According to Fitch Ratings, the penetration rate of fixed broadband was under 60% in 2021, whereas mobile penetration reached 146% of Thailand’s population.
While governments typically exercise caution over companies gaining excessive power to the detriment of consumers, the Thai government has not shown significant concern over the ongoing consolidation within the telco industry. This could indicate that the industry has reached a mature stage, where less competitive pressure is needed for companies to remain profitable and continue providing an essential public service.
When comparing the top two telecommunications companies, AIS emerges as a more appealing investment, given its profitability and dividend distribution. This distinction is crucial, as telcos are not typically considered growth stocks; a mature company should ideally be capable of generating profits and returning capital to shareholders. In contrast, True has faced losses for the past three years, whereas AIS has maintained profitability and offered a dividend yield of 4.1%.
| Telco | Market Cap (baht) | Revenue (baht) | ROE | ROA | PE Ratio | Dividend Yield |
| AIS | 621.6B | 188,873m | 33% | 7% | 21x | 4.1% |
| True | 274.7B | 202,889m | Loss | Loss | Loss | 0% |
AIS has demonstrated consistency in its dividend distribution in the past 10 years, even throughout the Covid period, with the dividend per share beginning to rise again since 2020—a clear indicator of improved profitability.
The ability of AIS to distribute dividends stems from its strong track record of generating free cash flow, which exceeds the capital expenditures invested in the company. This exemplifies that AIS is well-managed, with the management successfully balancing the investment required to upgrade telecommunications facilities, such as 5G technology, while still generating sufficient cash to pay out dividends.
Therefore, the sustainability of AIS’s dividends appears likely, given its consistent generation of free cash flow. Additionally, further consolidation within the industry could bring greater stability and certainty, reinforcing the company’s ability to maintain its dividend payments.
AIS is 40.44% owned by Intouch Holdings, a fellow constituent of the SET 50 index, with an additional 23.31% held by SingTel, Singapore’s largest telecommunications company. The backing of such significant and experienced investors adds a layer of reassurance for AIS’s stakeholders.
In terms of valuation, AIS is considered fairly priced, with its Price-to-Earnings (P/E) ratio standing at 21.5x, closely mirroring its 5-year average of 21.4x. Its total return in 2023 was +16%, outperforming the Thai market. Additionally, its dividend yield of 4.1% is comparable to its 5-year average of 4.3%. This indicates that the current price is reasonable for investors who are satisfied with a 4% yield. However, for those seeking a greater margin of safety, investors might consider opportunities when the P/E ratio trades at 1 standard deviation below the average, around 18.3x, or when the dividend yield is 1 standard deviation higher, at approximately 5.2%.
In summary, AIS stands out as a critical provider of telecommunication services in Thailand, showcasing a strong capacity for cash flow generation and the distribution of consistent dividends. The company’s acquisition of 3BB has positioned AIS as the leading fixed broadband provider in the country, highlighting an area with significant growth potential due to its relatively lower penetration rate compared to mobile services. As a mature entity, AIS appeals to investors seeking stability and dividends in their portfolios.
Starting from 1 April 2024, AIS will be traded on the SGX as a Singapore Depository Receipt (SDR), offering Singapore investors the convenience of investing in AIS SDRs as if they were Singapore stocks, eliminating the need to trade its Thai listing directly. To understand how SDRs work, a comprehensive article is available at
Furthermore, an upcoming webinar will shed light on the newly introduced Thai SDRs, including AIS, providing valuable insights into these investment opportunities. Interested individuals can learn more by registering at
This article is sponsored by SGX, the opinions expressed herein are those of the author.