Who will be forced out during Thailand's "Crisis" year ?

Advanced Info Service Pcl, Thailand's biggest mobile-phone company, said call-pricing competition will continue throughout the rest of what it has described as a "crisis" year.

"Competition this quarter is similar to the previous quarter, as average call rates are almost the same level," President Wichian Mektrakarn told reporters in Bangkok. "This year has been the toughest time in several years for me. I have faced every crisis I could ever imagine."

Advanced Info, based in Bangkok, and rivals Total Access Communication Pcl and True Corp. cut rates and offered free talk time to expand users before a government plan allowing them to charge for connecting calls from competing networks later this year. Growth in Thailand's wireless market is slowing as more than half the 65 million population already own mobile phones. Advanced Info on Nov. 10 reported third-quarter profit fell 13 percent to 3.65 billion baht ($100 million), the lowest in three years, as competition intensified and users made fewer calls after the company ended discount rates.

The mobile phone operator added 405,200 subscribers in the third quarter, down from 684,000 subscribers a quarter earlier. Average monthly revenue of prepaid subscribers, who account for 89 percent of the 17.7 million customers, fell to 265 baht per user as of September, from 277 baht at the end of June, Advanced Info said. It had about a 49 percent market share of Thailand's 35 million mobile-phone users at the end of September.

On Sept. 30, Advanced Info started offering a package for new customers who buy stored-value cards in October to pay 1 baht ($0.03) per call during certain hours, and 1 baht per minute the rest of the day.

"Earlier this year we faced change in our main shareholder that led to boycott of our products. Price cutting by our competitors led to the collapse of our network and falling
profit," Wichien said. "The military coup and changes in government caused investigations of our parent."

Total Access and True, Thailand's second- and third-biggest mobile-phone companies, on Nov. 9 said they filed a complaint with the telecommunication regulator against Advanced Info's call-rate reduction. Advanced Info has cut rates to levels that are lower than its real costs, hurting other cellular phone operators, said Supachai Chearavanont, chief executive officer of True.
Wichian, Advanced Info Chief Executive Officer Somprasong Boonyachai and other executives called today's press conference to deny that they had cut their call rates below cost. Advanced Info is still making a profit from the current call rates, and insists its prices are at the same level as that of rivals, Somprasong said today. He and other executives declined to provide earnings forecasts.

The obvious winners in this price war are the consumers. But with a saturating market, how long will it take before one of the companies involved collapses? Who will be the biggest loser?

Share your thoughts with us.