THAILANDS ADVANCED INFO SERVICE RATED BBB Standard & Poors today has assigned its BBB long-term foreign currency rating to Thailand-based mobile phone company Advanced Info Service Public Co.,Ltd (AIS). The rating reflects the solid business base in Thailand for mobile phones, AISs position within the mobile phone industry, and the companys strong balance-sheet and financial profile. Offsetting these positive factors is AISs recent commencement of a large capital expenditure program and continued regulatory uncertainty. Despite a recent slowing of the Thai economy , demand in Thailand for cellular phones continues to grow strongly, fuelled by on going traffic problems in Bangkok, shortages of fixed lines, expansion of the mobile networks into the provinces, reductions in handset prices, and long-distance mobile tariffs that often are cheaper than fixed-line charges. AIS was the first private company in Thailand to be granted a concession to build-transfer-operate a mobile network, and has used this timing advantage to become the largest provider of cellular services , with a marker share of around 52%. While clearly dominant in the analogue marker, AIS currently lags its main competitor in the digital market, but is expected to recover ground as the company adopts a more aggressive marketing stance following expansion of its digital network. Strong revenue generation and a conservative financial structure have resulted in solid interest coverage ratios of more than 10 times for the past three years. Recent reductions in debt will see even stronger ratios for 1996. In September 1996, however, AIS negotiated its concession and can now build its own backbone network throughour Thailad . AIS will use a significant proportion of debt to finance this backbone, and beyone 1996 standard & Poors experts financial ratios to moderate towards levels seen in the recent past. The structure and regulation of the Thai telecommunications industry continues to evolve in line with a draft Master Plan prepared by the Ministry of Transport and Communication. The election of a new Government in November 1996, however, has delayed necessary legislative changes, and the final regulatory structure, and timetable for achieving that structure, will not be know for some time yet. The outlook is stable. AIS recently has commenced a major capital expenditure program, and the associated financing will significantly increase debt levels over the next two years. However, strong projected cash flows, combined with currently conservative capital structure, make the capital expenditure program manageable.